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Vodafone Group Plc Annual Report & Accounts and Form 20-F 2003 7
Formation of Verizon Wireless
On 3 April 2000, the first stage of the transaction for the combination of the US
cellular operations of the Company, Bell Atlantic Corporation (“Bell Atlantic”) and
GTE Corporation (“GTE”) was completed. The combined entity, which initially
consisted of the US cellular operations of AirTouch and Bell Atlantic, was
launched as Verizon Wireless. Following completion of the merger of Bell Atlantic
and GTE to form Verizon Communications, the second stage of the transaction
was completed by the contribution of the US cellular operations of GTE to Verizon
Wireless on 10 July 2000. The Group owns 45% of Verizon Wireless.
The formation of Verizon Wireless resulted in net proceeds to the Group of
approximately £2.5 billion relating to the assumption of Group debt agreed with
the other parties. Further proceeds of £1.8 billion and £0.2 billion were realised
during the 2001 and 2002 financial years, respectively, following the disposal of
overlapping properties in the US, such disposals being a condition of the
regulatory approval of the transaction. No further proceeds were received during
the 2003 financial year.
Business Overview
Revenues and operating income
The following table shows consolidated Group turnover and consolidated total Group operating loss for the three years ended 31 March 2003, by geographic region.
Years ended 31 March
Group turnover Total Group operating (loss)/profit
2003 2002 2001 2003 2002 2001
£m £m £m £m £m £m
Mobile telecommunications:
Northern Europe 6,057 5,432 4,511 1,148 757 618
Central Europe 4,775 4,177 4,031 (5,027) (4,833) (4,991)
Southern Europe 8,051 6,743 4,479 (1,839) (1,971) (2,076)
Europe 18,883 16,352 13,021 (5,718) (6,047) (6,449)
Americas 512 9 (138) (555) (210)
Asia Pacific 8,364 4,072 713 704 (198) (92)
Middle East and Africa 290 306 308 170 131 181
27,542 20,742 14,051 (4,982) (6,669) (6,570)
Other operations:
Europe 854 998 953 (214) (4,733) (419)
Asia Pacific 1,979 1,105 – (255) (432) –
30,375 22,845 15,004 (5,451) (11,834) (6,989)
Other operations analysed in the above table principally comprise the results of the Group’s interests in fixed line telecommunications businesses in Germany (Arcor),
France (Cegetel) and Japan (Japan Telecom).
Total Group operating losses of £5,451 million for the year ended 31 March 2003 (2002: £11,834 million, 2001: £6,989 million) include exceptional operating costs of
£576 million (2002: £5,408 million, 2001: £320 million) and goodwill amortisation of £14,056 million (2002: £13,470 million, 2001: £11,873 million). See note 3 to the
Consolidated Financial Statements, “Segmental analysis” for a further analysis of business segment information.