Vodafone Group Plc Annual Report 2017

Vodafone Group Plc
Annual Report 2017

Connecting everybody to
live a better today and build a better tomorrow.

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Creating value for society, delivering results for shareholders

Vodafone’s purpose is to connect everybody to live a better today and build a better tomorrow. We believe that by pursuing this goal in a sustainable and responsible way we will create long-term value for society and, as a result, for our shareholders.

Creating value for shareholders...

All amounts marked with an “*” represent organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. Organic growth is an alternative performance measure. See “Alternative performance measures” on page 205 of the Annual Report 2017 for further details and reconciliations to the respective closest equivalent GAAP measure.

...and benefits for customers and society


At Vodafone our purpose is to connect everybody to live a better today and build a better tomorrow.

We do this by investing in the digital infrastructure of the future, delivering a quality service that allows individuals and businesses to connect confidently anywhere and at any time. Our services enhance the quality of peoples’ lives, providing benefits to society as well as financial rewards for our shareholders. We’ve created four core programmes to make sure this happens.


Building a converged communications leader.

Vodafone’s transformation into a leading converged operator in our developed markets made further progress this year, while rising smartphone penetration and data services adoption drove growth in our emerging markets. Supported by our strategic differentiators –network leadership, customer experience excellence, and outstanding people – and with improved cost efficiency, I am pleased to report that the Group’s commercial and financial performance has further improved, although on a reported basis this was masked by currency headwinds.



Providing the best mobile data experience

We aim to provide a leading mobile data experience in all of our markets, in order to capitalise on the huge demand for mobile internet connectivity from both consumer and enterprise customers, and to differentiate our service from lower quality discount providers.

Group data traffic growth in 2017

Year Million
Europe 57
Group 65
Figures exclude India and the Netherlands.

of our customers use data (including India, JVs and associates), 43% of the total base

‘More-for-more’ initiatives to drive usage and revenue

Over the course of last year we introduced a series of more-for-more offers, which typically offer more data in return for a higher monthly fee. As an example, in Germany, we recently launched new plans offering more data and a data rollover facility, providing customers with the ability to carry over their unused data allowance from the prior month. In Vodacom, our innovative “microbundling” strategy allows customers to purchase data in affordable hourly, daily or weekly bundles. These offers typically mean customers generate a lower revenue per unit of data, but stabilise or increase average revenue per user.


Combining fixed and mobile

Customers increasingly want to use converged services – i.e. bundle fixed and mobile services together under a single contract – to easily share content between their mobile phone, tablet, laptop or TV. We aim to increase our revenue market share and profitability in fixed communications.

Spain - lowering churn through convergence

% of customers that leave us based on the number of products(mobile, landline, broadband and TV) they buy
Year Million
Mobile only 27
Three products 13
Four products 6

of our service revenue comes from fixed services

Vodafone Spain – leading our transition to converged services

To date, the fastest take up of converged services – bundles of fixed, mobile or TV – has been in Spain. During the year, we added nearly 250,000 new converged customers taking us to 2.3m in total. We have made two important steps to drive demand during the year. First, we added to the existing extensive range of TV content including football, Netflix, and over 120 TV channels, including launching HBO Spain. Second, we further expanded the number of homes passed with high-speed fibre to nearly 19 million,representing 65% of households, by both deploying more fibre and by securing new wholesale arrangements.


Leading in total communications

Seamlessly integrated connectivity has become a central part of running a business today. Businesses are seeking secure and reliable mobile and fixed solutions to support efficient and effective operations. We are building a comprehensive total communications portfolio, rooted in our core strength in mobility and want to maintain our strong mobile market share, earned from our trusted brand and increase market shared in our fixed enterprise services.

Enterprise service revenue growth

Year Million
2015 0.0¹
2016 1.7
2017 2.3
1 as reported in FY15 including Vodafone India.

of our service revenue is from enterprise customers

Providing network connected, global cloud services

Enterprise customers are moving data and applications to the cloud to become smarter and more agile, reduce costs and optimise performance. By combining our strengths in fixed connectivity with our Cloud & Hosting portfolio, we are well placed to meet this demand and can provide simple, secure IT solutions. During the year, we have expanded our geographic presence and our cloud services are now live in seven markets across Europe, Africa, Asia and the USA. Combined with our network of partner facilities, we can serve businesses on a global scale and offer a consistent cloud experience across 28 countries. During the year, revenue from Cloud & Hosting services grew 15%.

Everything we do is supported by our responsible approach to the communities in which we operate.

Our businesses play an integral role in the daily lives of our customers and are a vital part of the national infrastructure upon which the economies in which we operate depend on. We take this responsibility very seriously as reflected in our sustainable business strategy, robust risk management and strong governance.

Key performance indicators

Ensuring we stay on track

  • Note:
  • 1 Includes Netherlands.
  • 2 Includes India.
Vodafone Annual Report 2017

This year's report