WHERE THEY CAME FROM
Armed with an analog cellular license in the U.K. that he won at auction, Gerald Whent, chairman of Racal Radio Group (part of the British firm Racal Electronics), set out to conquer a nascent market in 1982. By 1985, he had created a small network—named Vodafone because it provided voice and data over cell phones—and within three years the division was bringing in one-third of the entire company’s profits. In 1991, after three more years of rapid international expansion, Racal spun off Vodafone Group and listed it on the New York and London stock exchanges. At the time, it was the biggest spinoff in Britain’s history.  

WHAT THEY DO
Vodafone is the biggest cell phone provider in Europe.

WHAT THEY GOT RIGHT
Things were going so well for Vodafone with just one license that Whent and his successor, Christopher Gent, went on a buying spree in the 1990s, purchasing licenses and forming joint ventures from Finland to New Zealand. Vodafone also began an aggressive retail marketing effort in Britain.

Then came the mergers. In 1999, Vodafone joined with U.S. cellular provider AirTouch Communications, and the combined market cap placed the company among the 25 largest in the world. That same year, Vodafone formed a joint venture with Bell Atlantic to create what would become Verizon Wireless, and in 2000 bought one of Germany’s leading cell-phone companies, Mannesmann AG, doubling in size as a result.

Vodafone did not slow down under C.E.O. Arun Sarin, who took over from Gent in July 2003. At the end of 2006, Vodafone claimed nearly 200 million customers worldwide, although its market cap remains well below its 1999 heights.

WHAT THEY GOT WRONG
Vodafone may have run out of good air. It has remained almost exclusively a wireless company; because it can’t offer bundled service packages—meaning phone, cable, and broadband internet—the firm has increasingly lost out to competing cable companies and phone carriers. Since internet calling is also beginning to eat into its business, Vodafone’s core European markets aren’t generating the profits they once did.

Sarin’s failed bid for AT&T Wireless early in his tenure hurt his reputation with investors. In addition, Vodafone never achieved the success it had anticipated in Japan. In March 2006 it withdrew from the market altogether, selling its assets to Softbank for $15.4 billion. Now the telecommunications giant has to slow down; according to a plan Sarin announced in the spring of 2006, the plan was to make fewer acquisitions and invest heavily in broadband instead. In February, however, the C.E.O. did agree to purchase a majority stake in India’s largest cell-phone provider, Hutchinson Essar, for $11.1 billion.

WHAT’S NEXT
The company is not only investing in new ways to deliver wireless broadband services, it is also considering expanding fiber-optic networks. It’s also beginning to offer its own bundled services in order to keep abreast of competitors. Rumors have circulated that Vodafone might exit the U.S. market; Verizon has expressed interest in buying Vodafone’s 45 percent stake in Verizon Wireless, although Vodafone has yet to entertain an offer.—Jeremy Kahn