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PERFORMANCE

Vodafone calmed investor fears over industry prospects in Europe, following a string of weak financials from competitors — by meeting profit and cash flow forecasts with its FY10-11 results. Group revenue returned to growth, at 2.8%, and, for the first time, the increase in Vodafone’s data services’ contribution outweighed its voice revenue loss. Vodafone and rivals’ cocktail of regulatory, economic, and competitive difficulties in Europe remains a key worry, however — just three of Vodafone’s Europe Region OpCos posted service revenue growth in Q4. [pp.4-16, 40, 41, 46, 47, 53, 54, 56, 57, 58, 59, 69-73, 75-77.]

Another key area where Vodafone sought to provide reassurance was over operators’ ability to capture value from data services’ growth — with fears rising over loss of control and revenue to ‘over-the-top’ content and service providers. Subsequently, these concerns rose further, after the Netherlands’ parliament approved ‘net neutrality legislation ahead of a review of the issue by the European Commission. [pp.49, 50.]

STRATEGY

New signs emerged that Vodafone’s resuscitated and more collaborative relationship with US partner Verizon Communications (VZ) is finally breaking ground — with the companies having now set up one joint multinational account team, three-and-a-half years after first announcing their intention to buddy up on enterprise sales. The Verizon brand also began making impromptu appearances on Vodafone-sponsored McLaren-Mercedes Formula 1 cars, and VZ executives hinted that Vodafone is to market some of VZ’s corporate products and services, including cloud computing solutions. The tie-up is beginning to look like it might develop into a super-charged Partner Markets agreement between Vodafone and VZ, with significant benefits potentially accruing to both companies, but with the prospect of another downturn in their on-off relationship always looming in the background. [pp.33-35.]

Results continue to emerge of Vodafone’s recalibrated approach to fixed-line operations — with emphasis on wireline applications that enhance its core mobile offerings, including mobile backhaul and converged services, rather than pure-play propositions. Vodafone UK was named as one potential partner for Fujitsu in the Japanese company’s recently announced plans to deploy fibre access to up to five million homes in rural areas of the country; while Vodafone Hutchison Australia secured clearance to begin trials of the Australian government’s National Broadband Network, to “complement our existing mobile network”. The moves came with most of Vodafone’s larger existing fixed-line businesses remaining in need of renewal — Vodafone Italy was the only ‘core’ Europe Region OpCo to record growth in fixed-line revenue during Q4 FY10-11. [pp.63-65.]

PEOPLE

Vodacom Group looked outside the telecoms industry to replace former Vodacom South Africa Managing Director Shameel Joosub — who moved to Vodafone Spain earlier in 2011. The Group hired Sipho Maseko from oil group BP to fill the post, citing his “business acumen, leadership approach, and track record in a multi-national environment”. [pp.25.]

Vodafone published its FY10-11 Annual Report, incorporating Sir John Bond’s valedictory Chairman’s Statement — ahead of his departure in July 2011. Notable takeaways included a vigorous defence of the Group’s strategy towards international assets during his Chairmanship, as well as signals that his departure could come ahead of a wider refresh of the Vodafone board, as non-executive directorships come up for ‘expiry’, and the Group seeks to bring greater diversity to its leadership. Click here to read this report. [pp.22, 23.]

PORTFOLIO

There continues to be mixed news for Group efforts to spread adoption of its Vodafone Money Transfer remittance system to OpCos — with Vodacom South Africa declaring (or perhaps even deliberately highlighting, in a thinly veiled ‘told you so’ message) that the response to its recent launch has not met expectations. Elsewhere, however, Vodafone Essar confirmed it is now finally trialling the offering in India. [pp..71, 19, 75-77.]

Elsewhere, the Group’s activity around M2M communications — another area of collaboration with VZ — continued to grow — as car manufacturer Ford highlighted a joint development project with Vodafone on Long Term Evolution-based Cellular Hazard Warning systems. Vodafone Qatar separately highlighted its entrance into M2M, noting local demand for solutions in fleet management and other areas. [pp.27, 73.]

NETWORK

The number of network-sharing relationships between Vodafone rivals further expanded, representing a competitive threat to Group operations — as well as posing some questions over Vodafone’s own approach to these tie-ups. Vodafone Ireland rivals Telefónica Ireland and eircom Group signed an infrastructure-sharing agreement that appears to usurp plans to extend Vodafone’s own European passive network collaboration with Telefónica, established in 2009, to Ireland. Meanwhile, in India, Vodafone Essar was notably absent from a 3G network collaboration between Bharti Airtel and Idea Cellular, despite the three companies’ existing ties on passive infrastructure joint venture Indus Towers. [pp.31, 45.]

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