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Vodafone

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Vodafone Group plc is a British mobile phone operator headquartered in Newbury, Berkshire, England. It is the largest mobile telecommunications network company in the world by turnover and has a market value of about $134 billion (June 2006). Vodafone currently has equity interests in 26 countries and Partner Networks (networks in which it has no equity stake) in a further 33 countries. At 31 March 2006 Vodafone had 170.6 million proportionate customers in 26 markets across 5 continents. [link] ("Proportionate customers" means, for example, that if Vodafone has a 30% stake in a business with a million customers, that is counted as 300,000). On this measure it is the second-largest mobile telecom group in the world behind China Mobile. The six markets where it has more than ten million proportionate customers are the United Kingdom, Germany, the United States, Italy, Spain and Turkey. In the U.S., these customers come via its minority stake in Verizon Wireless, and in the other five markets Vodafone has majority-controlled subsidiaries.

Vodafone's portfolio of global services, supported by its global brand, is available in a total of 59 countries. In a historic deal, on 17 March 2006 Vodafone Group announced an agreement to sell its ownership of Vodafone Japan (Vodafone K.K.) to SoftBank. On April 14, 2006 SoftBank and Vodafone K. K. jointly announced, that the brand and company name Vodafone will be changed to a "new, easy-to-understand and familiar company name and brand". Masayoshi Son became CEO (Representative Director) of Vodafone K. K.

On 30 May 2006, the company announced a loss before tax of £14.9 billion ($27.9bn) for 2005, the biggest loss in British corporate history. The loss for the year from continuing operations was £17.2 billion and the bottom line loss for the financial year was £21.8 billion. The company was pushed into loss by impairment charges of £23.5 billion, which related to the acquisition of Mannesmann several years earlier, and losses of £4.6 billion in relation to its discontinued business in Japan. At an operating level it remained highly profitable, with an operating profit on continuing operations of £9.4 billion before impairment costs.

Contents

Vodafone in Europe

Red: Vodafone, Purple: Vodafone's affiliates, Orange: Vodafone's partners
Enlarge
Red: Vodafone, Purple: Vodafone's affiliates, Orange: Vodafone's partners

Vodafone currently operates in the following countries in Europe. The proportionate customer numbers are for 31 December 2005:

Country Network Name (former) Ownership Proportionate Number of Customers Status Market Share Official Website Local Competitor(s)
Albania Vodafone 99.9% 748,000 Subsidiary 49% [www.vodafone.al] AMC
Austria A1 0%
Partner 39.1% [www.a1.net] T-Mobile, One, Telering, 3
Belgium Proximus 25.0% 1,077,000 (30 June 2005) Affiliate 48.7% [www.proximus.be] Base, Mobistar
Bulgaria Mobiltel 0% 3,600,000 Partner 56.1% [www.mtel.bg] GloBul,Vivatel
Croatia VIPnet 0% 1,700,000 Partner 44.1% [www.vipnet.hr] T-Mobile, Tele2
Cyprus Cytamobile-Vodafone 0%
Partner 89.3% [www.cytamobile-vodafone.com] Areeba
Czech Republic Vodafone (Oskar) 99.9% 2,140,000 Subsidiary 18% [www.vodafone.cz] Eurotel, T-Mobile
Denmark TDC Mobil 0%
Partner 41.4% [www.tdcmobil.dk] Sonofon, Telia, 3
Estonia Elisa Oyj (Radiolinja) 0%
Partner [www.elisa.ee] Tele2, EMT
Finland Elisa Oyj (Radiolinja) 0%
Partner 30% (2003) [www.elisa.fi] Sonera, Finnet
France SFR 43.9% 7,101,000 (30 June 2005) Affiliate 36% [www.sfr.fr] Orange, Bouygues Télécom
Germany Vodafone (D2) 100% 29,165,000 Subsidiary 37% [www.vodafone.de] T-Mobile, E-Plus, O2
Greece Vodafone (Panafon) 99.8% 4,429,000 Subsidiary 35.6% [www.vodafone.gr] Cosmote, TIM Hellas, Q-telecom
Hungary Vodafone 100% 2,038,000 Subsidiary 21.99% [www.vodafone.hu] T-Mobile, Pannon GSM
Iceland Og Vodafone (Tal, Íslandssími) 0%
Partner 35% [www.ogvodafone.is] Síminn, Sko
Ireland Vodafone (Eircell) 100% 2,047,000 Subsidiary 54% [www.vodafone.ie] O2, Meteor, 3
Italy Vodafone (Omnitel) 76.9% 24,056,000 Subsidiary 35% [www.190.it] TIM, Wind, 3
Latvia Bite Latvija 0%
Partner [www.bite.lv] LMT GSM,Tele2
Lithuania Bite Lietuva 0%
Partner [www.bite.lt] Tele2, Omnitel
Luxembourg LUXGSM 0%
Partner 64% (2003) [www.luxgsm.lu] Tango (Tele2), VOXmobile
Malta Vodafone (Telecell) 100% 177,000 Subsidiary 55% (2003) [www.vodafone.com.mt] Go Mobile
Netherlands Vodafone (Libertel) 99.9% 3,976,000 Subsidiary 23% [www.vodafone.nl] KPN, T-Mobile, Orange
Poland Plus GSM 19.6% 1,774,000 Affiliate 33% [www.plusgsm.pl] Orange, P4, Era (T-Mobile)
Portugal Vodafone (Telecel) 100% 4,119,000 Subsidiary 34.3% [www.vodafone.pt] TMN, Optimus
Romania Vodafone (Connex) 100% 6,132,000 Subsidiary 45% [www.vodafone.ro] Orange, Cosmote Romania, Zapp Mobile
Slovenia Si.mobil-Vodafone 0%
Partner 22.7% [www.simobil.si] Mobitel
Spain Vodafone (Airtel) 100% 12,923,000 Subsidiary 29% [www.vodafone.es] movistar, Amena
Sweden Telenor (Vodafone; Europolitan) 0%
Partner 16% (2003) [www.telenor.se] Telia, Tele2, 3, Spring Mobil
Switzerland Swisscom 25.0% 1,008,000 (30 June 2005) Affiliate 62% [www.swisscom-mobile.ch] Orange, TDC, Tele2
Turkey Telsim 100% 11 million Subsidiary 25.0% [www.telsim.com.tr] Turkcell, Avea
United Kingdom Vodafone 100% 16,325,000 Subsidiary 24% [www.vodafone.co.uk] O2, Orange, T-Mobile, 3, Virgin Mobile
* A local company with more than 50% being owned by the parent company is considered a subsidiary; Ownership of less than 50% makes the local company an affiliate.

Local companies without ownership at all are partners.

see About Vodafone : [Global Footprint] at 31 March 2006

History

Vodafone in Asia-Pacific

Vodafone currently operates in the following countries in the Asia-Pacific region. The proportionate customer numbers are at 31 December 2005:

Country Network Name (former) Ownership Proportionate Number of Customers Market Share Official Website Local Competitor/s
Australia Vodafone 100% 3,126,000 18% [www.vodafone.com.au] Telstra, Optus, 3
China China Mobile 3.3% 8,250,000 (30 June 2005) 65% [www.chinamobile.com] China Unicom
Fiji Vodafone 49% 95,000 100% [www.vodafone.com.fj]
Indonesia XL 0%
[www.xl.co.id]
Japan will change to "Softbank Mobile Corp.", effective October 1 (Press Conference of May 18, 2006) (previously: Vodafone K.K., J-Phone) small % of preferred shares after sale to SoftBank (15,146,500 before sale to SoftBank) 17% [link] DoCoMo, KDDI (au)
Hong Kong SmarTone-Vodafone 0%
[www.smartone-vodafone.com.hk] 3, Peoples, CSL, New World, PCCW
India AirTel 10% 1,633,000 22% [http://www.airtelworld.com]
Malaysia Celcom 0%
[www.celcom.com.my] Maxis Communications, Digi.com
New Zealand Vodafone (BellSouth) 100% 2,024,000 52.4% [www.vodafone.co.nz] Telecom
Singapore M1 0%
35% [www.m1.com.sg] SingTel, Starhub
Sri Lanka Dialog 0%
[www.dialog.lk]
* Local company with more than 50% being owned by the parent company is considered a Subsidiary; Ownership of less than 50% makes the local company an Affiliate. Local companies without ownership at all are Partners.

History

Vodafone in the Middle East and Africa

Vodafone currently operates in the following countries in the Middle East and Africa region. The proporationate customer numbers are as at 31 December 2005.  


Country
Network Name (former)
Ownership
Proportionate Number of Customers
Market Share
Status
Official Website   


Bahrain
MTC-Vodafone




30%
Partner
[www.mtc-vodafone.com.bh]  


Democratic Republic of Congo
Vodacom
25.5%*
 
48%
*
[www.vodacom.cd]   


Egypt
Vodafone (ClickGSM)
50.1%
3,068,000
47%
Subsidiary
[www.vodafone.com.eg] 


Kenya
Safaricom
35%
1,221,000
65%
Affiliate
[www.safaricom.co.ke]  


Kuwait
MTC-Vodafone




 
Partner
[www.mtc-vodafone.com] 


Lesotho
Vodacom
44.15%*
 
80%
*
[www.vodacom.co.ls]  


Mozambique
Vodacom
49%*
 
30%
*
[www.vm.co.mz]   


South Africa
Vodacom
50%
7,043,000
58%
Subsidiary
[www.vodacom.co.za]   


Tanzania
Vodacom
32.5%*
 
58%
*
[www.vodacom.co.tz]  


  * Stakes in local Vodacom operating companies in Democratic Republic of Congo, Lesotho, Mozambique and Tanzania are held through the stake in Vodacom South Africa. As the companies in the DRC, Lesotho, Mozambique, and Tanzania are only subsidiaries of an affiliate (Vodacom), Vodafone Group does not have direct formal relationships with them.     

  




History




Vodafone in the Americas


Vodafone currently operates in the following countries in the Americas region.  


Country
Network Name (former)
Ownership
Proportionate Number of Customers
Market Share
Official Website
Local Competitor/s  


Argentina
CTI Móvil
0%


 
[www.cti.com.ar]
Personal, movistar  


Brazil
Claro
0%


22.24%
[www.claro.com.br]
Vivo, TIM, Oi   


Chile
Smartcom
0%


16.7%
[www.smartcom.cl]
movistar, Entel PCS   


Colombia
Comcel
0%


63.6%
[www.comcel.com]
movistar, Colombia Móvil  


Ecuador
Porta
0%


65.4%
[www.porta.net]
movistar, Alegro PCS   


El Salvador
CTE Personal
0%


 
[www.telecom.com.sv]
movistar, Tigo, Digicel   


Guatemala
PCS Digital
0%


 
[www.pcsdigital.com.gt]
movistar, Tigo   


Honduras
PCS Honduras
0%


 
[www.alo.hn]
  


Mexico
Telcel
0%


 
[www.telcel.com]
 movistar, Iusacell, Unefon  


Nicaragua
Enitel
0%


 
[www.enitel.com.ni]
   


Paraguay
CTI Móvil
0%


 
[www.cti.com.py]
   


Peru
Claro
0%


 
[www.claro.com.pe]
 movistar   


United States
Verizon Wireless
44.4%
22,785,000 
 
[www.verizonwireless.com]
 Cingular, Sprint, T-Mobile  


Uruguay
CTI Móvil
0%


 
[www.cti.com.uy]
 movistar, ancel 


 * Local company with more than 50% being owned by the parent company is considered a Subsidiary; Ownership of less than 50% makes the local company an Affiliate. Local companies without ownership at all are Partners.     

   

History



United States


In the United States, Vodafone owns 44.4%1 of Verizon Wireless, the country's second largest mobile carrier. Before this joint venture was formed, Vodafone merged with AirTouch Communications of the U.S. in June 1999 and changed its name to Vodafone Airtouch Plc.  In September 1999, Vodafone Airtouch announced a $70-billion joint venture with Bell Atlantic Corp.  The first wireless business with a national footprint in the U.S., Verizon Wireless was composed of Bell Atlantic's and Vodafone AirTouch's U.S. wireless assets and began operations on April 4 2000.  However, Verizon Communications—the company formed when Bell Atlantic and GTE merged on June 30 2000—owns a majority of Verizon Wireless and Vodafone's branding is not used, nor is the network compatible with GSM phones. This relationship has been quite profitable for Vodafone, but there have historically been three problems with it. The first is the above-mentioned incompatibility with the GSM standard used by Vodafone's other networks, and the consequent difficulty of offering roaming between Vodafone's U.S. and other networks. The other two stem from the fact that Vodafone has does not have management control over Verizon Wireless. Vodafone is thus unable to use the Vodafone brand for its U.S. operations, and (perhaps more importantly) has no control of dividend policy at Verizon Wireless and is therefore entirely at the mercy of Verizon management with respect to cash flow from Verizon Wireless to Vodafone.  

Perhaps as a consequence of these reasons, Vodafone made a bid for the entirety of AT&T Wireless when that company was for sale in 2004. Had this bid been successful, Vodafone would presumably have sold its stake in Verizon Wireless, and then rebranded the resultant business as Vodafone. As AT&T Wireless used the GSM standard, this would have resolved all the above problems. However, Cingular Wireless (a joint venture of SBC Communications (now AT&T) and BellSouth) ultimately outbid Vodafone and took control of AT&T Wireless, and Vodafone's relationship with Verizon has continued.


Early in 2006 Verizon announced their intent to buy-out the remaining 45% of Stock of Verizon Wireless from The Vodafone Group.[link]



Latin America


On 15 November 2005, Vodafone Group announced a group-wide co-operation agreement with America Movil of Mexico. The agreement involves co-operation on international services and roaming. The services include Voice and GPRS Roaming services, Preferred Roaming and Virtual Home Environment. Included in the agreement are the 13 networks owned and controlled by America Movil (except Tracfone in the United States), and the various operating companies of Vodafone and its Partner Networks.   

Although the announcement only says that the two groups are partnering to deliver international roaming services, subsequent press releases of the Vodafone Group indicates that it has 27 (now 33) Partner Networks, therefore the 13 networks of America Movil in the agreement are considered Partner Networks.





1 Vodafone Group Plc. Key Performance Indicator press release for the quarter to 30 June 2005, 25 July 2005.



Financial results

From its 31 March 2006 year end onwards Vodafone will report its results in accordance with International Financial Reporting Standards (IFRS). It has issued results amended to IFRS standards for its 31 March 2004 and 31 March 2005 year ends for information purposes, and these are shown in the first table below.   

Vodafone has some large minority stakes, in particular in Verizon Wireless in the United States and SFR in France, which are not included in its consolidated turnover. In order to provide additional information on the overall scale and growth trends of its business it publishes "proportionate turnover" figures and these are included in the tables below. For example, if a business in which it owns a 45% stake has turnover of £10 billion, that equals £4.5 billion of proportionate turnover for Vodafone. Proportionate turnover is not an official accounting measure and Vodafone's proportionate turnover should be compared with other companies' statutory turnover. 

Vodafone also produces proportionate customer number figures on a similar basis, eg. if an operator in which it has a 30% stake has 10 million customers that equals 3 million proportionate Vodafone customers. This is a common practice in the mobile telecommunications industry.   


Year ended 31 March
Turnover £m
Profit before tax £m
Profit for the year £m
Basic eps (pence)
Proportionate customers (m)
Proportionate turnover £m  


2006*
29,350
(14,835)
(21,821)
(35.01)
170.6
48,455


2005
34,073
7,951
6,518
9.68
154.8
43,602  


2004
32,492
9,013
6,112
8.70
133.4
39,446   

  
*Losses for year to 31 March 2006 reflect write downs of assets, principally in relation to the Mannesmann acquisition. Proportionate turnover includes £7,100 million from discontinued operations.

The following table shows Vodafone's results under UK generally accepted accounting principles (UK GAAP). By the end of its key acquisition drive, which ran from 1999 to 2002, Vodafone had more than £100 billion of goodwill on its balance sheet. As UK GAAP requires goodwill to be written off against the profit and loss account Vodafone has shown large statutory losses since then. However this write off of goodwill is purely an accounting adjustment and does not affect Vodafone's cash position or its ability to pay dividends. Despite the reported losses it is in reality a highly profitable company, and this is reflected in the fact that it has often been ranked among the top twenty companies in the world by market capitalisation. Vodafone's accounts for the years shown in the table below include a great number of material one off transactions, and apart from noting the rapid expansion of the group in the years covered, no conclusions about underlying trends should be drawn from the figures without examining the accounts in more detail.   




Year ended 31 March
Turnover £m
Profit/(loss) before tax £m
Profit/(loss) for the year £m
Basic eps (pence)
Amortisation of goodwill £m
Proportionate customers (m)
Proportionate turnover £m +  


2005
34,133
(4,702)
(7,540)
(11.39)
14,700
154.8
43,602   


2004
33,559
(5,047)
(9,015)
(13.24)
15,207
133.4
39,446   


2003
30,375
(6,208)
(9,819)
(14.41)
14,056
119.7
33,926   


2002
22,845
(13,539)
(16,155)
(23.77)
13,470
101.1
29,799  


2001
15,004
(8,095)
(9,763)
(16.09)
9,585
83.0
22,230  


2000
7,873
1,349
487
1.80
1,712
39.1
12,569   


1999
3,360
935
637
4.12
8
25.4
9,185   

  


1 Vodafone Group Plc. Key Performance Indicator press release for the quarter to 30 June 2005, 25 July 2005.



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References




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