Vodafone 2003 Annual Report Download - page 14

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003
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INFORMATION ON THE COMPANY Continued
In November 2000, Vodafone Italy was awarded one of five fifteen year licences
to offer third generation mobile services. In August 2002, the term was extended
to twenty years. The deployment of the UMTS network has currently reached
coverage of 14% of the population. Commercial launch is planned for later in
2003, subject to availability of handsets.
Greece
As at 31 March 2003, the Group had a 64.0% interest in Vodafone Greece, the
second largest of four cellular operators in Greece in terms of number of
customers with an estimated market share at 31 March 2003 of 34.7%. Its
shares are listed on the Athens Stock Exchange and its Global Depositary Shares
are listed on the London Stock Exchange and quoted on NASDAQ. At 31 March
2003, it had a market capitalisation of approximately £1.9 billion ($3.0 billion).
Vodafone Greece increased its registered customer base by 14% to 3,383,000
during the year to 31 March 2003, of which 71% were connected to prepaid
services and 75% were considered active.
As a result of acquisitions of service provider companies completed in prior
periods, at 31 March 2003, Vodafone Greece owned an extensive distribution
network, providing direct access to 84% of its registered customer base.
The GSM network of Vodafone Greece uses both 900 and 1800 MHz spectrum,
providing population coverage of 98.7%. At 31 March 2003, the network
comprised 2,062 base stations connected to 32 BSCs, 16 MSCs, 3 transit
switching centres and 7 stand alone HLRs. All of Vodafone Greece’s
infrastructure assets are held on a freehold basis.
Vodafone Greece launched GPRS service in April 2001, with service now
available for both retail and corporate customers. In July 2001, Vodafone Greece
was awarded one of three 3G licences. In addition, it acquired extra 2G
spectrum, allowing Vodafone Greece to continue to improve the quality of service
for its customers. Vodafone Greece plans to launch its 3G network within the
2004 financial year.
Malta
The Group has an 80% shareholding in Vodafone Malta Limited (“Vodafone
Malta”), the largest operator in Malta in terms of total customers.
During the 2003 financial year, Vodafone Malta increased its registered customer
base by 7% to 163,000 at 31 March 2003 with 92% of the customer base
connected to its prepaid tariffs.
GPRS services were launched in October 2001, with the service available to both
retail and corporate customers. In September 2000, Vodafone Malta was
awarded a 3G licence and is expected to launch 3G services by the end of the
2006 financial year.
Portugal
Vodafone Portugal is the second largest of three operators in Portugal, both in
terms of total customers and service revenues. During the 2003 financial year,
Vodafone Portugal maintained its market leadership position in the contract and
corporate segments and increased its registered customer base by 9% to
3,085,000 at 31 March 2003, of which 88% were active.
Vodafone Portugal operates a nationwide GSM mobile network (currently in the
900 MHz and 1800 MHz bands) covering approximately 100% of the population
of mainland Portugal and the Autonomous Regions of Azores and Madeira. At
31 March 2003, the network consisted of around 2,800 base stations.
In December 2000, Vodafone Portugal was granted one of the three 3G licences.
However, commercial launch of UMTS services in Portugal has been postponed
and is not expected until 31 December 2003.
Spain
Vodafone Spain is the second largest of three operators in Spain. At 31 March
2003, Vodafone Spain had 9,096,000 registered customers, representing growth
of 15% in the year, with 57% of the customer base connected to prepaid tariffs
and 96% of the customer base considered active.
At 31 March 2003, Vodafone Spain’s network consisted of 57 MSCs, 172 BSCs
and 7,063 BTSs, giving population coverage of 98.9%.
In November 2001, Vodafone Spain launched its GPRS service in both the
corporate and the consumer markets and, during the 2003 fiscal year, continued
the development of the GPRS network, adapting the existing infrastructure to
support the growth in data traffic.
In March 2000, Vodafone Spain was awarded one of four 3G licences by the
Spanish government. The deployment of the UMTS network is proceeding
according to plan, consisting of 850 UMTS base stations at 31 March 2003.
Vodafone Spain currently expects to launch 3G services later in the 2004
financial year.
Albania
The Group has an effective 82.4% interest in Vodafone Albania Sh.A. (“Vodafone
Albania”), the second largest cellular operator in Albania in terms of number of
customers. Vodafone Albania launched GSM services on 3 August 2001 and, as
at 31 March 2003, had a registered customer base of 391,000, of which 97%
was connected to prepaid services.
Americas
The Group’s interests in the Americas comprise a 45% ownership interest in
Verizon Wireless, which was formed at the beginning of the 2001 financial year
by the combination of the US cellular operations of the Company, Bell Atlantic
and GTE, and a 34.5% interest in Grupo Iusacell (“Iusacell’’ ).
United States
The Group owns 45% of Verizon Wireless and designates three of the seven
members of Verizon Wireless’ board, while Verizon Communications designates
the four other members.
The mobile telecommunications market in the United States currently consists of
six nationwide competitors and a number of regional and smaller rural carriers.
Verizon Wireless has maintained its position as the leading mobile
telecommunications provider in the United States in terms of number of
customers, network coverage and revenues.
Due to the continued difficult economic conditions and increased market
penetration in the US, net customer growth has slowed considerably from prior
years. However, Verizon Wireless increased its customer base by 13% over the
2002 financial year and ended the year with a registered customer base of
33,324,000, of which 93% were on contract plans.
During August 2002, Verizon Wireless combined the business operations of Price
Communications Wireless Inc. with certain Verizon Wireless assets in a
transaction valued at $1.7 billion, including $550 million in net debt that was
assumed and subsequently redeemed. Under the agreement, a partnership was
formed which Verizon Wireless controls and manages. Price Communications’
partnership interest will be exchangeable into common stock of Verizon Wireless
Inc. (if an initial public offering of such stock occurs), subject to specified