Annual Report for the year ended 31 March 2010

Handsets

Voice revenue

£28.0bn

(2009: 26.9bn; 2008: 24.2bn)

Vodafone branded handsets shipped

5.4m

(2009: 10.7m; 2008: 10.0m)

Product focus: Vodafone branded handsets

Vodafone 845 (left) Android smartphone Vodafone 150 (right) ultra low-cost handset.

Apple iPhone 3GS

Voice usage (billions of messages)

SMS usage (billions of messages)

Messaging revenue

£4.8bn

(2009: £4.5bn; 2008: £4.0bn)

Our wide range of handsets covers all our customer segments and price points and is available in a variety of designs.

• 66 new models released in the 2010 financial year.
• 23 exclusive handsets launched.

Smartphones

• A handset offering advanced capabilities including access to email and the internet.
• 24% of handset sales in Europe.
• All leading brands represented including iPhone in 14 countries.
• Launched two tailor-made Vodafone 360 handsets: Samsung H1 and Samsung M1.

Vodafone branded handsets

• Enabling millions of people in emerging markets to share the benefits of mobile technology.
• Prices start from less than US$15.
• 16 new models released under our own brand.
• Low cost combined with high-end features, such as touch screen and mobile internet capability.

Voice & messaging services

We provide value focused pricing through unlimited bundles of voice and text services.

• Voice services incorporate revenue for national, international and roaming calls.
• SMS services include text messages as well as multiple media, such as pictures, music, sound, video and text.

The core functionality and use of handsets continues to be voice and text messaging services. Many different tariffs and propositions are available, targeted at different customer segments, and include a range of unlimited usage offers which have been particularly appealing to customers.

With sophisticated handsets becoming readily available, customers are increasingly using their mobile phones to complement their lives in new and innovative ways. Data usage continues to grow rapidly fuelled by large numbers of intuitive internet enabled devices (‘smartphones’), many with touch screens such as the iPhone and BlackBerry^® Storm™, and transparent pricing available through our “internet on your mobile” unlimited browsing tariff. Instant messaging is available with Yahoo! and MSN and we offer integrated services from leading internet brand partners including YouTube, eBay, Google™ and Google Maps™.

Our partnership agreements with leading companies, such as RIM, Samsung and Google, have enabled us to be first to market with cutting- edge devices such as the BlackBerry Storm, Samsung H1 and Samsung M1 (our two tailor-made handsets that support our Vodafone 360 proposition) and Google Nexus One.

Available in 31 markets including partner markets, Vodafone branded devices are designed to meet a range of customer needs and preferences – from low cost phones offering simple voice and text, through fashion and design influenced, to competitively priced mobile internet devices with cutting-edge smartphone functionality including touch screen and mobile internet capability. During the 2010 financial year Vodafone launched its most affordable handset to date, the Vodafone 150, which retails for less than US$15 unsubsidised, giving millions of people in emerging markets the opportunity to share in the benefits of mobile technology for the first time.

Organic data revenue growth

19.3%

(2009: 25.9%; 2008: 39.0%)

PC connectivity users

8.7m

(2009: 5.7m; 2008: 2.7m)

Data revenue (£bn)

Data traffic in Europe (petabytes)

Product focus: Vodafone Mobile Broadband USB modem

Latest high-speed Vodafone USB modem, capable of supporting peak download speeds up to 28.8 Mbps.

Fixed line revenue (£bn)

Fixed broadband customers

5.6m

(2009: 4.6m; 2008: 3.6m)

Product focus: Vodafone DSL Router

The Vodafone DSL Router features instant activation and a back-up connection via the separate USB dongle.

We have continued to diversify and expand the services we provide to assist customers in meeting their total communications needs. These include data services, such as mobile internet and mobile broadband and fixed services incorporating fixed line voice and fixed broadband.

Data

Data services

We offer a number of products and services to enhance our customers’ access to data services including access to the internet, email, music, games and television.

Data revenue

• Data, a fast growing revenue stream, now accounts for 10% of service revenue.
• 50m total data users, up over 100%, including 31m mobile internet users.
• Integrated services from leading internet partners including YouTube, Google and Google Maps.

Data devices

• Four netbook models with built-in 3G broadband launched.
• Peak download speeds of up to 28.8 Mbps.
• 13m smartphone users in Europe, representing 11% of customers.
• First to launch a 21 Mbps USB stick in several markets in Europe.

We provide a range of data products including PC connectivity, internet services, applications and roaming.

PC connectivity services, available through Vodafone Mobile Broadband devices and certain handsets, provide mobile internet access for laptop, netbook and PC users. Vodafone Mobile Broadband provides simple and secure access to the internet and to business customers’ systems. We have been at the forefront of deployment of HSPA+ networks and development of devices (such as USB modems) to support these speeds. We were the first to deploy high speed HSPA services (peak rate of 14.4 Mbps) in selected markets, such as the UK, and HSPA+ (peak rate of 21.6 Mbps and 28.8 Mbps) in selected markets such Ireland, Portugal and Greece. USB sticks with exclusive designs and simple “plug and play” software continue to be very popular. A wide variety of laptop models are available with built in 3G broadband and Vodafone SIM cards.

Internet services enable users to access the internet on their mobile handset. Applications include email services with real time handheld access to email, calendar, address book and other applications. Data roaming allows customers to use our services on a mobile network when travelling abroad.

Fixed

Fixed services

We offer fixed voice and fixed broadband solutions to our customers’ total communications needs.

• Fixed line services available in 13 countries in addition to Gateway.
• 5.6m fixed broadband customers, up 1m.
• Vodafone DSL Router launched in six countries.

Our fixed service incorporates fixed broadband, offered mainly through DSL technology, and fixed line voice, which allows consumer and enterprise customers to make fixed line voice calls using Vodafone as their total communications provider.

The Vodafone DSL Router combines mobile and fixed broadband services. This means customers can connect immediately after purchase via the USB broadband modem and then later with fixed broadband when this has been provisioned. At this stage the USB modem can continue to be used with a laptop for usage outside of the home. During the year we have also launched Vodafone Sure Signal in the UK which, used in conjunction with home fixed broadband, provides customers with excellent indoor 3G coverage.