Vodafone Group Plc Annual Report for the year ended 31 March 2012

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Vodafone Group Plc Annual Report 2012 26 Strategy (continued) Focusing on growth in: Emerging markets Emerging markets such as India and Africa represent a significant opportunity for growth. Last year the Indian mobile market added 140 million customers – over two times the size of the UK population. Emerging markets represent around 29% of our service revenue and the share is likely to grow over the medium to longer term driven by continued strong economic growth and the increase in mobile penetration towards mature market levels. Market context: Almost all of the 1.5 billion new mobile phone users over the next four years are expected to come from emerging markets. 1 Goals: We are steadily increasing our exposure to emerging markets given the stronger growth prospects that they offer relative to developed markets. Strengths: We operate mobile networks in a number of emerging markets including India, Vodacom, Egypt, Turkey, Ghana, Qatar and Fiji – in which we hold either a number one or two revenue market share position. Actions: Our high quality networks combined with low cost devices and innovative services such as mobile payments and mobile health solutions help to support economic development in underdeveloped communities (see below and “Sustainable business” on page 36 for more information). Progress: Emerging markets represent our fastest growing geographies, delivering service revenue growth of 13.2% * , compared to a fall of 1.1% * , for our Europe region. The attraction of emerging markets Over 70% of the world’s six billion mobile phone users are in emerging markets, where incomes are generally lower than mature markets such as Europe. Emerging markets tend to have stronger growth prospects than mature markets, as a smaller share of the population in these countries have mobile phones and the pace of economic and population growth tends to be higher. During the year mobile service revenue growth in our emerging markets increased by 13.2% * , including 19.5% * in India and 25.1% * in Turkey. This was driven by continued strong economic growth and rising mobile penetration. In contrast revenue growth in Europe declined 1.1% * . Emerging market service revenue growth* 2010 2011 2012 +7.9 % +11.8 +13.2 The data opportunity in emerging markets Mobile data is increasingly popular in emerging markets given the lack of alternative fixed line infrastructure. For many people in emerging markets their first internet experience has been on a mobile device and we expect this to be the case going forward. The demand for data is expected to grow strongly as only around 29% of our customers in these markets currently use data services, compared to about 42% in Europe. At 31 March 2012 over half of our mobile data users were from emerging markets. Our money transfer service, M-Pesa, supports economic development in emerging markets Mobile services are a key driver of economic development in emerging markets. According to a World Bank study, a 10% increase in mobile penetration can add 1.2% to annual economic growth in an emerging economy. Our Vodafone money transfer service, M-Pesa, is also contributing to economic growth in countries that lack banking services. It enables millions of people who have a mobile phone, but with limited or no access to a bank account, to send and receive money, top-up airtime and make bill payments. We now have just over 14 million active M-Pesa customers, who transfer up to £600 million per month. The service is established in Kenya, Tanzania, South Africa, Afghanistan, Qatar and Fiji. During the financial year, we launched M-Pesa on a trial basis in Rajasthan, India, in preparation for a full launch later this year across the country. 29% of our service revenue is from emerging markets. £600m transferred person to person over our M-Pesa platform per month. Note: 1 Sourced from IDC.
Vodafone Group Plc Annual Report 2012 27 Business review Our contribution to mHealth solutions Mobile technologies offer significant opportunities to improve the accessibility and effectiveness of health services. In Tanzania our SMS for Life project uses SMS to track and manage the supply of malaria drugs so patients do not have to go without. During a six month pilot, the number of clinics without supplies reduced from 26% to almost zero. The SMS for Life project has since expanded to cover all 5,000 health facilities across Tanzania. Managing scale in India India is our largest market measured by customers with over 150 million phone users. We added 16 million customers last year, which is equivalent to two times the population of London. Every month we handle 43 million calls to our call centres and have the capability to deal with a diverse customer base given the 22 languages and 100 dialects in the country. With our broad distribution reach, customers can top up at over 1.4 million recharge outlets. Performance Governance Financials Additional information
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Vodafone Group Plc Annual Report for the year ended 31 March 2012

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