Vodafone Group PLC

Content

1. Corporate Overview Vodafone Group Plc is one of the world's leading mobile telecommunications company, offering an extensive range of services, including voice and data communications. 1.1 Corporate History The Vodafone network was launched on January 1, 1985, which was the first cellular network to be launched in the UK. In 2005, Vodafone launched of PC-to-mobile instant messaging. 1.2 Key Facts Sales (FY05) US$62.9 billion, Assets (FY05) US$252.8 billion 1.3 Subsidiaries/Affiliates Europolitan Vodafone AB Sweden 100% Vodafone Americas Inc US 100% Vodafone D2 GmbH Germany 100% 1.4 Organizational Chart 1.5 Profiles of Key People Chairman - Lord MacLaurin of Knebworth Chief Executive Officer- Arun Sarin Chief Marketing Officer - Peter Bamford 1.6 Recent Developments In February 2006, Huawei Technologies agreed to supply exclusive Vodafone-branded consumer 3G handsets for Vodafone across 21 countries. In February 2006, Vodafone and Microsoft announced the European launch of Windows Mobile Email from Vodafone. 2. Business Description 2.1 Business Segments Vodafone operations are divided into two primary business segments: mobile telecommunications and non-mobile telecommunications 2.1.1 Products/Services Voice Services Social Products Messaging Services Vodafone live! Vodafone live! with 3G Vodafone Mobile Connect Data Cards Roaming Services Other Business Services 2.2 Geographical Segmentation Nearly 25.7% of the companys revenues were contributed by EMEA (excluding Germany, Italy and the UK). 2.3 Key Partnerships/Alliances Amrica Mvil - Vodafone signed a group wide cooperation agreement with Amrica Mvil, the leading mobile operator in the Latin American region, to deliver international roaming services to customers. Universal Music Group- Vodafone and Universal Music Group, the worlds largest music company, formed a strategic alliance to deliver exclusive content as well as entertainment to Vodafone live! customers. 3. SWOT Analysis 3.1 Strengths Dominance in Cellular Market Wide Geographical Presence 3.2 Weaknesses Declining Market Share in Japanese Market Limited Exposure to Emerging Markets Dispute over Corporate Tax Bill in Europe 3.3 Opportunities Expanding Geographic Presence Growth through 3G 3.4 Threats Emergence of Low-Cost Brands Market Saturation in Europe Increased Competition in Core Markets 4. Key Business Strategies Expanding Global Presence Branding Initiatives Focusing on the Japanese Market 5. Information Technology (IT) Deployment and its Role 5.1 IT Organization Chart 5.2 IT Infrastructure Second Generation (2G) Third Generation (3G) Wireless Local Area Networks (W-LAN) High Speed Downlink Packet Access (HSDPA) New Server-side and Client Systems Windows Mobile(R) 5.0 Juniper Networks M320 IP Multimedia Subsystem (IMS) Converged Packet Network IP Platform (CPN) UMTS BTS 1020 Lifecycle Management System Athene Licences 5.3 Key IT Vendors and Contracts Microsoft Corporation Lucent Technologies Juniper Networks Ericsson Cisco Systems Nortel Networks Huawei Technologies Tireno Innovations Metron 5.4 Strategic Role of IT Roadmap to All IP Core Network Evolution Radio Access Network Evolution 6. Financial Performance 6.1 Financial Highlights Total sales registered a y-o-y increase of about 9% in H105. Vodafones voice revenue increased by 7% due to growth in revenue from outgoing and roaming traffic. 6.2 Five-Year Financial Summary Revenue increased to US$62.95 billion in 2005 from US$22.17 billion in 2001. Total assets increased to US$252.86 in 2005 from US$244.6 in 2001. 6.3 Ratio Analysis Vodafone reported a negative operating margin in FY05. However, it improved marginally by 0.56 points and reached a value of (12.04%) from (12.60%) in FY04. 6.4 Market Indicators 6.4.1 Stock Chart The stock of Vodafone has given a negative return of (16.37%) between January 31, 2005 and December 30, 2005. 6.4.2 Earnings Estimates The total revenues are expected to show a consistent increase at a four-year CAGR of 3.33% to reach US$71.76 billion in FY09 from US$62.95 billion in FY05. 7. Competitive Landscape 7.1 Industry Overview 7.1.1 Industry Definition and Segmentation It is divided into 4 segments: Radiotelephone communications Telephone communications, excluding Radio Telegraph & other communications 7.1.2 Market Overview United States Western Europe Eastern Europe Asia-Pacific 7.1.3 Key Drivers Emerging Markets Drive Growth Mobile Messaging New Avenue for Revenue Growth 7.1.4 Major Trends 3G Gaining Traction Declining ARPU Wireless Gaming Witnesses Robust Growth 7.1.5 Outlook Wireless services will continue to lead the global telecom industry in the years to come. Wireless revenue will reach 49% of all telecom services revenue by the end of 2006. 7.2 Competition 7.2.1 Competitive Positioning On the basis of parameters such as:- Number of customers Total revenue Voice revenue 7.2.2 Geographical Coverage The US is the largest market for T-mobile. France is the largest market for Orange in terms of revenue and accounted for US$10.7 billion. For O2, the UK accounts for the largest share of revenues at US$6.4 billion. 7.2.3 Client Base On the basis of parameters such as:- Average Customer Churn Customer base (in million) 7.2.4 Financial Assessment Vodafones turnover increased by 13.9% in 2005. T-mobiles revenue grew by 9.9% due to sustained increase in subscriber numbers in 2005. Orange reported a revenue growth of 24.5% in 2005. O2s total revenue increased by 29.5% in 2005. 7.2.5 Stock Market Performance Vodafone registered negative returns of 16.37% during the period between January and March 2005, the trend in stock performance has been consistently increasing. 8. Outlook 8.1 Company View The company will continue its focus on the growth of customer base and expects to achieve a 1 percentage point lower organic proportionate mobile EBITDA margin in 2006 over 2005. 8.2 Analyst View Vodafone has been performing well in Europe, registering a higher revenue and EBITDA growth than its competitors, mainly by dint of its superior products and cost-control initiatives. Appendices Appendix I Consolidated Profit & Loss Account, 2004-2005 Appendix II Consolidated Balance Sheet, 2004-2005 Appendix III Mergers & Acquisitions, 1998-2005 List of Tables/Figures Table 1.1 Key Facts Table 1.2 Subsidiaries/Affiliates Table 1.3 Recent Developments (2005-2006) Table 3.2 Top 15 Countries in Cellular Subscribers Table 5.1 Licences Held by the Groups Subsidiary Companies Table 5.2 IT Vendors Table 6.1 Financial Highlights (H104-H105) Table 6.2 Five-Year Financial Summary (2001-2005) Table 7.1 Average Wireless ARPU by Region (Q204-Q205) Table 7.2 Competitive Positioning Table 7.3 Vodafone-Geographical Coverage (2003-2004) Table 7.4 T-mobile-Geographical Coverage (2003-2004) Table 7.5 Orange-Geographical Coverage (2003-2004) Table 7.6 O2-Geographical Coverage (2003-2004) Table 7.7 Client Base Figure: 1.1 Organizational Chart Figure 2.1 Revenue (2005) Figure 2.2 Revenue Share by Region (2005) Figure 3.1 Market Share in Japanese Market (Q104-Q305) Figure 3.2 European Mobile Service Revenue Growth (Q104-Q305) Figure 5.2 Roadmap to All IP Core Network Evolution (2004-2010) Figure 5.2 Radio Access Network Evolution (2004-2010) Figure 6.1 Profitability Ratios (2004-2005) Figure 6.2 Performance Ratios (2004-2005) Figure 6.3 Stock Performance (January 31, 2005 to December 30, 2005) Figure 6.4 Estimated Total Revenues (2005-2009) Figure 6.5 Estimated Net Income (2005-2009) Figure 7.2 Western Europe Wireless Subscriber Base (2000-2004) Figure 7.3 Sales (2005) Figure 7.4 Operating Income (2005) Figure 7.5 Stock Performance (2005)