Vodafone 2003 Annual Report Download - page 12

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
10
INFORMATION ON THE COMPANY Continued
The reasons for the changes in the year to the Company’s effective percentage
ownership interests in the Netherlands, Sweden, Germany, Hungary, Greece,
Portugal, Spain and Australia are discussed in the description of each region’s
business activities below, or under “Information on the Company – History and
Development of the Company”.
Northern Europe
The Group’s interests in Northern Europe comprise subsidiary undertakings in the
United Kingdom, Ireland, the Netherlands and Sweden, and associated
undertakings in Belgium and France.
Below is a summary of the Group’s business activities in its major mobile
telecommunications markets in Northern Europe.
United Kingdom
Vodafone UK Limited (“Vodafone UK”) is one of five cellular network operators in
the United Kingdom and, according to the latest quarterly review of the UK
telecommunications regulator (“Oftel”), Vodafone UK is the largest in terms of
mobile service revenue share for outbound calls, with a lead of seven percentage
points over its nearest competitor.
At 31 March 2003, Vodafone UK had 13,300,000 registered customers, an
increase of 1% since 31 March 2002. Of the total registered customer base, 9%
were inactive customers, the majority of whom were prepaid customers.
Vodafone UK continued to focus on the acquisition of high value customers and
increased the contract customer base by 474,000 in the year to 5,488,000 at
31 March 2003, compared with 5,014,000 at 31 March 2002. At 31 March
2003, Vodafone UK’s in-house service provider companies accounted for 57% of
the contract customer base, which includes 370,000 customers arising from the
acquisition of Cellular Operations Limited during the year.
Vodafone UK continually invests in its network infrastructure to improve network
quality and maintain its position as the leading network, in terms of customer
satisfaction. Vodafone UK continues to be recognised in Oftel surveys as the
leading UK network, with a call success rate of 98.3%.
At 31 March 2003, Vodafone’s UK digital network consisted of 108 mobile
switching centres (“MSCs”), 8,524 digital base station controllers (“BSCs”) and
20,817 base transceiver stations (“BTSs”) in service, giving declared population
coverage of 99% of the UK.
Vodafone UK has now been operating its nationwide GPRS network for over two
years, offering an enhanced range of products and services. GPRS provides a
range of services for business customers to enable access to corporate systems
such as e-mail and their company intranet. More generic services allowing
access to the Internet from either the handset or through a Personal Digital
Assistant or PDA, or laptop computer enable all customers to gain access to the
Internet at speeds which are typically faster than standard home or office
telephone lines. In November 2002, Vodafone UK launched Vodafone live!, part of
a Group-wide programme designed to offer the customer an integrated
experience of handset and services. Through Vodafone live!, Vodafone UK is now
able to offer its customers additional services such as multimedia messaging,
allowing users to send and receive graphics and pictures. Further details on
Vodafone live! can be found under “Strategic Developments – Global services”
elsewhere in this document.
Vodafone UK was awarded one of the five twenty year 3G licences in the auction
conducted by the UK government in April 2000 and, following a period of
network investment and construction, plans to open its 3G network for service
later in 2003. During the 2003 financial year, Vodafone UK invested in excess of
£100 million in its 3G infrastructure.
Ireland
Vodafone Ireland Limited (“Vodafone Ireland”) is the leading provider of mobile
telecommunications services in Ireland, with 1,740,000 registered customers at
31 March 2003, maintaining its leadership position in a highly penetrated market
with an estimated market share of 56%.
Vodafone Ireland offers a range of voice and data services to its prepaid and
contract customers and also offers a wide-area paging service through its wholly
owned subsidiary, Eirpage.
At 31 March 2003, Vodafone Ireland’s mobile network consisted of a GSM
900/1800 digital network comprising 15 MSCs, 25 BSCs and 1,957 BTSs,
providing population coverage of approximately 98.9%. All of Vodafone Ireland’s
infrastructure assets are held on a freehold basis.
Vodafone Ireland was awarded one of four 3G licences, with a twenty year
duration period, via a “beauty contest”in July 2002. In accordance with the
licence commitments, Vodafone Ireland commenced 3G services on 1 May
2003, providing coverage to approximately 33% of the population. In accordance
with the licence terms, Vodafone Ireland is required to provide population
coverage of 53% and 85% by September 2004 and December 2007,
respectively. Accordingly, Vodafone Ireland continues to invest in its 3G network.
The Netherlands
As at 31 March 2003 the Group had a 97.2% shareholding in Vodafone
Netherlands, a digital GSM network operator.
During the year ended 31 March 2003, Vodafone Netherlands maintained its
position as the second largest mobile network operator by number of registered
customers in the Dutch market. One of five GSM operators in the Netherlands, its
total registered customer base stood at 3,273,000 at 31 March 2003. Prepaid
customers made up 59% of the registered customer base at 31 March 2003,
with the proportion of active customers estimated to be 93%.
At 31 March 2003, Vodafone Netherlands’ mobile network consisted of a GSM
900/1800 digital network comprising 24 MSCs, 28 BSCs and 2,241 BTSs
providing population coverage of approximately 99%. All of Vodafone
Netherlands’ infrastructure assets are held on a freehold basis.
In 2001, Vodafone Netherlands was successful in winning one of five fifteen year
3G licences in the Netherlands. Under the terms of the licence, population
coverage must be at least 12% by 1 April 2004.
Sweden
The Group has a 99.1% interest in Vodafone Sweden, Sweden’s third largest
mobile network operator. During the year, Vodafone Sweden’s registered
customer base increased by 14% to 1,325,000, 70% of which were connected
on the more profitable contract tariffs.
At 31 March 2003, Vodafone Sweden’s mobile network consisted of a GSM
900/1800 digital network comprising 10 MSCs, 42 BSCs and 2,400 BTSs,
providing population coverage of approximately 96%, despite land mass
coverage of only 57%.
During the 2001 financial year, Vodafone Sweden was awarded a fifteen year 3G
licence, for no fee, in a “beauty contest”. The extensive infrastructure rollout
requirements are being satisfied primarily through a network build programme
which Vodafone Sweden has undertaken as a joint venture with Hutchison
Investor 3G Access AB and Orange Sverige AB, other 3G licence holders in
Sweden. It is expected that the joint venture company will build and operate the
infrastructure to provide coverage for up to 70% of the population, with Vodafone
Sweden building and operating infrastructure to provide coverage for a further
30% of the population. However, Orange Sverige AB has announced its intention