Notes to the Consolidated Financial Statements
Notes 31-37
- 31. Commitments
- 32. Contingent liabilities
- 33. Directors and key management compensation
- 34. Related party transactions
- 35. Employees
- 36. Subsequent events
- 37. New accounting standards
31. Commitments
Operating lease commitments
The Group has entered into commercial leases on certain properties, network infrastructure, motor vehicles and items of equipment. The leases have various terms, escalation clauses, purchase options and renewal rights, none of which are individually significant to the Group.
Future minimum lease payments under non-cancellable operating leases comprise:
| 2008 £m |
2007 £m |
|
|---|---|---|
| Within one year | 837 | 718 |
| In more than one year but less than two years | 606 | 577 |
| In more than two years but less than three years | 475 | 432 |
| In more than three years but less than four years | 415 | 367 |
| In more than four years but less than five years | 356 | 321 |
| In more than five years | 1,752 | 1,360 |
| 4,441 | 3,775 |
The total of future minimum sublease payments expected to be received under non-cancellable subleases is £154 million (2007: £107 million).
Capital and other financial commitments
| Company and subsidiaries | Share of joint ventures | Group | ||||||
|---|---|---|---|---|---|---|---|---|
| 2008 £m |
2007 £m |
2008 £m |
2007 £m |
2008 £m |
2007 £m |
|||
| Contracts placed for future capital expenditure not provided in the financial statements(1) | 1,477 | 1,060 | 143 | 89 | 1,620 | 1,149 | ||
| Note: | |
|---|---|
| (1) | Commitment includes contracts placed for property, plant and equipment and intangible assets. |
In December 2007, a consortium comprising Vodafone and the Qatar Foundation for Education, Science and Community Development (the "Qatar Foundation") was named as the successful applicant in the auction to become the second mobile operator in Qatar. Subject to regulatory approvals, the licence is expected to be awarded by 30 June 2008. The licence will be owned by Vodafone Qatar, of which 45% is expected to be owned by the joint venture formed between Vodafone (owning 51%) and the Qatar Foundation (owning 49%), 15% to be owned by Qatari government institutions and the remaining 40% to be made available to Qatari citizens through a public offering expected to be completed in the 2008 calendar year. Following the public offering, the Group expects its effective equity interest in Vodafone Qatar to be 22.95%. The Group also currently expects that Vodafone Qatar will be accounted for as a subsidiary, as Vodafone expects to control management decisions.
By 30 June 2008, Vodafone Qatar expects to pay QAR 4,630 million (£626 million), representing 60% of the cost of the mobile licence, with the balance of the licence cost to be paid following completion of the public offering. The Group could be required to fund up to a maximum of QAR 1,551 million (£210 million) of the total licence cost, with the precise amount dependent on the success of the public offering. The remainder of the licence cost will be funded by the other shareholders in Vodafone Qatar. Services are expected to be launched under the Vodafone brand by the end of the 2009 financial year.