Vodafone Group

Vodafone Group Plc is the world's leading mobile telecommunications company with interests in 33 licensed network operators located in 27 countries and spanning five continents [Europe, the Middle East, Africa, Asia Pacific and the United States].

At 31 March 2007, approximately:

• 56.02% of the Company’s shares were held in the UK
• 30.60% in North America
• 12.38% in Europe (excluding the UK)
• 1.00% in the Rest of the World

The Group's mobile subsidiaries mainly operate under the brand name 'Vodafone', however in the United States the Group operates as Verizon Wireless.

Formed - 1996 by Telstra as part of Telstra's international expansion, initially focused on providing services to top tier international organisations who were already Telstra clients in Australia.

Employees - people in Auckland, Wellington and Christchurch

Customers - At 31 December 2007 the group had 252 million registered customers, excluding paging customers.

Retail Channels - own stores plus extensive dealer network across the country.

Services - residential and business lines, mobile, mobile broadband

Current Market Status

Vodafone's strategy is founded on five core strategic objectives:

1. Revenue stimulation and cost reduction in Europe
2. Innovate and deliver on our customers’ total communications needs
3. Deliver strong growth in emerging markets
4. Actively manage our portfolio to maximise returns
5. Align capital structure and shareholder returns policy to strategy

2007 was an important period for Vodafone to address:

• Growing demand for broadband services
• Manage the greater growth potential of emerging markets.
• Positioning for competition and regulatory pressures

Key Programmes

Programmes are focused on:

1. Significantly reducing Vodafones cost base.
2. Increase presence in high growth markets with acquisition in India.
3. Strengthen the customer franchise through organic growth and acquisition [now exceeds 206 million proportionate customers].
4. Revenue stimulation and cost reduction in Europe - focusing on driving additional usage and revenue from core mobile voice and messaging services and to reduce our cost base.
5. Driving mobile usage through larger minute bundles, innovative tariffs, prepaid to contract migrations and targeted promotions.
6. Lower roaming pricing through Vodafone Passport - the combined effect of Vodafone’s own initiatives and direct regulatory intervention.
7. Core cost reduction programmes to target a 10% mobile capital expenditure to revenue ratio next year by:
   
   1. Outsourced IT application development and maintenance and on track to deliver expected unit cost savings of approximately 25% to 30% within two to four years.
   2. Data centre consolidation - anticipated savings of 25% to 30% in one to two years.
   3. Centralisation of the network supply chain management - expected to reduce costs by around £250 million within one year.
   4. Reduce the longer term cost of ownership of our networks through network sharing arrangements [announced initiatives in Spain and the UK].
   5. Improving price elasticity in Europe, achieving more savings from our cost reduction programmes
8. Many of these cost initiatives are multi-year programmes but early savings are being realised.
9. Innovate and deliver on our customers' total communications needs - several key initiatives underway and will be more visibile at the end of 2008.
10. Drive to substitute fixed line usage with mobile - launched several fixed location pricing plans offering customers fixed line prices when they call from within or around their home or office. Vodafone At Home and Vodafone Office are currently available in seven markets for consumers and twelve markets for businesses.
11. Network upgrades:
    
    1. High speed mobile broadband (HSDPA)
    2. Fixed broadband services (DSL) - mostly on a resale basis.
12. Products and services:
13. To integrate the mobile and PC environments - partnerships with leading internet players to provide current online services via mobile, including:
    
    1. PC to mobile instant messaging with Yahoo! and Microsoft
    2. Search with Google
    3. Auctions via eBay
    4. Videos through YouTube
    5. Social networking with MySpace
14. Mobile advertising - signed agreements with Yahoo! in the UK and leading providers in Germany and Italy.
15. Deliver strong growth in emerging markets- Egypt, Romania and South Africa, Turkey and India.
16. Actively manage our portfolio to maximise returns - sold non-controlling interests in Belgium and Switzerland. Maintaining support for Verizon Wireless in the US. Verizon Wireless has strong performances on all key metrics - record customer growth, low churn rate, and high uptake of non-voice services.
17. Align capital structure and shareholder returns policy to strategy:
    
    1. New capital structure in May 2006
    2. Introduced one time returns policy consistent with the operational strategy of the business.

Vodafone expects market conditions to remain challenging for the year ahead in Europe.

Acquisitions

Turkey

India - Hutchison Essar

Egypt - additional 4.8% interest in Vodafone Egypt

Network & Services

For Vodafone Networks [including partner networks] and market share.

Key Services

• Vodafone live!
• Vodafone Mobile Connect USB Modem
• Vodafone at Home
• Vodafone 710
• Amobee Media Systems

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