The History of Vodafone

The story of Vodafone is an interesting one. Within two decades, Vodafone has become the telecommunications leader in Global Systems for Mobile networks (GSM). Since it's inception, Vodafone's goal has been one of providing innovative and cutting edge telecommunication services on the largest wireless network on earth. Step by step, Vodafone has engaged in key strategic activity to become closer and closer to that goal each day. Being only second to China Mobile (Hong Kong) in subscriber volume, with over 133 million subscribers, Vodafone by far is a MNE with true role in the shaping the culture of globalization.

Vodafone Group Plc, a twenty year old multinational enterprise, has become a leading player among global firms. It was ranked the second largest multinational in 2004 by the World Investment report. Vodafone Group Plc provides an extensive range of mobile telecommunications services, including voice and data communications, and is the world's largest mobile telecommunications company, with a significant presence in Continental Europe, the United Kingdom, the United States and the Far East through the Company's subsidiary undertakings, associated undertakings and investments. (hoovers.com) Vodafone's goal is to integrate data services and telecommunication into a worldwide network. The story of Vodafone is one of continued success and growth. In 2004 Vodafone had 60,000 employees, a shocking figure, since in 1995 it only comprised of 5000 employees, and only 50 in 1985. Vodafone is traded on both the New York Stock Exchange and London Stock Excahnge.

And then there was Vodafone

Vodafone was formed in 1983 as a joint venture between Racal Electronics (a UK electronics firm) and Millicom (a US telecom company), and was granted one of two mobile phone licenses in the UK. Why the name Vodafone? Well the name would serve as a reflection of the firm's goal of establishing a voice and data services over cellular telecommunication networks. VO represented voice and DA would symbolize data, hence Vodafone. It launched service in 1985 as a Racal subsidiary. In 1988 Racal offered 20% of Vodafone to the public. Consequently, three years later the rest of the firm was to become Vodafone Group.

Then the horizon broadened for Vodafone. It moved beyond the UK in the 1990s. By 1993 it had interests in mobile phone networks in Australia, Greece, Hong Kong, Malta, and Scandinavia. Their strategy was to acquire competitors in order to knock out competition and become more competitive than it's rivals. Vodafone remained committed to establishing the world first global telecommunication network. By 1994, Vodafone began it's implementing strategic multinational activity to spur growth though acquisitions. "With increasing competition at home, Vodafone continued to expand in 1994. It launched or bought stakes in operations in Fiji, Germany, South Africa, and Uganda." Two of the most landmark acquisitions that were those of D2 (Mannesmann; Germany) and Airtouch (US) 1999. D2 was one of the leading telecommunications providers in Germany, operating under Mannesmann. The Mannessman takeover was hostile, and the first of it's kind in Europe; this was the largest "uwanted" acquisition of it's time (Jones). The transaction was valued at $180 billion dollars. The second acquisition was that of AirTouch communications in the United States. Now Vodafone AirTouch, this acquisition gave Vodafone entry into the US market, and the ability to consolidate minority interest in European carriers. This acquisition was valuesd at $60 billion dollars. From this acquisition, and the acquisition of Commnet Cellular (in 2000 for 1.4 billion), Verizon Wireless was formed. Oddly enough, the history between Verizon and Vodafone isn't all honky dory. Ivan Seidenberg, now CEO of Verizon Communications and then head of Verizon predecessor Bell Atlantic Corp., was on the verge of acquiring wireless carrier AirTouch Communications Inc. (made up largely of the former wireless operations of Pacific Telesis Group and U S West Inc). But an AirTouch official broke the news: "Vodafone, then a little- known British company, had topped the bid." Currently, Vodafone own 45% minority stake in Verizon wireless. Subsequently, Airtouch was dropped from it's name, and renamed Vodafone Group Plc. These aquisitons were landmark in Vodafone history, they marked crucial turning points in establish itself as global market leader in GSM telecommunications.

Vodafone in Europe

Vodafone UK added 641,000 net customers in the last quarter of December 2004, taking the total base to 15.2 million customers, an increase of over 9% since last year. Furthermore, Vodafone is committed to continuing this improving trend. It attributes ongoing focus on customer retention and loyalty initiatives for generating positive returns from it's market strategies. The growth in average customers led to a 3% growth in service revenue for the quarter when compared to the same quarter last year. Excluding the effect of the reduction in termination rates, service revenue grew by around 7% in the quarter. Non-voice services as a percentage of service revenue for the year to December 2004 were 17.9%, up from 15.5% for the year to December 2003, with Vodafone live! ( a new service which integrates live streaming video and music to mobile phone users) customers now exceeding 3 million .

Vodafone's strength as a MNE can definitely be witnessed through their European operations. It owns stakes and has acquired dozens of telecommunication operators through out Europe. The most groundbreaking takeover has definitely been the case of Mannessman in 2000. Hostile takeovers remained rare in continental Europe and Japan. The Mannessman takeover was the first large scale hostile takeover by a foreign firm in Germany.

Currently, Net customer additions of 843,000 demonstrated continued strong growth in Germany and resulted in a closing base of 26.9 million customers at the end of the last quarter in 2004. The Germany case of Mannessman got the ball rolling for Vodafone's acquisition strategy. After acquiring Mannessman, for and estimated $180 billion in stock, the number one mobile carrier in Germany, Vodafone sought to acquire other telecommunications carriers that could add value and promote growth for their global GSM network. For instance, the acquisition of Omnitel, the second largest mobile carrier in Italy, was another key acquisition in expanding the GSM network Vodafone sought to create. Moreover, net customer additions were 359,000 in the last of quarter of 2004, lead to a total proportionate customer base of over 17 million. In addition, service revenue for the quarter increased 8% compared to the same period last year. In Spain, Vodafone bought it's rival BT Group's Airtel interests in it's Spanish affiliate. Formerly Airtel Mávil, the company is controlled by Vodafone Group, which in 2003 acquired the 6% it did not already own and began marketing the company as Vodafone Spain. It began offering wireless services over its GSM (global system for mobile communications) network in 1995, winning a mobile license in Spain's second auction . Vodafone Spain added 457,000 net customers in the last quarter of 2004, bringing the total customer base to 10.9 million customers, an increase of over 12% on last year. In addition, Vodafone has a strong presence in Portugal. Vodafone Portugal, Comunicações Pessoais (formerly known as Telecel) is the #2 wireless telecommunications provider in Portugal. It gained entrance to the Portuguese market after acquiring Telecel. Furthermore, in 2001, Vodafone completed a deal to acquire Ericell in Ireland, which is now Vodafone Ireland. Moreover, Vodafone just finished completing a deal with Telesystem International Wireless to gain entrance into the markets of the Czech Republic and Romania, pushing the Vodafone GSM network eastward.

Vodafone in Africa and Asia

In 1998 Vodafone sold its French service provider, Vodafone SA, and bought digital cellular carrier BellSouth New Zealand. This strategic move was calculated because Vodafone felt it was critical to enter the Asia Pacifica market, and felt that it's other assets in France would provide other opportunities for expansion and growth. It also expanded into Egypt by buying a minority stake in Misrfone, an Egyptian wireless telecommunication provider, marking it the largest British investment in Egypt since the Suez Canal. This transaction definitely demonstrates the dedication Vodafone has to create a truly integrated global GSM network.

Large developed-market operators such as Vodafone are shifting their attentions to emerging markets. This shift of attention is due to greater opportunities for growth because developed markets in which they operate in are largely saturated and emerging markets have great growth and profit potential. For example, Vodacom, a subsidiary of Vodafone, is striving to establish themselves in the emerging markets of Africa. Africa is regarded as predominantly hugely untapped market for telecom services. Vodacom, the largest telecom company on the continent with an estimated 14 million subscribers (83% of these are in South AFrica), operates networks in Mozambique, the Democratic Republic of Congo, Tanzania and Lesotho. It is exploring opportunities to re-enter the Nigerian market, from which it withdrew last year. This time, it is co-operating closely with 50% shareholder Telkom in order to meet this goal.

In Japan the closing proportionate base in was 14.8 million, reflecting net customer additions of 36,000 in the last quarter of 2004. The Group's effective ownership in Vodafone Japan reduced from 98.2% to 97.7% following the completion of the merger of Vodafone K.K. and Vodafone Holdings K.K. (previously Vodafone Holdings K.K. was a joint venture with Japan Telecom Holdings) on 1 October 2004. The Japan market continues to be a competitive environment, but increasing market penetration and growth in prepaid customers has lead to a favorable outlook success of Vodafone K.K. in the upcoming year. Service revenue for the quarter decreased by 4% compared to the same quarter last year (last quarter of 2004 vs. last quarter 2003). Non-voice services as a percentage of service revenue of 21.4% for the year to December 2004 were slightly lower than for the year to December 2003 due to the impact of competition. The Group will continue to focus on executing a successful turnaround program in Japan throughout 2005 and into 2006 .

In order to compete with China Mobile (Hong Kong), who serves more than 153 million subscribers, about half of the nation's total, making it China's and the world's leading wireless operator by subscribers. It would be unlikely to think that such a large and thriving corporation is state owned, and is one of the major competitors of Vodafone, a private corporation, but this is exactly the case. Therefore, wireless giant Vodafone has invested ownership in 3% in China Mobile (Hong Kong), to ultimately break into the China market.

Vodafone in the Americas

The Cellco Partnership, an affiliate of Vodafone Group, does business as Verizon Wireless, and is ranked #2 US mobile phone serving nearly 44 million customers nationwide. "Verizon Wireless began operations in 2000 when Bell Atlantic and Vodafone combined their US wireless assets, including their PrimeCo partnership. Verizon Wireless gained GTE's US wireless operations when Bell Atlantic bought GTE to form Verizon Communications, which owns 55% of the company; Vodafone owns 45%. Plans for an IPO, postponed in 2001, were revived but finally withdrawn in 2003 citing lack of funding needs." The story between Vodafone and Verizon has not always been a happy one, due primarly to the bidding war that Vodafone won for Airtouch. Ironically, misgivings were but behind one another when Vodafone approached Verizon to form a joint partnership and hold a minority stake in Verizon Communications. Together, Vodafone and Verizon built a profitable $20 billion business, whose network serves more U.S. wireless customers than any other carrier within the U.S. "But Vodafone's global ambitions and other strains in the relationship - including a bail-out clause some call 'the nuclear option' - put the venture at risk of breaking up". This "nuclear bomb option" is a essentially a part of the contract that takes effect for 60 days at which at this time Vodafone can demand that Verizon pay it $10 billion in return for a large chunk of Vodafone's stake within a 60 day period. In July 2003 was the first time this window of dissolution option took effect. The amount Verizon would have to pay to Vodafone for this pull out option would depend on an appraisal of the venture. In future years, this window again opens for 60 days. Consequently the clause sets an interval period for Vodafone to pull out of this joint venture. The next interval will occur from June 10, 2004-Agust 9, 2004.

Analysts are unclear if Vodafone would opt out of their joint venture with Verizon. Vodafone is primarily frustrated by the company's lack of control in the U.S. It is clear Vodafone aspires to be a household name when it comes to wireless, and it's inability to make it's presence know in one of the most reputable and sought after market , the United States, is a major setback for the corporation's global GSM network goals. Moreover, because it owns just 45% of the partnership, Vodafone hasn't yet been able to get its name attached to a single product of the joint venture. In addition, a critical issue is Vodafone also can't persuade the venture to use a technology compatible with the one Vodafone uses for most of the 28 other countries, and more than 100 million customers, that it serves. "A major force in Europe, Asia and the Mideast, Vodafone is reduced to being a financial investor in the U.S., invisible to consumers. The tensions show that as telecom swiftly becomes global, building international partnerships is fraught with technological and strategic hurdles." Although In late May, Mr. Arun Sarin, Vodafone CEO, refused to rule out use of the opt out option this year; he said "Vodafone wants to be a long-term partner with Verizon, citing the company's strength in the U.S.

Furthermore, it is unclear just how much Verizon should pay Vodafone for its stake, analysts say. And should Vodafone exit, it is also unclear what wireless business it would buy to have a presence in the U.S." Mr. Sarin was all quoted saying that Vodafone is in continuing discussions with Verizon on several issues regarding the possibility of enacting the buy out option. Vodafone could swap Verizon's 23% stake in Vodafone Italy, one of the most successful operations in the Vodafone group. But Vodafone has not ruled out the possibility of opting for a cash payment in case it has the opportunity to buy out another possible asset to join the Vodafone network.

What may be one of the greater obstacles in developing a truly integrated knowledge sharing partnership is the difference in network standards both companies use. It is increasingly frustrating for Vodafone executives to be unable to utilize their own cell phones when doing business in the United States. Why are they unable to do so? Well, the GSM (global system for mobile) network the Vodafone utilizes, which is the European standard) is not compatible with the system the United States utilizes, which is a patchwork of various standards., The system Verizon utilizes is CDMA, Code Division Multiple Access, and consequently Vodafone executives and customers can not use their own cell phones on their joint venture partner's network. Moreover, Verizon says it preparing to roll out technology that it says will permit wireless Web browsing at speeds far faster than Vodafone's "next generation" service. As the case for Vodafone stands, they roam to a GSM carrier in the United States when they attempt to use their cell phones. Unfortunately for Vodafone, the position is held by T- Mobile, a service of Deutsche Telekom AG. T -mobil is a U.S. affiliate service that runs on the same standard as its parent Deutsche Telekom, and Vodafone's main rival in Europe, Deutsche Telekom is successfully taking a huge portion of the U.S. market, and penetrating the American market (the second largest market after China), successfully.

Although Vodafone desperately wants to enter the U.S. market under their own name, a non compete clause in their contract with Verizon limits this option unless Vodafone's interests fall under 20%. Vodafone also was in the bidding war for AT&T wireless (which Cingular snatched up) and Nextel (whom Sprit bought out) in attempts to materialize and broaden the dreams of entering the U.S. market. So it is clear that Vodafone is seeking other means to access the U.S. market by opening new avenues to integrate their 3G technology. But for the near future, this roaming issue may soon be a thing of the past. The lack of compatible technologies could become irrelevant because in coming months Qualcomm Inc. has announced it is currently developing a chipset to incorporate both GSM and CDMA, therefore allowing for seamless roaming between networks. As this develops, it would be interesting to see what steps Vodafone and Verizon take in their goals as either a joint venture or separate competitors.

Moreover, Vodafone and Verizon are at odds in heir strategies for owning wireless assets. Verizon Communications increasingly uses the venture to prop up its declining land-line phone business. As a result Verizon bundles wireless services at a discount with other services. Vodafone considers land lines to have no future for consumers and wants little to do with them. For Verizon a greater percentage ownership in their joint venture would push up revenue, and allow them to reinvest in their land lines and wireless Moreover, Vodafone is also at odds with the lack of imagination of Verizon's strategies to integrate new data technologies into their handsets. This is crucial because it opens new streams for income revenues. For example. Vodafone executives complain that Verizon Wireless has been slow to push next-generation wireless services (i.e.- photo and text messaging). Despite high upfront costs, these have the potential to generate higher-margin revenue. They've caught on faster in Europe and Japan than in the U.S. Revenue from text messages and other data services, for instance, accounts for more than 14% of Vodafone's total revenue. At Verizon Wireless, it accounts for just 1.5%. To Vodafone, this is a clear lack of imagination in research and development and marketing to open up new income streams.

This divergence in strategy is a key puzzle piece to lead up to development in summer 2005 were the opt out potion will come into play. Verizon views the Vodafone position is one mainly of financial benefit, and vice versa. A key hindrance for the future of this joint venture may be the different goals each company has envisioned for the future. Although there has been minimal application of knowledge sharing, Verizon and Vodafone have both to date, positively benefited from their joint venture.

Vodafone has actively tried penetrating the Latin American market. One such attempt was in conjunction with Verizon Wireless in Mexico. Verizon Communications and Vodafone Group together acquired 74% of the company in 2001 from the Peralta family, which founded Iusacell in 1989. But following Iusacell's default on debts, the two companies in 2003 sold their stake to Ricardo Salinas Pliego's Movil@ccess in a deal valued at $7.4 million. Other than the Mexican attempt no other attempts to enter the Latin American markets have been made. It seems Vodafone is more keen on entering the U.S. market under their name in the near future than establishing themselves in South America due to recent American acquisitions attempts. On the other hand, as GSM networks in Latin America continue to establish themselves as leaders in their respective markets, it may be that Vodafone is waiting maybe to further asses growth opportunities in Latin America after failed attempts to enter the U.S. market under their own name. Only after the end of the opt out clause interval this summer will true intentions of the Vodafone plan be revealed. It can only be hypothesized from past Vodafone strategy, that it will attempt to buy out a significant competitor in either one of the markets in order to establish entry under the Vodafone name.

Global MNE Strategy

"At Vodafone, everything we do furthers our desire to create mobile

connections for individuals, businesses and communities. Our Vision is to be the world's mobile communications leader and we're delighted by the prospects for the future of our industry." -Arun Sarin Chief Executive

Vodafone's strategies definitely demonstrate the tactics that they have been employing through MNE theory. Examine their identified strategies we see the embodiment of the eclectic theory of the firm. Find location advantages, utilizing ownership and maximizing internalization, Vodafone has lead the internationalization of the wireless telecommunications sector. It is obvious that key strategies Vodafone employs is acquisition of potentially profit making ventures to enter new markets. In addition, innovation and cooperation are crucially fundamental the structure of the strategic framework Vodafone employs. Currently Vodafone, is enacting a £4 billion share buyback program and a doubling of its dividend, this cash flow is likely to propel acquisitions.

Vodafone identifies six key strategies to sum up their continued success. Vodafone's Success Strategy:

1. Provide superior shareholder returns

2. Delight our customers

3. Leverage global scale and scope

4. Expand market boundaries

5. Build the best global Vodafone team

6. Be a responsible business

Vodafone is constantly engaging in new and innovative activity to keep itself ahead of it's competitors. It not only invests and acquires it's competitors in telecommunications to integrate them into their network to eliminate competition, it also engages in dynamic activities in telecommunications and other industries to advance it's position as the world's leading cellular service provider. One such joint venture is that of Toshiba in Japan. It currently is working with Toshiba to market a range of exclusive 3G (3rd generation handsets compatible with it's newest version of GSM technology which integrates wireless communications with wireless data access ) handsets in Europe, Australia, Japan and New Zealand, starting in the second quarter of 2005. Building on their partnership in Japan, where Tokyo-based Toshiba supplies handsets to Vodafone KK, this expanded relationship marks Toshiba's entrance into the European mobile phone market. The first handset to be made available is the Vodafone TS 921, a multi-functional device complete with 1.9 megapixel camera with auto focus. Furthermore, Vodafone plans to launch a service across Europe that will deliver e-mails to handsets from several different manufacturers. "The move will ratchet up the competitive pressure on Research In Motion Ltd, which currently dominates the market for so-called push e-mail with its popular Blackberry device. Like the Blackberry, Vodafone's push e-mail service automatically delivers users' incoming e-mails to their cell phones so they can read them while away from a computer. Vodafone plans to announce that the service, already operating in Germany and Italy, will become available throughout Europe in 2005". This will provide a third revenue stream for Vodafone, in addition to phone calls and text messages. Moreover, Vodafone, who has a joint partnership with Microsoft in developing programming technology for wireless handsets, is about to introduce to the European market the Microsoft Smartphone. This is no ordinary cell phone, or the counterpart of Pocket PC phones with limited computer features. In other words, Vodafone totally goes for Windows Mobile cell phone, a complete cellular phone and computer in one. The model Motorola MPx220 (a Windows Mobile cell phone) will go on sale soon at Vodafone in Europe, and then explore possibilities for progressive expansion into other markets. Another dynamic partnership such as the Microsoft one, is the partnership held with the French company Vivendi Universal. Vivendi Universal is the parent company of Vizzavi Internet Portal. Vodafone Group also has expanded its wireless data offerings and it took full ownership in the Vizzavi Internet portal, buying out France's Vivendi Universal, its original 50% partner in the operation. Acquiring full ownership of the Vizzavi Internet Portal allows for Vodafone to expand it's horizons in integrating more complex data services to it's handsets through wireless internet connections. All these key activities demonstrate strategic moves that Vodafone is undertaking to advance it's position as the leading telecommunications service provider in the cellular industry.

On the other hand, Vodafone is also engaging in other profit seeking activity outside the telecommunications sector where it can apply knowledge and expertise, while integrating technology developed through telecommunications sector and successfully applying it in other innovative ways. For example, Vodafone Sweden has concluded a partnership deal with Actaris, one of the world's leading manufacturers of electricity meters and systems. "The two companies have joined forces to provide power companies with a package solution including a new type of electricity meter (with inbuilt SIM-card) which can be read automatically via Vodafone Sweden's mobile network. The move was motivated by new legislation that will require Swedish power companies to read all their electricity meters at least once a month by 2009." Vodafone Sweden and Actaris have jointly developed a machine-to-machine communication service that enables power companies to read their electricity meters (and gas and water meters) via Vodafone's GSM network . This joint solution will furnish power companies with a whole new type of meter-reader with inbuilt SIM-card, operation and maintenance of communication systems and a central data system that collects and transfers meter data to the power companies' billing systems. The SIM card is essentially the computer chip that serves as the brain of cellular phones. The technology will allow for the requirement of utlity men to check meters to become obsolete. Electricity meters will be read at night time when mobile traffic is lighter via network communication through the SIM card. This helps ensure the optimal utilization of the mobile network and allows larger volumes of meter data to be transferred to the power companies' billing systems receiver. Actaris, Scandinavia, along with Vodafone Sweden as a key step in growing new technology through joint ventures, to propel innovation in the utility business in other countries. After a trial and implementation phase in Sweden, both Actaris and Vodafone Sweden hope to integrate this new technology into new markets.

Vodafone's also prioritizes cooperation and an integral part of it's innovation strategy. This is exemplified by Vodafone establishment of global distribution channel for its business products and services through leading IT resellers. "Building on existing national IT distribution agreements, Vodafone has extended its relationship with both Ingram Micro and Tech Data with new agreements that include the provision of global marketing and sales support." The current Vodafone products and services available include the award winning Vodafone Mobile Connect 3G/GPRS datacard range, The datacard is Europe's first high speed lap top component that allows customers to be connected to all their usual office applications while on the move. In addition, as stated before, Vodafone will also make available the Blackberry from Vodafone range, providing the basic features of a mobile phone, with the benefits of being able to access e mail and attachments whilst traveling, in addition to the 3G/GPRS datacard component as a Blackberry feature. As part of its overall strategy of channel commitment, Vodafone will provide specific product training and education to Ingram Micro and Tech Data's sales network and certification of key computer product resellers as approved resellers of business mobility systems. By internalizing operations such as these, Vodafone can ensure quality, through employee training, and have greater control in the production processes of it's components. Moreover, internalization ends arms length relationships that could prove to be more costly in the long run, and gives a competitive edge to the company in the time required to complete production by speeding up the time required to complete production. Chief Marketing Officer, Peter Bamford stated: "These new partnerships allow Vodafone to use an effective channel for selling our mobile data products, in addition to our retail stores and direct sales force. Partnering with the two leading pan-European distributors who have significant market reach means a greater number of business customers will have wider access to the Vodafone range of business products and services."

Conclusion: so where does the future lie?

Vodafone is currently working on expanding it's 3G live, the newest version of their GSM network, to all of their current markets. Already enacted in 13 European markets, the goal is to go globally within the next few years as promptly as possible. New entrants to its markets threaten Vodafone's earnings. Consequently, Vodafone places high priorities on being innovative. Exploiting their position as a global leader allows them to remain competitive in all the markets it conduct business due to the overwhelming reach of their networks, a truly appealing characteristic to customers who are constantly traveling. Moreover with the launch of its new 3G technology, Vodafone must master the transition flawlessly in order to maintain their top ranking among service providers. They also have the benefit of exploiting their economy of scale and scope as the diversify technology and production across markets and industry lines. Vodafone has grown primarily through acquisitions, and their participation of Greenfield investments is practically non existent if you exclude it's initial bid for it's UK wireless license when it was still Racal. The strategic alliances that Vodafone has participated in tell a story of true innovation and cooperation to compliment their aggressive strategy of competitor acquisition.

Vodafone has consistently demonstrated a storyline of growth through acquisitions, entering in markets in Eastern Europe, Asia, and South Pacific. Currently Vodafone owns stakes in wireless carriers in Albania, Australia, Belgium, China, Egypt, Fiji, France, Germany, Greece, Hungary, Italy, Japan, Kenya, Malta, the Netherlands, New Zealand, Poland, Portugal, Romania, South Africa, Spain, Sweden, Switzerland, the UK, and the US. Examining a list of affiliates and subsidiaries, Vodafone's strategy becomes very apparent. Currently major Vodafone affiliates range from various countries (see Tabel 1) and as long a markets promise profits and sustained growth, Vodafone will continue to actively engage in MNE activity to expand it's global telecommunications reach.

TABLE 1

Selected Subsidiaries and Affiliates

• Belgacom Mobile S.A. (Proximus, 25%, wireless network operator, Belgium)

• Cellco Partnership (Verizon Wireless, 45%, wireless network operator, US)

• China Mobile (Hong Kong) Limited (3%, wireless network operator, China)

• Europolitan Vodafone AB (formerly Europolitan Holdings AB, wireless network operator, Sweden)

? Vodafone Stores AB (mobile equipment retail sales, Sweden)

? Vodafone Sverige AB (wireless network operator, Sweden)

• Groupe SFR Cegetel (29%, telecommunications services and holding company, France)

? Société Française du Radiotéléphone S.A. (SFR, 44%, wireless network operator, France)

• Japan Telecom Co. Ltd. (67%, fixed-line telecommunications carrier)

• MobiFon S.A. (Connex GSM, 20%, wireless network operator, Romania)

• Polkomtel S.A. (Plus GSM, 20%, wireless network operator, Poland)

• Safaricom Limited (35%, wireless network operator, Kenya)

• Swisscom Mobile A.G. (25%, wireless network operator, Switzerland)

• Vodacom Group (Pty) Limited (35%, holding company, South Africa)

• Vodafone AG (formerly Mannesmann AG, holding company, Germany)

? Arcor AG & Co KG (74%, fixed-line operator, Germany)

• Vodafone Albania Sh. A. (99.7%, wireless network operator)

• Vodafone Americas Inc. (holding company, US)

• Vodafone D2 GmbH (formerly Mobilfunk GmbH, wireless network operator, Germany)

• Vodafone Egypt Telecommunications SAE (formerly Misrfone Telecommunications Company SAE, 67%, wireless network operator)

• Vodafone España, S.A. (formerly Airtel Mávil S.A., wireless network operator, Spain)

• Vodafone Europe B.V. (holding company, The Netherlands)

• Vodafone Fiji Limited (49%, wireless network operator)

• Vodafone Group Services Limited (global products and services provider)

• Vodafone Holding GmbH (formerly Vodafone AG, holding company, Germany)

? Arcor AG & Co KG (74%, fixed-line operator, Germany)

• Vodafone Holdings Europe S.A. (holding company, Spain)

• Vodafone K.K. (formerly J-PHONE Co., Ltd. (98%, wireless network operator holding company, Japan)

• Vodafone Hungary Mobile Telecommunications Limited, (formerly V.R.A.M. Telecommunications Company Limited, 88%, wireless network operator, Hungary)

• Vodafone Information Systems GmbH (billing, IT, and B2B services, Germany)

• Vodafone International Holdings B.V. (holding company, The Netherlands)

• Vodafone Investments Luxembourg S. a. r.l. (holding company)

• Vodafone Ireland Limited (formerly Eircell, wireless network operator)

• Vodafone Libertel N.V. (wireless network operator, The Netherlands)

• Vodafone Limited (wireless network operator, UK)

• Vodafone Malta Limited (wireless network operator)

• Vodafone Network Pty Limited (wireless network operator, Australia)

• Vodafone New Zealand Limited (wireless network operator)

• Vodafone Omnitel N.V (formerly Omnitel Pronto Italia, 77%, wireless network operator, Italy)

• Vodafone-Panafon Hellenic Telecommunications Company S.A. (99.4%, telecommunications and wireless network operator, Greece)

? Unifon S.A. (mobile communications services provider, Greece)

• Vodafone Portugal-Comunicações Pessoais, S.A. (formerly Telecel Comunicações Pessoais, wireless network operator, Portugal)

TABLE 2

2004 Sales Percent of Total

Mobile telecommunications

Southern Europe 29%

Northern Europe 22%

UK & Ireland 16%

Asia Pacific 26%

Middle East & Africa 1%

Other operations

Europe 3%

Asia Pacific 3%

TABLE 3

2004 Year-End Financials

Debt Ratio

10.9%

Cash (£ mil.)

2,597.0

Current Ratio

0.88

Long-Term Debt (£ mil.)

22,529.0

Shares Outstanding (mil.)

6,826.4

Dividend Yield

1.3%

Dividend Payout

-

Market Cap (£ mil.)

163,151.0

Five Year Graph of Vodafone (VOD) vs. Wireless Communications 1991- 2005 (JAN)

Five Year Graph of Vodafone (VOD) Stock Prices on NYSE 1991- 2005 (JAN)