Vodafone 2006 Annual Report Download - page 20

18 Vodafone Group Plc Annual Report 2006
Business Overview
continued
Summary of Group products and services
The following table summarises the availability of the Group’s most significant products
and services as at 31 March 2006. Only the markets in which Vodafone products and
services are available to customers are represented below:
Country
Subsidiaries(1)
Germany • • • • • • • •
Spain • • • • • • •• •
UK • • • • • • •• •
Albania *•
Australia •• •• •• •
Egypt • • •
Greece • • • • • • •• •
Hungary •* •• ••• •
Ireland • • • • • • • • •
Malta • • • • •
Netherlands • • • • • • •• •
New Zealand •• •• •••
Portugal • • • • • • • •
Romania •
Joint Ventures
Fiji •
Italy • • • • • • • • •
South Africa • • • •
Associates
France • • • • • • • • •
Belgium •• •••
Switzerland • • • • •
Partner Markets
Austria • • • • •
Bahrain • •
Croatia •• •• •
Cyprus • *
Denmark •• •
Estonia •• •
Finland • • •
Hong Kong • •
Iceland • • • •
Kuwait •
Luxembourg • • •
Singapore *•
Slovenia • • •
Sweden • • • • • • • •
Total markets 24 17 24 26 25 12 14 13 17
Note:
(1) The following information is presented for continuing operations only. Japan is classified as a discontinued
operation.
Key:
•Available throughout the 2006 financial year
• Launched in the 2006 financial year
*Launched since 31 March 2006
One Vodafone
The One Vodafone initiatives are aimed at achieving cost savings and enhancing
revenue for the Group’s controlled mobile businesses and the Group’s jointly controlled
mobile business in Italy. The Group has previously targeted that, in the 2008 financial
year, the total of operating expenses (being the aggregate of payroll and other operating
expenses) and capitalised fixed asset additions, would be broadly similar to those for the
2004 financial year, assuming no significant changes in exchange rates and after
adjusting for acquisitions and disposals.
The Group has also previously targeted mobile capitalised fixed asset additions in the
2008 financial year to be 10% of mobile revenue as a result of the initiatives.
Further, revenue enhancement initiatives were expected to deliver benefits equivalent to
at least 1% additional revenue market share in the 2008 financial year compared with
the 2005 financial year, which the Group is measuring in Germany, Italy, Spain and the
UK against its principal competitors.
The Group has updated its One Vodafone targets to reflect both the new organisational
structure and additional cost saving initiatives.
Capitalised fixed asset additions are expected to be 10% of revenues in the 2008
financial year for the total of the Group’s Europe region and its common functions.
The Group now expects the aggregate of payroll and other operating expenses to be
broadly stable in the 2008 financial year when compared to the 2006 financial year for
the total of the Group’s Europe region and its common functions, assuming no
significant changes in exchange rates, after adjusting for acquisitions and disposals, and
excluding the potential impact from its New Businesses unit and any one off business
restructuring costs.
The objective for the 2006 financial year has been to commence implementation of the
plans outlined last year. Significant benefits are expected in the 2007 financial year, with
the full targets expected to be met in the 2008 financial year.
The One Vodafone programme has focused on six key initiatives, as follows:
•The network and supply chain management initiative has driven prices down over the
last two years in the radio network area through competitive bidding via e-auctions
and standardising specifications for base stations, accessories and operating costs. In
core networks, the Group is advancing towards an all IP based network, thereby
simplifying and reducing the number of component parts and leading to lower costs.
Through increasing the amount of self built transmission, both through microwave
links and owned dark fibre, costs are being reduced and future cost escalation will be
limited as the volume of data traffic grows.
•The service platforms initiative has created a shared service organisation to host the
European development and operations of services. The shared service organisation is
now providing a hosting service for the Vodafone live! portal for seven of the Group’s
mobile operating subsidiaries, the Group’s joint venture in Italy and two Partner
Markets. Other platforms are also being migrated and new services are being
implemented, for the first time, solely on the shared service platform. The
centralisation is designed not only to reduce costs but also to increase revenue
through reduced time to market for new products and services.
•The IT initiative focuses on the two areas of data centres and application
development. For data centres, which host the servers to support billing and
customer relationship management systems, consolidation is underway, with
migrations of all of the Southern European, German and Dutch data centres
completed in the year, and work is progressing on the UK and Ireland data centres
following the completion of the planning phase in the 2006 financial year. The
remaining part of the IT effort is focused on driving efficiencies in application
development and maintenance, which will continue through to 2008 and beyond.
Activities in both these areas are enabling the Group to leverage its global purchasing
power and drive operational excellence.
•The customer management programme is focused on driving segment and value
based service differentiation to improve customer satisfaction, generate revenue and
reduce churn. During the 2006 financial year, achievements included the launch of a
common customer management service strategy, the implementation of a cross
operating company network of specialised roaming customer care teams to improve
service for our roaming customers and the roll out of a number of best practice
activities to a number of operating companies.
•The focus of the terminals programme is to provide an end to end process for
delivering terminals to our customers, driving benefits from scale and reduced time to
market. At present, the procurement of approximately four out of five handsets in the
Group’s mobile operating subsidiaries and joint venture in Italy is negotiated globally,
providing the Group with scale advantages. In addition, complexity in handsets is
being reduced by standardising components and the move to a smaller number of
technology platforms. It is expected that these activities, together with the launch of
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