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MOBILE TELECOMMUNICATIONS RESULTS
Turnover
Turnover in the mobile telecommunications businesses increased by 4%, or 6% on an organic basis at constant
exchange rates. The increase in turnover was driven principally by organic service revenue growth, at constant
exchange rates, of 5%, which improved principally as a result of growth of 8% in the Group’s average controlled
customer base compared to the prior period.
Voice revenue improved by 4% on an organic basis at constant exchange rates, following an increase in total
voice usage in controlled mobile businesses of 9% to 83.7 billion minutes for the six months ended 30 September
2004, offset by competitive pressures resulting in tariff reductions and lower termination rates reducing incoming
revenue.
Non-voice revenue increased to £2,389 million for the six months ended 30 September 2004, or 12% on an
organic basis at constant exchange rates. Messaging revenue continued to represent the largest component of
non-voice revenue. Data revenue as a percentage of non-voice revenue increased to 26.7% compared to 25.6%
for the prior period as the Group continued to drive adoption of new consumer services, such as Vodafone live!,
and business offerings, including Vodafone Mobile Connect datacard and BlackBerry from Vodafone.
Other revenue increased to £1,817 million, or 12% on an organic basis at constant exchange rates. The increase
has arisen from higher levels of gross additions and upgrades in the period and revenue from non-Vodafone
customers acquired as a result of the acquisition of UK service providers in the prior year. Other revenue related
to acquisition and retention activities increased to £1,534 million, or 10% on an organic basis at constant
exchange rates.
Group operating profit before goodwill amortisation and exceptional items
Acquisition and retention costs, net of attributable revenue, increased by 18% to £1,866 million. The increase was
primarily driven by higher customer growth in the UK and Spain and increased investment in retention activities in
the UK and Japan. Other operating expenses as a percentage of service revenue reduced from 16.6% to 16.1%
as the Group continued to realise cost efficiencies, particularly in network and IT costs.
Depreciation and licence amortisation charges increased by 16% following the commencement of 3G services in
a number of the Group’s controlled mobile businesses. Licence amortisation amounted to £204 million in the
period compared to £22 million in the prior period.
The Group’s share of operating profit, before goodwill amortisation and exceptional items, in associated
undertakings grew strongly, primarily due to growth at Verizon Wireless in the US.
Total Group operating profit, before goodwill amortisation and exceptional items, for the mobile businesses
decreased by less than 1% to £5,670 million, with organic growth of 4%, as unfavourable exchange rate
movements, particularly the strengthening of Sterling against the Euro and the US Dollar, reduced this growth by
5%. The acquisition of service providers in the UK in the prior year increased growth by 1%.
PROPORTIONATE RESULTS
Group proportionate turnover increased by 8% to £21,179 million as a result of both organic growth and the effect
of increased stakes in a number of the Group’s existing businesses, partially offset by the disposal of Japan
Telecom. In the mobile businesses, proportionate turnover grew by 11% to £20,711 million, representing organic
growth of 10%.
The Group’s proportionate EBITDA margin, before exceptional items, for the mobile businesses decreased from
40.5% for the six months ended 30 September 2003 to 39.7% in the current period. The main reasons for this
decrease were the strengthening of Sterling, which has had a greater impact on the Group’s higher margin
operations, the buy-out of the minority interests in Vodafone Japan in the current period and the increase in
acquisition and retention costs referred to above.
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