Vodafone 2003 Annual Report Download - page 35

Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003 33
Asia Pacific
In the Asia Pacific Region, turnover from mobile telecommunications businesses
increased mainly from the full year inclusion of turnover from J-Phone Vodafone,
which became a subsidiary of the Group on 11 October 2001. Turnover relating
to J-Phone Vodafone increased from £3,323 million for the year ended 31 March
2002 to £7,539 million for the year ended 31 March 2003. At 31 March 2003,
J-Phone Vodafone had 13,912,000 customers, representing an increase of 14%
from 31 March 2002. J-Phone Vodafone continues to produce the highest ARPU
in the Group and, although voice ARPU declined as expected, data and content
revenues continued to improve and, in March 2003, data revenues represented
21.7% of services revenues, compared to 19.8% in March 2002. This increase
was largely driven by the increase in J-Sky web usage and content revenue,
together with the continued success of J-Phone Vodafone’s other data offerings,
“Sha-mail”and “Movie Sha-mail”.
The remaining increase of £76 million for the Asia Pacific Region arose from the
Group’s businesses in Australia and New Zealand.
Middle East and Africa
In the Middle East and Africa Region, turnover, which represents the Group’s
operations in Egypt, decreased as a result of the continuing devaluation of the
Egyptian pound. When measured in local currency, turnover increased 17% for
the year ended 31 March 2003, largely attributable to growth in the customer
base, which increased over 31% to 2,263,000 at 31 March 2003.
Data revenues
In the 2003 financial year, mobile data, including SMS, data and Internet services
and GPRS services, accounted for 14.6% of service revenues in the Group’s
controlled businesses, compared with 11.1% for the 2002 financial year. The
14.6% comprised 11.0% from messaging services and 3.6% from other data
services. In the month of March 2003, data service revenues reached 15.6% of
service revenues, an increase of 2.1 percentage points from March 2002. The
increase in data revenues reflects the continued success of the Group’s data
products and service offerings, including, in particular, increased SMS usage in
the Group’s controlled networks.
During the period, Vodafone live! and Mobile Office from Vodafone, were
launched in most of the Group’s European markets, both of which are expected
to generate further growth in non-voice service revenues through games
downloads, picture messaging and other content and information services.
Further details on these two new service offerings can be found under “Strategic
Developments – Global services”elsewhere in this document.
The Group’s main markets of Germany, Italy, the United Kingdom and Japan, all
experienced increases in mobile data revenues, with SMS revenues continuing to
be the principal component of these revenue streams, except in J-Phone
Vodafone in Japan where Internet data remains the principal component due to
the high proportion of J-Phone Vodafone’s customer base with Internet-capable
phones. An analysis of data revenues as a percentage of total service revenues
in the Group’s main markets is shown in the tables below.
Year to 31 March 2003
Market Messaging Data Total
United Kingdom 13.4% 1.0% 14.4%
Germany 15.6% 0.8% 16.4%
Italy 10.8% 0.5% 11.3%
Japan 7.5% 12.8% 20.3%
March 2003 (month only)
Market Messaging Data Total
United Kingdom 14.0% 1.2% 15.2%
Germany 15.6% 1.0% 16.6%
Italy 11.2% 0.6% 11.8%
Japan 7.7% 14.0% 21.7%
Other operations
Turnover from other operations, which comprises turnover relating to the Group’s
interests in its fixed line businesses in Japan (Japan Telecom) and Germany
(Arcor), and turnover from Vodafone Information Systems GmbH, a German IT
and data services business, increased from £2,103 million for the year ended
31 March 2002 to £2,833 million for the year ended 31 March 2003, primarily
as a result of the full year inclusion of Japan Telecom following completion of the
Group’s acquisition of a controlling stake in October 2001.
Total Group operating profit, before goodwill amortisation and exceptional
items
Before goodwill amortisation and exceptional items, total Group operating profit
increased 30% from £7,044 million for the year ended 31 March 2002 to
£9,181 million for the year ended 31 March 2003, due to a combination of the
full year inclusion of results from businesses acquired in the previous period, and
growth in other businesses. Changes in exchange rates beneficially impacted the
reported growth in the Group’s operating profit, before goodwill amortisation and
exceptional items, as a result of a stronger euro offset by a weaker US dollar and
yen. Translating the results of overseas companies at exchange rates prevailing
in the prior year would reduce reported growth by £25 million.
After goodwill amortisation and exceptional items, the Group reported an
operating loss of £5,451 million for the year ended 31 March 2003, compared
with £11,834 million for the year ended 31 March 2002 and is discussed below.
Mobile telecommunications
Year ended 31 March Increase/
2003 2002 (decrease)
£m £m %
Northern Europe 2,222 1,685 32
Central Europe 1,616 1,543 5
Southern Europe 2,495 2,072 20
Americas 1,219 1,317 (7)
Asia Pacific 1,421 589 141
Middle East and Africa 197 161 22
9,170 7,367 24
Northern Europe
Total Group operating profit, before goodwill amortisation and exceptional items,
for the Northern Europe Region, increased mainly due to Vodafone UK, where
total Group operating profit, before goodwill amortisation and exceptional items,
improved by 19% from £941 million for the year ended 31 March 2002 to
£1,120 million for the year ended 31 March 2003 as a result of the increased
turnover, as described in more detail above, and a continued focus on cost
efficiencies. In the UK, the average cost to connect decreased from £67 to £56,
within which contract cost to connect increased in the same period from £116 to
£117 and prepaid cost to connect decreased from £26 to £10, reflecting
continued efforts to reduce handset subsidies.