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Project Report
On
VODAFONE GROUP Plc

Submitted To:
Prof. Uddeepan Chatterjee

Submitted By:
Ankit Somani

Anshul Khandelwal

Anuja Sharma

Archita Garg

Table Of Contents
 Introduction To The Telecom Sector

The telecom services have been recognized the world-over as an important

tool for socio-economic development for a nation. It is one of the prime support
services needed for rapid growth and modernization of various sectors of the
economy. Driven by various policy initiatives, the Indian telecom sector
witnessed a complete transformation in the last decade. It has achieved a
phenomenal growth during the last few years and is poised to take a big leap in
the future also.

The global telecommunication industry is constantly changing. Public and

private enterprises have meet ever demanding public needs while providing
services at reasonable cost. Policy maker, provider and regulators face the
complex challenge of promoting competition while encouraging massive capital
investment required to satisfy the ever increasing demand.

Despite the global economic slowdown and the difficulties the

telecommunication industry has experienced recently, in general,
telecommunication sector continue to capture the imagination with its potential
for 1 million new subscribers in the coming decade. Broadband internet
penetration rate continue to rise the impending introduction of next generation
mobile services promises to revitalize a mobile market that has already reached
a saturation levels in a number of companies.

Globally, the telecommunications industry is about a $3.85 trillion sector,

including more than $1.3 trillion in annual revenues in the U.S. Worldwide, there
were more than 3 billion cellular phone service subscribers by early 2008,
including more than 265 million in the U.S. Global subscribers will grow to nearly
5 billion by the end of 2012, as low-cost providers are making service prices low
enough to be affordable for vast numbers of people in Third World nations.
Inexpensive cell phones are now indispensable to consumers from Haiti to Africa
to New Guinea. Telecommunications remains one of the largest providers of
employment in the world, with over 1 million employees in the U.S. alone.

Several forces continue to trigger major changes in the telecommunications

sector today, including: a) mergers and consolidation have completely changed
this industry's landscape, b) competition is heating up and cross-border
ownership of telecom businesses is making this an increasingly globalized
industry, c) deregulation and privatization will have a continual effect on the
telecom sector worldwide and d) rapid advances in Internet and wireless
technologies will continue unabated, quickly changing consumer preferences and
disrupting traditional communication methods.

No other industry touches as many technology-related business sectors as

telecommunications, which, by definition, encompasses not only the traditional
areas of local and long-distance telephone service, but also advanced
technology-based services including wireless communications, the Internet, fiber-
optics and satellites. Telecom is also deeply intertwined with entertainment of all
types, including cable TV systems, since cable companies are now aggressively
offering local exchange service and high-speed Internet access. The relationship
between the telecom and cable sectors has become even more complex as
telcos are now selling TV via IP (Internet protocol) services, competing directly
against cable for consumers' entertainment dollars.

Ingenuity, innovation, cost control and a reasonable approach to spending

and investment will help to move the industry ahead. New cellular, cable
telephony, VOIP (Voice Over Internet Protocol) and wireless technologies
promise continuous rapid evolution of this sector and pose a massive threat to
traditional landlines. The cost of a cell phone call continues to drop, and cell
phone manufacturers are adding advanced new features to their phones on a
regular basis.

Introduction To Vodafone

Vodafone Group Plc is the world's leading mobile telecommunications

company, headquartered in Berkshire, England, UK, employing over 65,000 staff
and with over 130 million customers. The name Vodafone comes from Voice
data fone, chosen by the company to "reflect the provision of voice and data
services over mobile phones.The business operates in 26 countries worldwide
with a significant presence in Europe, the Middle East, Africa, Asia Pacific and
the United States through the Company's subsidiary undertakings, joint ventures,
associated undertakings and investments. Vodafone Group Plc is a public limited
company incorporated in England under registered number 1833679. Its
registered office is Vodafone House, The Connection, Newbury, Berkshire, RG14
2FN, England.

The Company's ordinary shares are listed on the London Stock Exchange
and the Company's American Depositary Shares ('ADSs') are listed on the New
York Stock Exchange. The Company had a total market capitalization of
approximately £79 billion at 30 June 2008.

The Group's mobile subsidiaries operate under the brand name 'Vodafone'. In
the United States the Group's associated undertaking operates as Verizon
Wireless. During the last two financial years, the Group has also entered into
arrangements with network operators in countries where the Group does not hold
an equity stake. Under the terms of these Partner Network Agreements, the
Group and its partner networks co-operate in the development and marketing of
global services under dual brand logos.

Global recognition of the Vodafone brand is growing as the company rolls out
its identity into new markets. However, it retains local names and imagery in
markets where this is essential to maintaining the trust of customers. To help
promote its image worldwide, Vodafone uses leading sports stars from high
profile global sports, including David Beckham and Michael Schumacher.

Vodafone is the largest mobile telecommunications network company in the

world by turnover and has a market value of about £75 billion (August 2008).
Vodafone currently has operations in 25 countries and partner networks in a
further 42 countries.
At 30 June 2008,based on the registered customers of mobile
telecommunications ventures in which it had ownership interests at that date, the
Group had 269 million customers, excluding paging customers, calculated on a
proportionate basis in accordance with the Company's percentage interest in
these ventures.
 Financial Position of the Company

HIGHLIGHTS:

£35.5 billion

Revenue
14.1% increase

£10.1 billion

Adjusted operating profit

5.7% increase

7.51 pence

Total dividends per share

11.1% increase

260.5 million

Proportionate mobile customers

26.2% increase

2008 2007 2006 2005

At/year ended 31 March
£m £m £m £m
Consolidated Income Statement data
Revenue 35,478 31,104 29,350 26,678
Operating profit/(loss) 10,047 (1,564) (14,084) 7,878
Adjusted operating profit (non-GAAP measure)(1) 10,075 9,531 9,399 8,353
Profit/(loss) before taxation 9,001 (2,383) (14,853) 7,285
Profit/(loss) for the financial year from continuing
6,756 (4,806) (17,233) 5,416
operations
Profit/(loss) for the financial year 6,756 (5,297) (21,821) 6,518

Consolidated Balance Sheet data

Total assets 127,270 109,617 126,738 147,197
Total equity 76,471 67,293 85,312 113,648
Total equity shareholders’ funds 78,043 67,067 85,425 113,800
Revenue

Revenue of the company increased by 14.1% to £35,478 million for the year ended 31
March 2008, with a growth of 4.2%. The impact of acquisitions and disposals was 6.5
percentage points, primarily from acquisitions of subsidiaries in India in May 2007 and
Turkey in May 2006 as well as the acquisition of Tele2’s fixed line communication and
broadband operations in Italy and Spain in December 2007. Revenue is increased by 3.4
percentage points because of the exchange rates, principally due to the 4.2% change in
the average euro/£ exchange rate, as 60% of the Group’s revenue for the 2008 financial
year was denominated in euro.

Operating result

Operating profit of the company increased to £10,047 million for the year ended 31
March 2008 from a loss of £1,564 million for the year ended 31 March 2007. The loss in
the 2007 financial year was mainly because of the £11,600 million of impairment charges
that occurred in the year, compared with none in the 2008 financial year. Adjusted
operating profit increased to £10,075 million, with 5.7% growth.

PROFIT BEFORE TAX/PROFIT

The profit before tax was accounted £m 9001 million for the year ended 31 march
2008 while in the previous year the company is having a loss of £m 2383 million and
the profit for the financial year2008 was £m 6756 million.

The Group’s consolidated net debt position at 31 March was as follows:

2008 2007
£m £m
Cash and cash equivalents (as presented in the 1,699 7,481
Consolidated Balance Sheet)
Trade and other receivables(1) 892 304
Trade and other payables(1) (544) (219)
Short term borrowings (4,532) (4,817)
Long term borrowings (22,662) (17,798)
(26,846) (22,530)
Net debt shown in the Consolidated Balance Sheet (25,147) (15,049)
Notes:
(1) Trade and other receivables and payables included in net debt represent
certain derivative financial instruments.
(2) The amount for the 2008 financial year includes £2,625 million related to put
options over minority interests, including those in Vodafone Essar and Acror,
which are reported as financial liabilities.
 Past Performance of the company

Vodafone was formed in 1984 as a subsidiary of Racal Electronics Plc. Then

known as Racal Telecom Limited, approximately 20% of the company's capital
was offered to the public in October 1988. It was fully demerged from Racal
Electronics Plc and became an independent company in September 1991, at
which time it changed its name to Vodafone Group Plc.

Following its merger with AirTouch Communications, the company changed its
name to Vodafone AirTouch Plc on 29 June 1999 and, following approval by the
shareholders in General Meeting, reverted to its former name, Vodafone Group
Plc, on 28 July 2000.

Achievements in 2008:

• Vodafone acquires a 70% stake in Ghana Telecom for $900 million (July)
• Vodafone launches the M-Paisa mobile money transfer service on
Afghanistan's Roshan. Afghanistan is added to the Vodafone footprint.
(February)

Achievements in 2007:

• A consortium led by Vodafone Group is awarded the second mobile phone

license in Qatar. (December)
• Vodafone announces completion of the acquisition of Hutch Essar from
Hutchison Telecommunications International Limited. (May)
• Vodafone agrees to buy a controlling interest in Hutchison Essar Limited,
a leading operator in the fast growing Indian mobile market, (February)
• Vodafone announces agreements with both Microsoft and Yahoo! to bring
seamless Instant Messaging (IM) services to the mobile which can be
accessed from both the PC and mobile handsets. (February)
• Vodafone signs a series of ground-breaking agreements which will lead to
the mobilizing of the internet. YouTube agrees to offer Vodafone
customers specially rendered YouTube pages on their mobile phones.
With Google, Vodafone announces its intention to develop a location-
based version of Google Maps. With eBay, Vodafone announces it is to
offer the new eBay mobile service to customers, With MySpace.com
Vodafone announces an exclusive partnership to offer Vodafone
customers a MySpace experience via their mobile phones. (February).
Achievements in 2006:

• Sale of 25% stake in Switzerland's Swiss COM (December)

• Sale of 25% stake in Belgium's Proximus. (August)
• The number of Vodafone live! customers with 3G reached 10 million in
March 2006.
• They acquired Telsim Mobil Telekomunikasyon Hizmetleri (Turkey) in
May 2006.
• Launch of mobile TV capability and Vodafone Radio DJ, which offers a
personalised, interactive radio service streamed to 3G phones and PCs.
• ‘Make the most of now’ global marketing campaign launched.

Achievements in 2005:

• We completed the acquisition of MobiFon S.A. (Romania) and Oskar

Mobile a.c. (Czech Republic) (May).
• Launch of Vodafone Simply, a new easy-to-use service for customers who
want to use voice and text services with minimum complexity (May).
• Introduction of Vodafone Passport, a voice roaming price plan that
provides customers with greater price clarity when using mobile voice
services abroad (May).

Achievements in 2004:

• We launched our first 3G service in Europe with Vodafone Mobile Connect

3G/GPRS data card.
• We have 14 Partner Networks with new agreements in Cyprus, Hong
Kong and Luxembourg.
• Vodafone live! with 3G launched in 13 markets (November).

Future Of The Telecom Sector

In recent time telecommunication industry is on a roll. The introduction of new

products and services are revolutionizing communication and enriching our daily
life and demand is soaring, thanks in part to resurgence in the Asian economy,
which is fuelling the growth of the entire industry. Boosted up by the opening up
of new markets, both geographically as well as in terms of expansion of product
and service offerings, the telecom industry is enjoying an unprecedented boom
time. To put it in perspective, the telecom sector has grown, on average, twice
the rate for the global economy between 1990 and 2007. At the macro-economic
level, the contribution of telecom services to the general economy has grown
rapidly from about 1.8% in 1990 to 6.3% of worldwide GDP till 2007. During this
period, the mobile phone has evolved into an indispensable communication,
entertainment and productivity tool, and almost surreptitiously, digital technology
has pervaded every aspect of life.

Expectation is high for the growth of broadband Internet connections and

3G mobile services, considered the two hottest areas in the ICT [information and
communication technologies] sector today. According to ITU[international
telecommunication union], the median speed of broadband Internet available
worldwide was around 256 Kbit/s, but within less than two years, this had
improved to over 1.4Mbit/s.today According to sina.com, a research team lead by
the University of Tokyo created a new record of the Internet speed ,where the
Internet speed reached 9.08 Gbps which could be the fastest practical speed of
Internet 2.

Network operators are just beginning to reap rewards for the huge
investments made in 3G a few years ago. In addition to contributing to increased
sales as result of data access from mobile devices, 3G has opened a large
market in mobile content - downloading of ringtones, wallpapers and games. In
fact the devices themselves with ever-shortening life cycles are getting so rapidly
commoditized that it is the content and value-added services that present the
more lucrative opportunities. Barriers to entry are broken almost every day by
creative content providers in their quest for the next killer application to take the
market by storm.

Asia, with the rapid growth of economies such as China and India, is playing
a pivotal role in shaping the fortunes and future of the telecom industry. Not only
are other regions now looking to Asia to replicate controllable factors that drive
this growth, but also home-grown technology companies from Asia are beginning
to take their place on the global stage with a powerful combination of enticing
content services, innovative pricing models and cutting edge technology

Key focus to make the future colourful:

Faced with the soaring demand and opportunities in new regions, telecom
firms are focusing their attention on two key factors in an effort to increase the
3G subscriber base:

• Creating attractive pricing schemes for data access, and

• Making available "killer" applications that exploit the large bandwidth
available.

The future of the telecom industry is also changing because of the changing
technology in the mobile market. In the mobile phone market, new models are
being rolled out with features targeted at specific user groups. There are feature
phones for business people, with fast email services and document editing
capabilities. On the other end of the spectrum are multimedia phones, further sub
divided into units with advanced imaging and/or audio capability.

In the next few years, there is likely to be further specialization as network

providers offer package bundles comprising of a phone, customized content,
applications and a unique pricing plan targeted for that user group. For example,
one could opt for a package with a multimedia phone with huge storage space for
music, Digital Rights Management (DRM) software for sharing music and a
usage plan that allows limited free downloads of songs and video.

Future Of Vodafone
The future of Vodafone is getting brighter day by day. Their immense customer
based services are adding to the value and goodwill of the company. Their
services such as news alerts, art of living alerts etc. are very much capable of
gathering interest of their customers and even attracting new customers. Their
sense of innovation can be seen in their innovative ads, which takes them
distinctly ahead of their competitors.

Their partnerships with hardware vendors are a viable and successful way of
conducting research into future products and services, at the same time avoiding
duplication of work being done elsewhere. Sometimes, it makes sense to share
knowledge and to join forces in exploring new technology and services.
Vodafone Group R&D has long recognized this, setting up joint research projects
with prominent partners to shorten development time, deepen business
relationships and to enhance its own technology and implementation
competence.

They also maximize their contact with creative researchers by leading funded
research with key universities worldwide and guiding research programmes like
the Wireless World Initiative.

They engage innovators all over the world to bring the customers the best
communications technologies and products.

Innovations in mobile advertising are gaining momentum, along with

developing mobile TV services. Further interest for the future is in rich
communications within community and other applications, which will allow their
customers to make calls, share pictures and other media all within a single
application.

Bibliography

The matter of the above report has been taken from the following
resources:

• www.vodafone .com
• http://en.wikipedia.org/wiki/Vodafone
• www.topix.com/business/telecom
• www.efytimes.com/efytimes/fullnews.asp?edid=22593 - 88k
• http://www.vodafone.com/start/investor_relations/financial_reports.html