Vodafone

History

• May 1998: Vodafone Egypt network went live under the name ClickGSM.
• 18 September 2002: Vodafone signs a Partner Netwrok Agreement with MTC group of Kuwait. The agrrement involved the rebranding of MTC to MTC-Vodafone.
• 29 December 2003: Vodafone signs another Partner Network Agreement with Kuwait's MTC group. The second agreement involves the co-operation in Bahrain and the branding of the network as MTC-Vodafone.
• 3 November 2004: Vodafone announced that it's South African affiliate Vodacom has agreed to introduce Vodafone's international services to its local market.

Vodafone in the United States

In the United States, Vodafone owns 44.4%¹ of Verizon Wireless, the country's second largest mobile carrier. However, the phone company (Verizon) 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 abovementioned incompatibility with the GSM standard used by Vodafone's other networks, and the consequent difficulty of offering roaming between Vodafone's US 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 US operations, and (perhaps more importantly) has no control of dividend policy at Verizon Wireless and is thus entirely at the mercy of Verizon management with respect of 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 ultimately outbid Vodafone and took control of AT&T Wireless and Vodafone's relationship with Verizon has continued.

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 telecommunciations industry.

The following table shows Vodafone's results under UK generally accepted accounting principles (UK GAAP). By the end of its key acquistion 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 is consistently one of 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 one off transactions, and apart from noting the rapid expansion of the group, no conclusions about underlying trends should be drawn from the figures without examining the accounts in more detail.

Corporate sponsorship

• Manchester United football club
• England cricket team
• Scuderia Ferrari Formula One constructor
• DTM (the German touring car series)
• Vodafone Oaks and Vodafone Derby horse races at Epsom.
• Newbury AFC (The football club from Newbury, where Vodafone was founded.)
• Daily Express Life Savers Awards
• David Beckham
• Clare GAA, Ireland (formerly sponsored by Eircell)

References

• ECB dials up £12m deal. BBC Sport (11. December, 2000).
• Ferrari extend sponsorship deal. BBC Sport (16. December, 2004).
• Man Utd rings up £36m shirt deal. BBC News (1. December, 2003).

External links

• Vodafone's global website
• Reports on Vodafone