Can Vodafone capture the mobile phone industry in India and China?

Arun Sarin, named chief executive of Vodafone in 2003 as business models faltered, has invested $28 billion to expand into emerging markets such as India. At the same time, he's exited slow-growth markets in Japan, Belgium and Switzerland.

Sarin's main strategy is to increase Vodafone's presence in countries that are driving regional economic growth and gain a majority stake in the right companies.

Vodafone's fiscal first quarter results, reported in July, beat analyst forecasts. The firm added 9.1 million subscribers to reach 232 million globally. Revenue rose 7.5% to $17 billion as growth in emerging markets offset tougher competition in Europe, especially Germany.

While Sarin says that emerging markets will drive revenue growth. Vodafone garners almost 20% of revenue from emerging markets.

Vodafone now controls the third biggest wireless firm in India, where only 17% of people have mobile phones, leaving plenty of room for subscriber growth.

In India, Vodafone added 7.7 million wireless users in July. Research firm Informa says that about one-third of new cell-phone users worldwide this year will come from India and China.

In China, more than one-third of its 1.3 billion people, now use wireless phones. It's a market that Sarin covets, but China's government limits foreign ownership of telecom companies.

Vodafone has a 3.3% stake in China Mobile, by far China's biggest wireless firm with 332 million customers.

Sarin has been stymied in his bid to grow in China, where the government has delayed an industry restructuring that would let new entrants, and new investors, into the market.

“We'll just have to wait and see how the industry restructuring goes,” Sarin said, adding that Vodafone has some sway with the government. “We have to find a privileged position,” he said.

China Mobile looms as a Vodafone rival in Asia as it prowls for acquisitions,

“Our emerging markets strategy is focused on large populations, with good industry structures, and places that dominate the economics of a continent, like India and China.” said Sarin.

Can Vodafone gain control of these two enormous emerging markets?