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<strong>Vodafone</strong> – Additional Information<br />
Regulation continued<br />
Europe<br />
Germany<br />
<strong>Vodafone</strong>’s 900 MHz licence was extended to 2016. In April 2008, <strong>the</strong> NRA<br />
published <strong>the</strong> rules for auctioning fur<strong>the</strong>r 2.0 GHz, 2.6 GHz and 1800 MHz<br />
spectrum, with auctions expected in 2009.<br />
In April 2008, <strong>the</strong> German Supreme Administration Court rejected lawsuits filed<br />
by <strong>the</strong> four mobile network operators against <strong>the</strong> NRA’s decision to regulate<br />
mobile termination rates on an ex ante basis. The German Competition Authority<br />
has commenced an investigation into <strong>the</strong> use by <strong>Vodafone</strong> Germany and T-Mobile<br />
Germany of on-net pricing.<br />
During <strong>the</strong> year, <strong>the</strong> NRA reduced <strong>Vodafone</strong>’s termination rate by 9.8% to 7.92<br />
eurocents, valid until March 2009.<br />
Italy<br />
The NRA launched a public consultation for <strong>the</strong> assignment of 900 MHz, 1800<br />
MHz and 2.1 GHz spectrum and on <strong>the</strong> implementation of 900 MHz refarming.<br />
The Italian Ministry of Communications assigned 5 MHz of 900 MHz spectrum<br />
to Wind on a temporary basis in 16 main cities. The NRA published proposals<br />
to licence DVB-H services.<br />
The Italian National Competition Authority (“NCA”) closed its investigation into<br />
alleged anti-competitive practices by mobile network operators, including<br />
<strong>Vodafone</strong> Italy, in relation to network access for MVNOs and o<strong>the</strong>r matters.<br />
Undertakings in relation to network access were submitted by <strong>Vodafone</strong> Italy<br />
and accepted by <strong>the</strong> NCA, and <strong>the</strong> case has been closed without sanction for<br />
<strong>Vodafone</strong>. A new law was enacted prohibiting fees or o<strong>the</strong>r charges in addition<br />
to airtime for prepaid services and introducing measures to enable consumers<br />
to terminate contracts without penalty. The Italian NRA published guidelines<br />
requiring operators to reimburse or transfer any remaining prepaid airtime of<br />
customers switching networks.<br />
The Italian NRA and Government commenced discussions with Telecom Italia<br />
about proposed voluntary separation of <strong>the</strong> Telecom Italia fixed network.<br />
<strong>Vodafone</strong> currently purchases certain services from Telecom Italia in order to<br />
provide fixed broadband services in <strong>the</strong> Italian market and it is possible that both<br />
existing and future arrangements between <strong>Vodafone</strong> and Telecom Italia would<br />
be affected if such proposals were to be implemented.<br />
During <strong>the</strong> year, <strong>the</strong> NRA reduced <strong>Vodafone</strong>’s termination rate by 11.0% to 9.97<br />
eurocents, with <strong>the</strong> NRA foreseeing fur<strong>the</strong>r reductions to 8.85 eurocents in<br />
July 2008, 7.70 eurocents in July 2009, 6.60 eurocents in July 2010 and 5.90<br />
eurocents in July 2011.<br />
Spain<br />
The NRA commenced a review of <strong>the</strong> wholesale market for SMS termination.<br />
The Spanish Competition Authority commenced an investigation against <strong>the</strong><br />
three largest mobile operators in Spain, including <strong>Vodafone</strong>, alleging that <strong>the</strong><br />
firms colluded when setting call set-up charges. A new law was passed requiring<br />
telecommunications operators to retain certain data for a 12 month period and<br />
requiring operators to register <strong>the</strong> identity of new prepay customers and to<br />
register <strong>the</strong> identity of existing prepay customers within a two year period. The<br />
NRA commenced a review to determine <strong>the</strong> operators obliged to contribute to<br />
<strong>the</strong> national universal service fund and <strong>the</strong> criteria for distribution of <strong>the</strong> fund.<br />
During <strong>the</strong> year, <strong>the</strong> NRA reduced <strong>Vodafone</strong>’s termination rate by 15.3% to 9.61<br />
eurocents. In April 2008, <strong>the</strong> NRA reduced <strong>the</strong> rate to 8.74 eurocents, with<br />
reductions to 7.87 eurocents in October 2008 and 7.00 eurocents in April 2009.<br />
United Kingdom<br />
An auction of 2.6 GHz spectrum is expected to commence in September 2008<br />
and <strong>the</strong> NRA also proposes to auction 112 MHz of digital dividend spectrum<br />
in <strong>the</strong> 550-860 MHz range during 2009. The NRA published proposals to allow<br />
refarming of 900 MHz spectrum, but proposed that <strong>Vodafone</strong>, and O2, first release<br />
2 x 7.5 MHz each for reallocation to o<strong>the</strong>r parties. Following consultation, <strong>the</strong> NRA<br />
has decided to reconsider <strong>the</strong>se proposals.<br />
148 <strong>Vodafone</strong> Group Plc Annual Report 2008<br />
The appeal by certain stakeholders against <strong>the</strong> NRA’s decision on setting call<br />
termination rates until 2011 is being considered by <strong>the</strong> UK Competition Commission<br />
and Competition Appeal Tribunal. <strong>Vodafone</strong> UK filed an appeal against <strong>the</strong><br />
proposals of <strong>the</strong> NRA to reform <strong>the</strong> number portability processes and reduce<br />
porting times to two hours.<br />
The NRA announced that it will withdraw certain regulatory obligations from BT<br />
in relation to <strong>the</strong> provision of wholesale broadband services in certain parts of <strong>the</strong><br />
UK market where it considers that BT no longer has SMP, a result of competition<br />
from o<strong>the</strong>r fixed unbundlers and cable operators. <strong>Vodafone</strong> purchases certain<br />
fixed wholesale services from BT.<br />
<strong>Vodafone</strong>’s average termination rate for <strong>the</strong> 2008 financial year was 5.70 pence.<br />
Rates declined by 3.2% below <strong>the</strong> retail price index in April 2008 and will decline<br />
by 2.5% below <strong>the</strong> retail price index in <strong>the</strong> April 2009 and April 2010.<br />
O<strong>the</strong>r Europe<br />
Greece<br />
In January 2007, <strong>Vodafone</strong> Greece was fined €76 million as software foreign to <strong>the</strong><br />
network and capable of intercepting calls had been installed without <strong>Vodafone</strong>’s<br />
knowledge in <strong>the</strong> network software. <strong>Vodafone</strong> Greece has paid <strong>the</strong> fine but is<br />
appealing <strong>the</strong> decision before <strong>the</strong> Council of State and a hearing is set for October<br />
2008. In March 2008, <strong>Vodafone</strong> Greece was fined €19 million by <strong>the</strong> NRA for<br />
violations of telecommunications legislation and provisions of licences in<br />
connection with <strong>the</strong> interception incident. <strong>Vodafone</strong> has appealed <strong>the</strong> decision.<br />
<strong>Vodafone</strong> Greece appealed a finding that <strong>the</strong> three largest mobile network<br />
operators colluded in setting retail SMS prices and won. The NRA <strong>the</strong>n appealed<br />
this decision before <strong>the</strong> Council of State.<br />
During <strong>the</strong> year, <strong>the</strong> termination rate reduced by 15.6% to 9.91 eurocents.<br />
Ireland<br />
<strong>Vodafone</strong> Ireland has obtained a trial licence to deploy UMTS in 900 MHz<br />
spectrum. In March 2007, a 3G licence was awarded to eircom.<br />
The Ne<strong>the</strong>rlands<br />
In March 2007, <strong>Vodafone</strong> Ne<strong>the</strong>rlands’ 900 MHz licence was extended for three<br />
years to 2013. The NRA is expected to consult upon compliance with 3G coverage<br />
obligations in 2008. Auctions of 2.6 GHz spectrum are also expected in 2008.<br />
An appeal by one stakeholder against <strong>the</strong> NRA’s decision setting call termination<br />
rates was heard and a decision is expected in <strong>the</strong> coming months. During <strong>the</strong> year,<br />
<strong>the</strong> termination rate reduced by 9.1% to 10.00 eurocents. The NRA proposes to<br />
reduce termination rates to 9.00 eurocents in July 2008 and to 7.00 eurocents in<br />
July 2009.<br />
Portugal<br />
The NRA decided to implement technology neutrality for 900 MHz spectrum,<br />
paving <strong>the</strong> way for refarming. The NRA proposed to allocate, through a public<br />
tender, 450 MHz spectrum for mobile services.<br />
A new law concerning unfair commercial practices was enacted in April 2008 that<br />
prohibits <strong>the</strong> rounding up of charges and introduced a series of associated tariff<br />
transparency measures.<br />
During <strong>the</strong> year, <strong>the</strong> NRA published a proposal for future termination rates.<br />
This proposal is yet to be finalised and <strong>the</strong> termination rate applied in Portugal<br />
remained unchanged at 11.00 eurocents during <strong>the</strong> year.<br />
France<br />
The NRA issued a call for tenders for a fourth 3G licence by July 2007. No licence<br />
has been awarded to date. The NRA authorised refarming of <strong>the</strong> 900 MHz and<br />
1800 MHz bands.<br />
The French Competition Council has issued a Statement of Objection to SFR<br />
concerning on-net pricing in certain tariffs.