"This kind of deal is what we all dreamed about when we were students," former chief executive Arun Sarin exulted after the company bought a 67 percent controlling stake in the Indian firm then known as Hutchison Essar.
But even though Vodafone has won tens of millions of new subscribers in the hyper-competitive Indian market, it has faced innumerable problems.
"Has India been a good case in terms of return on investment?" Vodafone global chief executive Vittorio Colao said on a visit this month to the country. "Unfortunately, the answer is no."
The Indian market soured for Vodafone, the world's biggest mobile firm by revenues, soon after its entry.
"For sure, the market has become tougher. Within a year of our acquisition, the rules were changed and six new (national) licences were issued. New players came into the market with very aggressive pricing," Colao said.
Vodafone had to write off $3.7 billion last year on its Indian investment after cut-throat competition among the more than dozen operators slashed calling tariffs to below one cent a minute.
Vodafone also spent $2.4 billion on buying third-generation (3G) licences to upgrade its services as the cost of spectrum skyrocketed.
And last month it said it would pay $5 billion to buy out its Indian partner, the Essar Group, seeking to end a fraught relationship.
On top of these expenditures, Vodafone is fighting a $2.5 billion tax bill after India's tax department said it should have withheld tax when paying for Hong Kong-based Hutchison Whampoa's stake in the Indian telecom company.
The tax battle is being closely monitored by other foreign firms, which see it as setting a precedent for cross-border acquisitions in India.
India's Supreme Court is due to pronounce its verdict in the case in July. Vodafone argues it did not need to withhold tax because the transaction took place in the Cayman Islands.
"Also, explain please to me why the buyer should be taxed? We have not sold an asset, we have bought an asset. We have not made a capital gain," a clearly irritated Colao said.
The acquisition was part of Vodafone's push to lessen its dependence on Western markets, where mobile phone penetration is way over 100 percent.
Mobile penetration in India, the world's fastest-growing cellular market and second largest after China, is about 60 per 100 people.
But it has not been all bad news for Vodafone, which is mulling an initial public share offer of its Indian unit to give it better "local roots."
It has grown its Indian customer base to 127 million subscribers from 23 million in 2007 -- far more than the 100 million initially targeted and is now the country's third-largest mobile operator.
"No one knows which way the tax case will go," Romal Shetty, India telecoms chief at global consultancy KPMG, told AFP.
"But apart from that, things are looking brighter, they've managed to create a brand name here, call rates are stabilising and they should be able to gain from 3G," he said.
Colao believes there is a big future from 3G data telecom services such as music downloads and Internet -- in India. A vast proportion of India's 1.2 billion population have no access to the Internet yet.