Vodafone: China in its hand?

And now he's won China too.

Overnight there were three candidates ready to take a stake in China Mobile. Deutsche Telekom and NTT DoCoMo may yet buy their way in, but typically it was Gent's company that got there first.

So what has Vodafone got for its money?

Conventional wisdom suggests the $2.5bn buys an interest in a burgeoning domestic market. China Mobile already boasts 23.9 million subscribers, growing at a current rate of two and a half million a month. Even at that incredible speed it will be some time before the operator saturates a market with 1.2 billion potential customers.

It adds up to a mouthwatering prospect but not the overriding factor in Vodafone's decision.

The biggest issue for European operators is global access for its existing (and rich) customer base. In the words of Ovum's John Moroney: "One of the biggest fears is that China takes off like a rocket and you're left with no access. That will severely damage your traveller market."

Although a mobile firm doesn't need a stake in a competitor to ensure roaming rights, it can only help cement a deal. And in a market as important as China, first mover advantage could be crucial.

The current political climate supports this reasoning.

China's imminent entry into the World Trade Organisation (WTO) together with a thawing relationship with the Clinton Administration means foreigners are going to be doing a lot more business in China. Indeed, the WTO puts the figure at an extra $60bn worth of outside investment over the next five years.

This isn't a prelude to more domestic competition, but the next best thing both for Vodafone and its mobile-wielding customers landing at Beijing's Capital International Airport.