Vodafone 2008 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2008 Vodafone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

1
2
3
4
5
Operating environment
The industry landscape continues to evolve
Vodafone is seeing significant change in its operating
environment. Traditional market boundaries are shifting as
customers benefit from a growing choice in communications
services, devices and providers that span mobile, broadband and
the internet. This change is being driven by evolving customer
needs, the emergence of new technologies, intensifying price
competition from both new and established competitors and
regulatory pressures.
Customers
Customers’ needs are changing, including the desire for faster
access to services, simple and value driven tariffs and easy to use
devices. Customers increasingly want mobile data services, such
as email and internet access, so that they can use the internet on
their mobile devices in much the same way as they use it on their
PC. In order to meet customers’ evolving needs, the Group is
building upon its traditional services of voice and messaging to
include newer offerings such as mobile and fixed broadband.
Technology
Technology within the mobile industry is evolving rapidly.
Vodafone has been upgrading its networks to enable the
provision of high speed mobile internet and broadband in
addition to core voice and messaging services. Ongoing network
enhancements are expected to provide even faster access and
a better user experience. In addition, the range and capability
of mobile devices continues to evolve in terms of speed, data
capacity and multi-function capability. Against this background,
the Group continues to carefully assess, select and deploy the
appropriate technology and devices in order to improve both
operational efficiency and customer service.
Vodafone is seeing significant change in its operating environment.
Traditional market boundaries are shifting as customers benefit from
a growing choice in communications services.
Operating Environment and Strategy
Vodafone’s strategy addresses the changing environment
“Our strategy, as
set out in May
2006, continues
to address the
changing operating
environment”
Arun Sarin
Chief Executive
Competition
The communications market is very competitive, with a number
of providers in most countries. The Group’s principal competitors
are existing mobile network operators (“MNOs”) in each of its
geographic markets. In addition, the Group competes with
mobile virtual network operators (“MVNOs”) that lease network
capacity from MNOs and fixed line operators offering combined
fixed and mobile services. New competitors are also beginning
to enter the communications market, including internet based
companies, handset manufacturers and software providers.
These companies are being encouraged by the relative
attractiveness of the industry and the opportunity to extend
their services to mobile.
Vodafone’s core European market has high mobile penetration
of over 100% due to some customers owning more than one
subscriber identity module (“SIM”), which limits customer
growth. The combination of high penetration and competitive
intensity is expected to continue to place significant downward
pressure on prices.
Regulation
Regulatory activities by both national and EU authorities
continue to have a significant impact on the telecommunications
sector. Around 20% of the Group’s revenue is directly subject to
regulation – mainly related to termination rates and international
voice roaming. The competitive environment is also impacted
by regulation in a number of areas, including the allocation of
radio spectrum, the provision of network access to third parties
and network sharing. Regulation is anticipated to continue to
have a major influence on both the Group and the
telecommunications industry.
Strategic objectivesThe external environment
Revenue stimulation and cost reduction in Europe
Innovate and deliver on our customers’
total communications needs
Deliver strong growth in emerging markets
Actively manage our portfolio to maximise returns
Align capital structure and shareholder returns
policy to strategy
Ongoing regulatory and competitive pressures
in Europe
Growing choice of communication services
and providers
Growing demand for mobile data and broadband
Growth potential in emerging markets
Appropriate return to shareholders
10 Vodafone Group Plc Annual Report 2008
Vodafone – Executive Summary