Vodafone 2003 Annual Report Download - page 13

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003 11
to withdraw from the Swedish market and the 3G joint venture described above.
As a result, Vodafone Sweden may have to invest more in the network in order to
achieve the national coverage required under the terms of its licence. Full
commercial launch of 3G services is expected on 1 January 2004, at which time
the licence terms require population coverage of 99.98%.
France
At 31 March 2003, the Group’s effective ownership interest in SFR was
approximately 43.9%, comprising a direct holding of 20% and an indirect
holding through the Group’s interest in Cegetel.
SFR has the second largest customer base of the three mobile carriers in the
French market, with an estimated market share of 35%. During the 2003
financial year, SFR expanded its customer base by 7% to 13,324,000 registered
customers at 31 March 2003. During the 2002 financial year SFR opened its
GPRS network for service.
Central Europe
The Group’s interests in Central Europe comprise subsidiary undertakings in
Germany and Hungary and associated undertakings in Poland and Switzerland.
Below is a summary of the Group’s business activities in its mobile
telecommunications markets in Central Europe.
Germany
Following the buy-out of the remaining minority shareholders in Vodafone Holding
GmbH on 21 August 2002, the Group has an effective 100% interest in
Vodafone D2 GmbH (“Vodafone Germany”).
Customer growth in the German cellular market was over 5% in the year to
31 December 2002, compared with over 16% growth in the previous calendar
year. Germany is the largest mobile market in Europe based on customer
numbers and is one of the Group’s leading European networks in terms of
messaging and data revenues, which represented 16.4% of total monthly service
revenues for the 2003 financial year.
At 31 March 2003, Vodafone Germany had 22,940,000 registered customers,
representing growth of over 7% in the year. This growth was principally
attributable to contract customers, which increased 15% and now represent
47% of the closing customer base, up from 43% at 31 March 2002. The
continued removal of inactive prepaid customers from the total customer base
also resulted in active customers representing 92% of the total registered
customer base at 31 March 2003, compared with 91% at 31 March 2002.
During the year, Vodafone Germany continued to make significant investments in
its network which, at 31 March 2003, consisted of 148 MSCs in service and
over 19,000 base stations, giving declared population coverage of over 99%.
Germany participated in the Group’s Vodafone live! launch and became the first
network operator in Germany to launch a combined camera phone and online
portal. By the end of March 2003, 405,000 Vodafone live! handsets had been
activated. In April 2002, Vodafone Germany became the first German operator to
launch MMS services. Initially available to contract customers only, in November
2002 the service was made available for prepaid customers.
Following the acquisition of a twenty year 3G licence in Germany, the 3G network
infrastructure rollout is proceeding according to plan and in accordance with the
licence obligation to provide at least 25% population coverage by the end of
2003. During the 2003 financial year, Vodafone Germany successfully completed
voice and data calls on its pilot 3G networks.
Hungary
The Group currently has an effective 83.8% interest in Vodafone Hungary, the
smallest operator in Hungary.
At 31 March 2003, Vodafone Hungary’s registered venture customers amounted
to 954,000, representing growth of over 71% in the year and increasing its
market share from 10.5% at 31 March 2002 to 13.4% at 31 March 2003.
During the 2003 financial year, Vodafone Hungary has also improved its network
coverage, despite the cancellation of the National Roaming Agreement by a
competitor during December 2002. In an accelerated infrastructure roll-out
programme, Vodafone Hungary has constructed a further 297 sites during the
year, taking the total at 31 March 2003 to 1,461 sites.
Vodafone Hungary launched GPRS services on 15 July 2002, MMS services on
9 December 2002 and Vodafone live! on 3 February 2003.
Switzerland
The Group has a 25% interest in Swisscom Mobile S.A. (“Swisscom Mobile”), the
largest mobile telecommunications company in Switzerland, with an estimated
market share of 65%. At 31 March 2003, Swisscom Mobile had 3,635,000
customers compared with 3,428,000 customers at 31 March 2002.
Poland
The Group has a 19.6% interest in Polkomtel S.A. (“Polkomtel”), the second
largest operator in Poland with an estimated market share of 33% and a
customer base of 4,839,000 at 31 March 2003.
Southern Europe
The Group’s interests in Southern Europe comprise subsidiary undertakings in
Italy, Albania, Greece, Malta, Portugal and Spain, and an associated undertaking
in Romania. At 31 March 2003, the Group’s subsidiaries in Greece and Portugal
were also listed on public stock exchanges. However, Vodafone Portugal’s shares
were de-listed from the Euronext Lisbon exchange on 22 May 2003.
Below is a summary of the Group’s business activities in its major mobile
telecommunications markets in Southern Europe.
Italy
In November 2002, Vodafone Omnitel S.p.A. and certain other group companies
were merged into a single entity, Vodafone Omnitel N.V. (“Vodafone Italy”). The
Group has an effective ownership interest of 76.8% in Vodafone Italy, the second
largest of three operators in Italy. On 7 October 2002, Vodafone Italy purchased
certain assets from the former operator, “Blu”, which exited the market through a
break up.
The Italian market is characterised by a high level of prepaid product and one of
the highest penetration rates (nearly 97%) in any country in the world. Vodafone
Italy’s registered customer base grew by 10% in the year and was 19,412,000 at
31 March 2003, of which 92% was on prepaid tariffs. At 31 March 2003,
Vodafone Italy had a market share of approximately 35.6%, in terms of registered
customers and 95% of the registered customer base was active.
At 31 March 2003, Vodafone Italy’s network consisted of 123 MSCs and 9,353
base stations, giving population coverage of 99%. During the 2002 financial year
Vodafone Italy launched its GPRS service in both the corporate and consumer
markets. The services were initially provided free of charge, with services
charged from June 2001 for corporate customers and February 2002 for other
consumers.