Vodafone 2014 Annual Report Download - page 175

UK
Service revenue declined by 4.0%* driven by the impact of MTR
cuts effective from April 2012, intense price competition and
macroeconomic weakness, which led to lower out-of-bundle
usage. Data revenue grew by 4.2%* driven by higher penetration
of smartphones. Vodafone Red plans, launched in September 2012,
performed well, with over one million customers at 31 March 2013.
Following the purchase of additional spectrum in February 2013,
preparation for LTE roll-out is underway.
The network sharing joint arrangements between Telefónica UK and
Vodafone UK, announced in June 2012, is now operational and
the integration of the CWW enterprise businesses into Vodafone
UK is proceeding successfully.
EBITDA declined by 6.8%*, with a 0.5* percentage point reduction
in EBITDA margin, driven by higher retention activity.
Spain
Service revenue declined by 11.5%* driven by continued
macroeconomic weakness, high unemployment leading to customers
optimising their spend, and a lower customer base following our
decision to remove handset subsidies for a period earlier in the
year. Competition remains intense with the increased popularity
of converged consumer offers in the market. Data revenue grew
by 16.5%* driven by the higher penetration of smartphones and
an increase in those sold with a data bundle. Vodafone Red, which was
launched in Q3, continues to perform well. Fixed revenue declined
by 2.9%*, primarily due to intense competition, although new converged
xed/mobile tariffs had a positive impact on xed broadband customer
additions during Q4.
In March 2013 Vodafone Spain signed an agreement with Orange
to co-invest in a bre network in Spain, with the intention to reach six
million households and workplaces across 50 cities by September 2017.
The combined capital expenditure is expected to reach €1 billion.
EBITDA declined by 9.8%*, with a 0.9* percentage point increase
in EBITDA margin, as lower revenues were offset by commercial
and operating cost efciencies. The EBITDA margin stabilised in H2,
beneting from lower operating and commercial costs.
Other Europe
Service revenue decreased by 5.2%*, driven by declines in the
Netherlands, Greece and Portugal, which more than offset growth
in Albania and Malta. In the Netherlands service revenue declined
by 2.7%* due to more challenging macroeconomic conditions and
lower out-of-bundle usage. Macroeconomic weakness, intense price
competition and an MTR cut resulted in service revenue declines
of 13.4%* and 8.2%* in Greece and Portugal respectively.
EBITDA declined by 3.7%*, with a 0.1* percentage point increase
in EBITDA margin as the impact of service revenue declines was largely
offset by cost efciencies.
Annual Report 2014 173Overview
Strategy
review Performance Governance Financials Additional information