A European Informational Website
learn more
Vodafone Group plc is a mobile network 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 £86 billion (November 2006). Vodafone currently has equity interests in 27 countries and Partner Networks (networks in which it has no equity stake) in a further 38 countries. Its portfolio of global services, supported by its global brand, is available in a total of 59 countries/ territories. The name Vodafone comes from Voice data fone, chosen by the company to "reflect the provision of voice and data services over mobile phones."[1]
At 31 January 2007 Vodafone had 200 million proportionate customers in 27 markets across 5 continents. [2] ("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 seven markets where it has more than ten million proportionate customers are the United Kingdom, Germany, the United States, Italy, Spain, Turkey, and, India. In the U.S., these customers come via its minority stake in Verizon Wireless, and in the other six markets Vodafone has majority-controlled subsidiaries.
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.
Vodafone currently operates in the following countries in Europe. The proportionate customer numbers are for December 2005:
<small>† Due to exclusive partnership agreements with CYTA that cover the entire area of the Republic of Cyprus (including the northern territories that are legally considered to be under occupation by Turkey), Vodafone Turkey cannot market its services under the Vodafone brand in northern Cyprus, through its subsidiary KKTC Telsim that it has acquired together with operations in Turkey. </small>
see About Vodafone: Global Footprint, 16th June 2007
In 1982 Racal Electronics plc's subsidiary Racal Strategic Radio Ltd. won one of two UK cellular telephone network licences.[2][3] The network, known as Racal Vodafone was 80% owned by Racal, with Millicom and the Hambros Technology Trust owning 15% and 5% respectively. Vodafone was launched on 1 January 1985.[4] Racal Strategic Radio was renamed Racal Telecommunications Group Limited in 1985.[3] On 29 December 1986 Racal Electronics bought out the minority shareholders of Vodafone for GB£110 million.[5]
In September 1988 the company was again renamed Racal Telecom and on 26 October 1988 Racal Electronics floated 20% of the company. The floation valued Racal Telecom at GB£1.7 billion.[6] On 16 September 1991 Racal Telecom was demerged from Racal Electronics as Vodafone Group.[7]
In July 1996 Vodafone acquired the two thirds of Talkland it did not already own for £30.6 million.[8] On 19 November 1996, in a defensive move, Vodafone purchased Peoples Phone for £77 million, a 181 store chain whose customers were overwhelmingly using Vodafone's network.[9] In a similar move the company acquired the 80% of Astec Communications that it did not own, a service provider with 21 stores.[10]
In 1997 Vodafone introduced its Speechmark logo, as it is a quotation mark in a circle; the O's in the Vodafone logotype are opening and closing quotation marks, suggesting conversation.
On 29 June 1999 Vodafone completed its purchase of AirTouch Communications, Inc. and changed its name to Vodafone Airtouch plc. Trading of the new company commenced on 30 June 1999.[11] To approve the merger, Vodafone sold its 17.2% stake in E-Plus Mobilefunk.[12] The acquisition gave Vodafone a 35% share of Mannesmann, owner of the largest German mobile network.
On 21 September 1999 Vodafone agreeded to merge its U.S. wireless assets with those of Bell Atlantic Corp to form Verizon Wireless.[13] The merger was completed on 4 April 2000.
In November 1999 Vodafone made an unsolicited bid for Mannesmann, which was rejected. Vodafone's interest in Mannesmann had been increased by the latter's purchase of Orange, the UK mobile operator.[14] Chris Gent would later say Mannesmann's move into the UK broke a "gentleman's agreement" not to compete in each other's home territory.[15] The hostile takeover provoked strong protest in Germany and a "titanic struggle" which saw Mannesmann resist Vodafone's efforts. However on 3 February 2000 the Mannesmann board agreed to an increased offer of £112bn, then the largest corporate merger ever.[16] The EU approved the merger in April 2000. The conglomerate was subsequently broken up and all manufacturing related operations sold off.
Vodafone currently operates in the following countries in the Asia-Pacific region. The proportionate customer numbers are at 30 June 2006:
Vodafone currently operates in the following countries in the Middle East and Africa region. The proporationate customer numbers are as at 31 December 2005.
Vodafone currently operates in the following countries in the Americas region.
In the United States, Vodafone owns 45% of Verizon Wireless, the country's second largest mobile carrier behind AT&T after their merger with Cingular Wireless. The percentage of the customer base and revenues of Verizon Wireless that Vodafone consolidates is slightly lower, since some Verizon Wireless subsidiaries have minority investors. (Hence the exact percentages that Vodafone and Verizon report vary from period to period: in June 2006 Vodafone reported that Verizon Wireless owned 98.6% of its customers at that date.) 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 CDMA 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 900/1800 MHz 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 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.
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. However, Cingular Wireless (a joint venture of SBC Communications and BellSouth (both now AT&T)) ultimately outbid Vodafone and took control of AT&T Wireless, and Vodafone's relationship with Verizon has continued.
Early in 2006 Verizon re-iterated their desire to buy-out the remaining 45% of Stock of Verizon Wireless from Vodafone Group.[17]. Vodafone has also repeatedly indicated that it would be willing to buy out Verizon's stake.
On 15 November 2005, Vodafone Group announced a group-wide co-operation agreement with América Móvil 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 América Móvil (except Tracfone in the United States), and the various operating companies of Vodafone and its Partner Networks.
On 6 February 2007, Vodafone Group signed a three-year partnership agreement with Digicel Group. The agreement, which includes Digicel's sister operation in Samoa, will result to the offering of new roaming capabilities. The two groups will also become preferred roaming partners of each other. Along with Digicel's markets, the Vodafone brand is now present in 81 countries, regions, and territories.
For more details, please visit [7]
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, 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.
<small>
*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.</small>
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.
<sup>1</sup> Vodafone Group Plc. Key Performance Indicator press release for the quarter to 30 June 2005, 25 July 2005.
Previous relationships include sponsorships of SL Benfica, Manchester United, Ferrari Formula One constructor and New Zealand Warriors Rugby League team.
The company Huawei makes USB 3G datacard modems for Vodafone (Vodafone Mobile Connect USB Modem).
Using this USB card, customers are able to access 3G broadband services, from many types of computer. The software installs itself from the modem, reducing the need for technical expertise from users.
Using HSDPA technology, it offers download speeds of up to 3.6 Mbit/s and upload speeds of up to 384 kbit/s, which depends on Vodafone's network on each of the countries offering 3G services. When outside of 3G broadband coverage, customers will automatically be able to access the web using Vodafone's existing GPRS services.
For further information, please visit http://www.vodafone.co.uk/usbmodem
In September 2006, Vodafone announced that its move to enter the fixed-line broadband space in the UK. It has entered into an agreement with BT to resell BT's DSL Broadband connections under its own brand name.
Vodafone is present in the fixed-line space in Germany through Arcor, a telecom operator in which Vodafone holds a majority stake.
March 2007 - Vodafone commissions Walter Werzowa, founder and owner of the audio branding company, Musikvergnuegen, to create the Vodafone Small Business Tariffs' Mnemonic.
Contents