Vodafone 2002 Annual Report Download - page 9

Information on the Company Vodafone Group Plc 7Annual Report & Accounts and Form 20-F
Information on the Company
History and Development of the Company
Vodafone Group Plc provides a full range of mobile telecommunications services,
including voice and data communications, and is the world’s largest mobile
telecommunications company, in terms of the number of proportionate registered
customers, with a significant presence in Continental Europe, the United
Kingdom, the United States and the Far East through the Company’s subsidiary
undertakings, joint ventures, associated undertakings and investments.
The Group presently operates in 28 countries worldwide, with almost all the
Group’s mobile subsidiaries operating principally under the brand name
“Vodafone”. In the United States the Group’s associated undertaking operates
as Verizon Wireless.
At 31 March 2002, based on the registered customers of mobile
telecommunications ventures in which it had ownership interests at that date, the
Group had approximately 101.1 million customers, excluding paging customers,
calculated on a proportionate basis in accordance with the Company’s
percentage interest in these ventures, and more than 229.1 million registered
venture customers, as described in “Business Overview – Business activities –
Mobile Telecommunications” below.
Following the completion of a number of major business transactions during
the last three years, the Group has acquired interests in certain non-mobile
telecommunications businesses, including Arcor AG & Co KG (“Arcor”), following
the Mannesmann transaction, and Japan Telecom following a tender offer in
October 2001. Vodafone has also established a joint venture with Vivendi
Universal, operating under the brand Vizzavi, to develop content services for the
mobile customer base.
The Company 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, described in more detail below, 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. The Company is incorporated as a public limited
company in England. Its registered office is The Courtyard, 2-4 London Road,
Newbury, Berkshire RG14 1JX, England. Its principal telephone number is
[phone].
The Company’s ordinary shares are listed on the London Stock Exchange and the
Frankfurt Stock Exchange and the Company’s American Depositary Shares
(“ADSs”) are listed on the New York Stock Exchange. The Company had a total
market capitalisation of approximately £77 billion at 24 May 2002, making it the
fourth largest company in the Financial Times Stock Exchange 100 index, or
FTSE 100, and one of the thirty largest companies in the world based on market
capitalisation at that date.
Acquisitions of businesses
The Group has completed a number of major business transactions over the past
three years, the most significant of which were the merger with AirTouch, the
acquisition of Mannesmann AG and, recently, the acquisition of further interests
in Japan Telecom and the J-Phone Group. These transactions, combined with
others, have increased the geographic footprint and substantially increased the
customer base of the Group’s mobile operations, particularly in Europe, and have
significantly impacted the results of operations.
Merger with AirTouch On 30 June 1999, the Company completed its merger
with AirTouch. The Merger created one of the world’s largest international mobile
telecommunications companies, in terms of the number of proportionate
customers, with an extensive presence covering most of Europe and the United
States. Between 30 June 1999 and 30 September 1999, the Company issued
approximately 3,046 million ordinary shares (stated prior to the capitalisation
issue of four shares for every one share held) to transferring AirTouch
shareholders, in addition to a cash consideration of £3,477 million.
Acquisition of Mannesmann AG On 12 April 2000, the Company received
conditional European Commission consent to the acquisition of Mannesmann,
following the receipt of valid acceptances representing approximately 98.62% of
Mannesmann’s issued share capital and 99.72% of its convertible bonds in
issue. As of 31 March 2000, the Company had issued approximately 30,141
million ordinary shares in aggregate to the transferring Mannesmann
shareholders and convertible bond holders. The completion of the Mannesmann
acquisition had a major impact on the Group’s results, bringing in both
Mannesmann Mobilfunk GmbH (“D2”) in Germany and Omnitel Pronto Italia S.p.A
(“Omnitel”) in Italy as subsidiaries in two of Europe’s most important markets for
mobile telecommunications. The businesses have since been rebranded and now
operate as “Vodafone”and “Omnitel Vodafone”, respectively. Mannesmann AG
has also been renamed Vodafone AG.
Subsequently, the Group has increased its ownership interest in Vodafone AG to
99.6% as at 31 March 2002. On 22 April 2002, the Company announced that
its subsidiary, Vodafone Deutschland GmbH, intends to buy out the remaining
minority shareholders in Vodafone AG. See note 35 to the Consolidated Financial
Statements, “Subsequent events”, for further details.
Through the Mannesmann acquisition, the Group also acquired an increased
indirect shareholding in Société Française du Radiotéléphone (“SFR”) in France
and controlling interests in certain fixed line telecommunications operators,
principally Arcor and Infostrada S.p.A. in Italy. The Group also acquired beneficial
ownership of Orange plc, one of the four mobile telecommunications operators
in the UK, as well as interests in Mannesmann’s non-telecommunications
businesses. The Group subsequently sold its interests in Infostrada S.p.A. and
Orange plc and certain other acquired Mannesmann businesses, as described
under “Sales of Businesses”, below.
Acquisition of additional interests in the J-Phone Group The Group’s initial
investment in Japan, following the merger with AirTouch, comprised direct
shareholdings in nine regional mobile telecommunications companies, with
ownership interests ranging from 4.5% to 15%. On 7 October 1999, the
Company announced a series of transactions that resulted in the Company
increasing its equity interests to more than 20% in each of these companies,
and becoming the second largest shareholder, behind Japan Telecom, in each
venture. The total consideration paid for the increased ownership interests in
the three Digital Phone and six Digital Tu-Ka companies was £342 million.
Subsequently, in an agreement with its partners, Japan Telecom and British
Telecommunications plc (“BT”), the Group agreed to restructure its interests in
Japan. This resulted in J-Phone Communications Co., Ltd., in which the Group