Key market review

Revenue trends continue to improve

• Group organic service revenue growth improved during the year, with a strong result from emerging markets and encouraging signs of renewed growth in some parts of Europe.
• In Europe service revenue was down 0.4%^(*) during the year; however, this was significantly better than last year’s decline of 3.8%^(*). We are seeing positive revenue trends in the more stable economies of northern Europe such as Germany, the UK and the Netherlands, while our remaining mature markets in Europe, particularly those impacted by government austerity measures, have seen declining revenue growth. Turkey has seen significant revenue growth this year, driven by improvements both in voice and data revenue.

• Service revenue growth in our Africa, Middle East and Asia Pacific region was 9.5^(*). Our two major businesses within this region, India and Vodacom, reported continued strong growth reflecting the benefits of rising mobile penetration in India and a more stable pricing environment; and strong take-up of data services in South Africa.
• See "Operating results" for further details of performance within each of our markets during the year.

Mobile service revenue market share (%)⁽¹⁾

Key market performance at a glance
Key achievements	Organic service revenue growth
Germany Service revenue growth (%)(*) 0.8 EBITDA margin (%) 37.4 Operating free cash flow (£m) 2,297 Excluding the impact of regulated termination rate cuts, service revenue growth was 2.1%(*). Strong growth in enterprise segment due to significant customer wins. Our first market to launch 4G/LTE. Italy Service revenue growth (%)(*) (2.1) EBITDA margin (%) 46.2 Operating free cash flow (£m) 2,067 Increased market share in a challenging economic and competitive environment. A 21.5 %(*) increase in data revenue due to increased smartphone penetration. Now with 1.7 million fixed broadband customers (on a 100% basis), up 29%. Spain Service revenue growth (%)(*) (6.9) EBITDA margin (%) 30.4 Operating free cash flow (£m) 885 Extremely challenging economic environment and increasing competitive pressure. New integrated voice and data plans to support smartphone adoption. New management in place since April 2011. United Kingdom Service revenue growth (%)(*) 4.7 EBITDA margin (%) 23.4 Operating free cash flow (£m) 950 Significant year-on-year improvement in revenue trends. Data revenue increased 28.5%(*) due to increasing penetration of smartphones. Strong contract customer growth due to increased commercial focus. India Service revenue growth (%)(*) 16.2 EBITDA margin (%) 25.6 Operating free cash flow (£m) 433 Revenue growth improved through the year as the customer base increased and price declines slowed. Fourth successive year of gaining revenue market share. Commenced 3G services in February 2011 with 1.5 million customers by 31 March. Vodacom Service revenue growth (%)(*) 5.8 EBITDA margin (%) 33.7 Operating free cash flow (£m) 1,339 Strong revenue growth led by increasing demand for mobile broadband services. Launched WebBox service for internet access. Continued network investment with over 3,200 base stations now 4G/LTE ready.

1. Notes:
2. At 31 March (2011 estimated).
3. Q3 2010 and Q3 2011 data; mobile total revenue share.
4. Market share information relates to South Africa which is Vodacom’s largest business.
5. This figure reflects pro-forma growth which is organic growth adjusted to include acquired business for the whole of both periods