If size alone mattered, spending $11bn of Vodafone shareholders’ money would not get into the history books. After all, Airtouch cost $85bn, Mannesmann $195bn and the European 3G licences $25bn. Yet the purchase of a 67 per cent economic interest in Hutchison Essar, India’s fourth largest mobile operator, feels like a seminal moment for Vodafone. The deal is a strategic no-brainer and has been well executed, cementing the impression that Vodafone’s crisis during 2005 and 2006 was just a temporary lapse in competence.

The $18.8bn enterprise value looks steep based on short-term multiples, but India’s low 13 per cent penetration means it is fair to take a longer-term perspective. Vodafone expects to exceed its local weighted average cost of capital (WACC) by 2011. This does partly depend on low short-term tax rates but, on the other hand, Vodafone’s WACC estimate of 11-12 per cent is highly conservative.