Victory of Voice; Mobile Futures: The CEO of Vodafone talks about the role of the handheld phone in the dawning age of ubiquitous computing, and who will control the traffic.(Interview)

Byline: Rana Foroohar

If you own a mobile phone, chances are you're putting money into Arun Sarin's pocket. The CEO of Vodafone runs the world's largest wireless company, with 147 million customers in 26 countries. After his highly publicized U.S. land grab for AT&T Wireless failed in 2003, Sarin has refocused on existing operations, and Vodafone looks set to generate $7 billion in free cash flow by March. But the Silicon Valley veteran has his biggest challenge ahead--rolling out 3G, the long-delayed "third generation" of wireless Internet service. Below, he talks about costs, competitors and convergence with NEWSWEEK's Rana Foroohar.

FOROOHAR: What role will the mobile phone play in the age of ubiquitous computing?

SARIN: A very large one. Over 1.2 billion people have mobile phones, and only half that number have PCs, and it's only accelerating from here. Reaching 2 billion in a few years and 3 billion in 10 or 15 years is not out of the question. PCs are an important underpinning, but I think when you think of it in mass-market terms--what will 3 billion people have?--mobile phones is what the 3 billion people will have.

You made a big push this fall with the new 3G phones. Why are you going forward now?

Because our networks, handsets, portals and content are all ready. This is pretty complicated stuff--I mean, we are sticking a VCR and an iPod and a phone and an Internet connection all inside a little device here. So we've taken our time to make sure the fidelity is good and the coverage is good. Frankly, most of our competitors here in Europe have not made the investment, and have not spent the time.

Do you think that 3G will be worth the $250 billion that the industry poured into it?