vodafone , vodafone report, project on vodafone, service operation management

Service Operations Management Project
On
VODAFONE
Prepared By:-
Pragya
Prgyaratan1@gmail.com
+91-9716225449
On
VODAFONE
Prepared By:-
Pragya
+91-9716225449
On
VODAFONE
Prepared By:-
Pragya
+91-9716225449

TABLE OF CONTENTS
PART-1
Introduction to the Company & Industry
Research Design & Methodology
Company’s Vision & Mission
PART-2
External analysis
Industry/Competitor analysis
SWOT/TOWS
PART-3
Company analysis on the basis of key performance indicators
Strategic options/alternatives
Strategic & Financial Objectives
Recommended Organizational & Business Strategies
PART-4
Vodafone-Hutchison tax case
What’s really at stake in the Vodafone tax case
The story so far
Vodafone wins $490 million tax dispute in Bombay High Court
PART-5
Financial projections & overall evaluation of strategies
Monitoring & control

PART-6
Vodafone customer base
Impact of Mobile number portability (MNP) on Vodafone
Telecom subscriber base edges past 915 million; Vodafone key gainer
BTS accumulated down time
Board of Directors
Biographies
REFERENCES

PART-1
1.1 Introduction Of Indian Telecom Industry
The Indian telecom sector has seen an exponential expansion in the past few years with tele
density increasing from 10% in year 2004 to 74% in year 2012. India at present has close to 900
million mobile users with 8 million subscriber additions per month. It has been observed that tele
density is lower in rural areas than in urban areas. Areas with low tele density might offer
potential for future growth. There are approx 650,000 telecom towers, 60% of which are in rural
areas. The telecom on rural India is a playing a significant role for visible participation of rural
India in main stream socio-economic growth. The majority of India’s population is in rural areas
almost two-third, however with tele-density of 13%. With saturation of urban markets, rural
India poses a huge opportunity to telecom operators. Setting up a telecom infrastructure in rural
areas has its own challenges. The big challenges for rural telecom network are to maintain
network uptime due to regular power cuts, power problems and equipment maintenance.
Instantaneous solution is running the base station sites with Diesel Generator backup power adds
high cost to the operations. Another long term solutions of these might be using of alternative
power like solar power, wind power. At the same time, telecom companies needs latest
equipments that consume less power.
The growth in mobile networks over the next few years will come from remote parts of the India,
where access to electric grids isn't always guaranteed. The service providers are under
tremendous pressure to deliver the solutions in efficient manner and make availability of
networks. To overcome the electric power grid supply problems, the widely deployed solution is
base stations equipped with diesel-powered generators.
1.2 Introduction to the Company
Vodafone India Limited, formerly Vodafone Essar Limited, is the second largest mobile
network operator in India after Airtel by subscriber base. It is based in Mumbai, Maharashtra. It
has approximately 160 million customers as of December 2013. It offers both prepaid and
postpaid GSM cellular phone coverage throughout India with good presence in the metros.

Vodafone India provides 2.75G services based on 900 MHz and 1800 MHz digital GSM
technology. Vodafone India launched 3Gservices in the country in the January–March quarter of
2011 and plans to spend up to $500 million within two years on its 3G networks. Vodafone
added maximum subscribers in July 2014, with 13.6 lakh new users joining its network to take
its base to 17.12 crore. Vodafone is the second largest player in telecom operator in India after
Airtel, with a market share of 22.95%.
Vodafone India
Type Private
Industry Telecommunications
Predecessors Hutchison Essar Limited
Headquarters
Peninsula Corporate Park, Ganpatrao Kadam
Marg,Lower Parel, Mumbai,Maharashtra, India
Services
Mobile telephony
Wireless broadband
Parent
Vodafone Group
Website
www.vodafone.in
History of Vodafone
Max Touch, Orange and Hutch (1992-2007)
Hutchison Max Telecom Ltd. (HMTL), a joint venture between Hutchison Whampoa and
the Max Group, was established on 21 February 1992.The licence to operate in Mumbai (then

Bombay) circle was awarded to Hutchison Max by the Department of
Telecommunications(DoT) in November 1994. The cellular service branded "Max Touch" was
launched the same year. Switching and other related equipment were provided by Ericsson and
the network was designed, engineered and set up by Motorola. Hutchison Max entered into the
Delhi telecom circle in December 1999, the Kolkata circle in July 2000 and the Gujarat circle in
September 2000. Licences for these circles had initially been awarded by the DoT in 1994, 1997
and 1995 respectively. Between 1992 and 2006, Hutchison acquired interests in all 23 mobile
telecom circles of India.
Vodafone purchases Essar's stake
In July 2011, Vodafone Group agreed terms for the buy-out of its partner Essar from its Indian
mobile phone business. The UK firm paid $5.46 billion to its Indian counterpart to take Essar out
of its 33% stake in the Indian subsidiary. It will leave Vodafone owning 74% of the Indian
business, while the other 26% will be owned by Indian investors, in compliance with Indian
law.On 11 February 2007, Vodafone agreed to acquire the controlling interest of 67% held by Li
Ka Shing Holdings in Hutch-Essar for US$11.1 billion, pipping Reliance Communications,
Hinduja Group, and Essar Group, which is the owner of the remaining 33%. The whole company
was valued at USD 18.8 billion. The transaction closed on 8 May 2007. In April 2014, India
based Piramal Group sold its 11% Stake in Vodafone India to Prime Metals, an indirect
subsidiary of Vodafone Group.

Vodafone India subscriber base statistics as on January, 2013.
1.2 Research Design & Methodology
Research is one systematic activity that is undertaken by scholars, to help in widening our
knowledge base in all fields of education. Research is undertaken in both social sciences as well
as science subjects such as physics and biology. There are many different types of researches
such as descriptive, exploratory, explanatory, and evaluation research.
Exploratory research is challenging as it tackles vaguely defined hypothesis and tries to find
answers to questions. This kind of research is social in nature and requires some preliminary
work in the direction of the research. Exploratory research is treated as the purpose of the
research saying this kind of research proves to be useful when the hypothesis has yet not been
formed or developed. There are certain basic premises that need to be tested at the start of an
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
18000000
Gujrat
UP
Maharashtra
WestBengal
Tamilnadu
Rajasthan
AndhraPradesh
Delhi
Goa
Karnataka
Bihar
Kolkata
Punjab
Haryana
MP
chennai
odisha
Assam
jammu&kashmir
Himachalpradesh
Mumbai
No.Of Subscribers
No.Of Subscribers

exploratory research. With the help of these hypotheses, the researcher hopes to arrive at more
generalizations.
Type of Data collection:
1) Secondary data collection through online sites, research papers, white papers, articles,
journals, previous research on similar topics etc.
1.3 Company’s Vision & Mission
Vision
Vodafone can help to transform societies by bringing innovative products and services to our 404
million customers, 68% of whom live in emerging markets.
Mobile technology is already a vital tool in people’s lives and our ambition is for Vodafone’s
mobile services to further improve people’s livelihoods and quality of life.
At the same time, we aim to help consumers, governments and businesses tackle some of the
significant challenges they face – from food shortages and ageing populations, to lack of access
to communications, healthcare and financial services.
Our business focus on emerging markets, enterprise, data and new services gives us the ability to
achieve our ambition to contribute to global development in this way, while continuing to grow
our business at the same time, by developing commercially viable, scalable services that support
sustainable development.
Mission Statement
We will enhance value for our stakeholders and contribute to society by providing customers
with innovative, affordable and customer friendly communication services.
Through excellence in our services we aspire to be the most respected and successful
telecommunications company in India.
We see our customers, employees, shareholders and the community we operate in as our most
important stakeholders.
 Customers
We enhance value through delivering affordable, reliable and customized communication
services which are simple to use, enjoyable, seamless and secure. Our customers respect us
because:-
• We understand their needs
• We create innovative services

• We consistently deliver on what we promise
• We are transparent and trustworthy in our interactions
• We provide a secure and reliable network
• We offer affordable products and services
We define success as delighted customers who recommend us to others.
 Employees
We enhance value through providing enriching careers and long term growth opportunities in a
fair and collaborative work environment. Our employees respect us because
• We provide a healthy and safe work place
• We encourage mutual respect, trust and appreciation
• We promote diversity and treat them inclusively
• We conduct ourselves with transparency and integrity
• We pursue speed and simplicity in all that we do
• We recognise and admire accomplishments
We define success as happy employees with great careers.
 Shareholders
We enhance value through growing the company’s revenue and profitability while creating
sustainable free cash flow through efficient resource utilisation and effective risk management.
Our shareholders respect us because
• We follow ethical business practices
• We communicate in a fair and transparent way
• We enhance company’s reputation and brand value
• We do everything to protect our shareholders interest
We define success as creating sustainable value by delivering great shareholder return.

 Our Community(Business partners, Authorities, Influencers and Local Communities)
We contribute to the society by supporting authorities in mobilizing social change and achieving
their economic goals, creating value for our business partners and contributing to the social &
economic development of local Communities. Our community respects us because
• We act responsible towards our environment
• We create community connect
• We stimulate business and economic growth
• We have high standards of corporate governance
• We conduct our business with transparency integrity and fairness
We define success as being the most respected telecom company in India

PART-2
2.1The external environmental analysis
The external environments significantly have an impact on the company‟s strategic management
model. According to Pearce and Robinson (2009), the external environment “can be divided into
three interrelated subcategories: factors in the remote environment, factors in the industry
environment, and factors in the operating environment”. These factors Vodafone Group is facing
are discussed in this part.
Remote environment
 Economic Factors
Most companies have recently been confronted with slower growth than ever in the volatile and
rapidly changing global markets. Vodafone Group is not the exception and it hasn‟t been
sustainably growing in some markets. International Monetary Fund (2010) reported that
European market growth is projected only at 1.0% and 1.3% in 2010 and 2011 respectively but
Vodafone Group has heavily relied on slower growth and saturated European market due to
extremely higher mobile subscriber penetration with more than 150% in some countries. Its
revenues from the market captured 67.3% of its total revenues in 2009 but ARPU (average
revenue per user) in UK, Greece, Netherlands, Spain, Italy, Germany, and Portugal where the
company is operating has been slightly decreasing. In contrast, IMF (2010) reported that Indian
market growth is projected at 9.4% and 8.4% in 2010 and 2011 respectively. Vodafone Group
has improved performance in emerging markets in 2009 and executing in emerging markets is
one of the four main objectives. Service revenues in the market grew by 14.7% in 2009, and
Indian mobile market, the second-largest market around the world after China, has been
perceived as its key market.
 Political factors
Political factors are also a major consideration for Vodafone Group on formulating and
implementing its strategies in accordance with each country specific legal, regulatory and tax
environments. The company also has to comply with an extensive range of requirements that
regulate and supervise the licensing and the allocation of frequency spectrum. Vodafone (2010a)
stated “decision by regulators regarding the granting, amendment or renewal of licenses, to us or
to third parties, could adversely affect our future operations” (p. 38). For instance, EU recently
introduced a multi-year spectrum policy program. India made regulations for the implementation
of mobile number portability in 2009.
 Technological Factors
Telecommunication operator‟s ability to adapt the advanced technologies has a great impact on
innovative and differentiated products and services in response to the rapidly changing customer
needs and market environments. Saxtoft (2008) argued that “competitive advantages in the future
convergent communications industry will be based on the organizational ability of
communications service providers to utilize the specific mix of network data, services data and
customer data available to each of the players in the market” (p.71). With its ability to
continuously adapt new ICT, the company has created value-added services like Vodafone 360
and Cloud Computing services.

Industry environment
Most telecommunications operators in developed markets have been confronted with a fierce
competition and declining revenues, and understating of competitive forces is greatly crucial to
thrive and survive. Michael Porter‟s five competitive forces are discussed in this section.
Vodafone Group hasn‟t experienced in the extremely steep declines in revenues while operating
in both developed and emerging markets and thus diversifying risks.
 Threat of Entry
Telecommunications industry is very capital-intensive business with a huge amount of capital to
acquire and maintain its network infrastructure and technologies, and create new products and
services. Although the huge capital requirements traditionally represents a more significant entry
barrier to new entrants than some other industries, recent MVNO (mobile virtual network
operators) business model lowers the barrier and small companies with differentiated products
and services has been identified as new entrants. In addition, while telecommunications operators
have made significant efforts to redefine their value chains to create new value-added services,
Google, Amazon and other online companies have attempted to redefine industry boundaries.
These companies are perceived as new competitors in telecommunications industry.
 Supplier Power
Vodafone Group‟s key suppliers are handset manufacturers like Samsung, Nokia and Motorola,
and network equipment manufacturers like Ericsson, Alcatel-Lucent, and Nokia Siemens
Networks. Those suppliers‟ bargaining powers have weakened due to lack of technical
advantages and new Chinese entrants that extremely pursue cost leadership. In contrast,
Vodafone Group has enhanced its bargaining power to key suppliers while focusing on „One
Vodafone‟ program to integrate business activities to leverage economies of scale and scope.
 Buyer Power
While Vodafone Group has been confronted with a fierce competition globally, its customers
tend to be more price-sensitive in both developed and emerging markets. The company has still
relied on European markets with significantly higher mobile subscriber penetration, and ARPU
in all Vodafone operating countries in the markets have been decreasing. In Indian mobile
market as its key market, ARPU continued to decline despite subscription growth.
 Threat of Substitutes
Vodafone Group has continuously diversified its product and service portfolio including
traditional mobile voice and messaging, data, fixed line solution and other services such as
value-added services to meet its customers‟ total communications needs. Its mobile voice and
messaging services, data, fixed line solutions, and other services accounted for 67%, 11%, 10%,
8% and 4% of total revenues respectively in 2009, and therefore substitutes for its mobile voice
and messaging services have a significant impact on its business. Although mobile voice services
have overtaken traditional fixed voice services, especially in emerging markets, VoIP (Voice
over IP) services are identified as its substitutes in addition to fixed voice services globally.
Myers expected (2010) that VoIP product revenue will climb to $578 million in 2Q2011, a 2.4%
increase over 2Q2010. While there are still concerns on the reliability and quality over IP

networks, more broadband customers become aware of the benefits of VoIP to “enjoy the
flexibility and cost-savings by using their existing broadband connection for voice services
(Myers, 2010, p. 37). Vodafone Group hasn‟t still ultimately embraced VoIP services but growth
of VoIP services has a significant impact on a decrease in its voice ARPU. Vodafone Group has
focused not on cost leadership to directly compete with VoIP services but on diversifying its
product and service portfolio and launching new value-added services. Its data services are
mainly used to connect the Internet and its substitutes are broadband services and fixed Internet
services. Vodafone has embarked on fixed broadband service especially in developed markets to
offer fixed-mobile converged services to differentiate its services from other fixed or mobile
operators. In developing markets, fixed broadband services and Internet services are not
identified as substitutes for mobile Internet services any more since mobile Internet services have
overtaken fixed broadband services. Its fixed broadband services are identified as
complementary services to deliver fixed-mobile converged services. The company has generally
started with mobile services and then added fixed services in all market the company has entered
into. According to Marvrakis and Saddi (2009), “the previously pure mobile operator is now
following a total communications strategy which includes mobile (cellular), broadband (fixed)
and wireless; it has been offering combined services, with fixed, mobile and broadband services
under a single bill”.
 Rivalry
Vodafone Group is operating its business in more than 70 countries and the general competitive
landscape differs in developed and emerging markets. However, the switching cost is low in both
markets and the differentiation strategy is essential for the company to keep its customers from
rivals. European market, the largest markets for Vodafone Group, has been saturated due to
extremely higher mobile subscriber penetration. Value-added services are identified as key
differentiators and the company has launched Vodafone 360, and Cloud computing services in
the market. In contrast, Indian is one of the highest growth mobile markets globally and the
company accounted for approximately 30% of its total number of subscribers globally. While the
mobile subscriber penetration in Indian markets hasn‟t reached 50%, Vodafone Group and other
mobile communications companies are facing extremely fierce price competition due to lack of
differentiated services.
Operating environment
 Competitive Position
The company‟s geographic footprint in more than 70 countries affords its huge economies of
scale and scope and ensures that Vodafone Group has diversified revenue base to cope with
recent economical recession “as its emerging market operations helped cushion the poor
performance in Europe and Turkey”. The Vodafone brand is perceived as one of the most
recognizable global telecommunications brands and the company has capitalized on the brand
recognition to enter into new markets. The company is also a market leader in developing
products and services. It hasn‟t implemented cost leadership but differentiation strategy while
leveraging its strong brand recognition and diversified geographic footprint. However, the
company has faced fiercer competition across most of global markets than ever. Its major multi-
national competitors are France Telecom‟s Orange, Deutsche Telekom‟s T-Mobile, and
Telefonica‟s O2. The company also has to compete with domestic mobile operators like TMN in

Portugal and KPN in Netherlands in European market. Its performance in European market is
worse than its rivals especially in Germany, Italy and Spain. The company is also facing fierce
price competition in Indian market. It presently comes third behind Bharti Airtel and Reliance.
 Customer Profiles
While diversifying its markets and product and service portfolio, it has expended its customer
base globally and served its products and services to both consumers and enterprises. Traditional
voice and messing services have been already commoditized globally and they are affordable
enough for most people living in the countries where Vodafone Groups is operating.
 Human Resources
Vodafone Group employs around 85,000 people and its employees are identified as a source of
competitive advantages to improve existing customer relationships locally. Vodafone Group
(2010a) stated that “we rely on our people to maintain and build on our success and to deliver
excellent service to our customers”, and “we aim to attract, develop and retain the best people
and to realize their full potential” (p .22). The Vodafone Way program can help all employees
align with a common set of values and behaviors in order to be an admired, innovation and
customer-focused company operating with speed, simplicity and trust. Employee turnover rate
has been stable at 13%, 13%, and 15.2% in 2010, 2009 and 2008 respectively.
2.2 Industry/Competitor analysis
 Positioning Strategy:-
Vodafone
 Vodafone has veered towards warmth and emotions.
 Vodafone used the powerful visual imagery of a dog.
Airtel
 Airtel is focused on functionally and efficiency.
 Airtel choose to use music, which is not nearly as effective.
 Target Audience:-
Vodafone
 They are targeting middle class person as their target audience.
 It can be justified by their product like chota recharge.

Airtel
 A group or class of persons enjoying superior intellectual or social or economic status
 Up market professionals
2.3 Segment Target Positioning (STP) & SWOT Analysis
STP Analysis
Segment Upper class and above; Lifestyle
Target Group Corporates; student campus plans
Positioning Inviting, cheerful and humorous
SWOT Analysis
Strength 1.One of the most popular cellular service provider in India
2.One of the largest Telecom operator in the world
3.Only Indian operator, with VSNL, that has an international submarine
cable
4.High brand visibility
5.Strong advertising with ZooZoo concept
6.Tieup with international sports like FormulaOne
Weakness 1.Price competition from BSNL and MTNL
2.Untapped Rural Market
Opportunity 1.Fast expanding cellular market
2.Latest and low cost technology
3.Untapped rural market
Threats 1.New entrant's low price offering
2. Saturation point in Basic telephony service
3.Mobile Number Portability
Competition
Competitors 1.Airtel
2.Idea
3.Reliance
4.Tata Docomo
5.Aircel
6.MTNL
7.BSNL
8.Uninor
9.Tata Indicom
10.Virgin

PART-3
3.1 Company analysis on the basis of key performance indicators
Key Performance Indicators (KPIs) are a set of metrics that regularly assess the health of each
business activity against the strategic and operational objectives. KPIs represent “a set of
measures focusing on those aspects of organizational performance that are the most critical for
the current and future success of the organization”.
The actual KPI values are compared to the target KPI values in the balanced scorecard on a
regular basis while KPIs have changed in response to the business environment changes. The
better the actual KPIs are compared to the target KPIs, the higher the scores in most cases. KPIs
provide an objective feedback and facilitate the objective setting for future performance. KPIs
can be divided into the strategic, tactical, and operational levels. Strategic KPIs can be directly
translated into tactical KPIs and subsequently into operational KPIs, and they are logically tied
with each other through a set of cascading dashboards. “Dashboards can be configured and
personalized to provide strategic, operational and tactical views of the organization, processes,
services, and activities” in line with each decision making level.
According to Rasmussen, Bansal and Chen (2009), there are ten steps to use plan a KPI design
project:
 Build the team.
 Clarify and agree to the organization‟s strategies and tactics.
 Decide on dashboard categories and prioritize.
 Choose organizational deployment.
 Create a list of KPIs and metrics for each strategic objective.
 Test KPIs against framework.
 Select top KPIs.
 Choose presentation method and interactivity for each KPI.
 Document decisions and get sign-off.
 Design architecture and dashboards based on document.
Balanced Scorecard methodology in Vodafone Group
Vodafone Group has already implemented the balanced scorecard methodology that is not only
focuses on the financial perspective but also customer, business process, and learning and growth
perspectives. The approach has helped Vodafone Group create additional values. According to
EFM Software (2009), there are several reasons why Vodafone Group decided to use the
balanced scorecard and eventually developed eighty and even up to one hundred indicators:
 There was a need for operational performance measurement and feedback.

 The increasing complexity of systems and organization as a consequence of its rapid
growth led to decreasing coherence between different management reports.
 The business dynamics cause continuously changing external factors which in turn
influence the decision making.
In the interview conducted by Pointon (2005), the former CEO at Vodafone Australia, Grahame
Maher mentioned the values of the balanced scorecard: As for the BSC the beauty of that theory
is that everything in the business should be measured and not just the accepted financial
measures. The BSC has a natural flow which says the flow is PEOPLE then PROCESS then
CUSTOMER and then finally FINANCIAL measures as they are just outcomes of the other
stuffs. This is completely consistent with the Values based approach which puts people as the
most important focus.
In another the interview conducted by Supply Chain Standard (2006), the head of services at
Vodafone Global Supply Chain explained the values of the balanced scorecard as “in terms of
building the community to maximize performance, we are well down the track on structuring an
integrated SCM organization and are to implement a balanced scorecard reflecting not just
savings but the total value add to Vodafone of the SCM function”.
In addition to internal performance management objective, Vodafone Group has externally
reported some of its KPIs in its interim management statement on a regular basis. Actual and
target values of EBITDA margins, service revenue growth, free cash flow, net debt, adjusted
operating profit, and data traffic growth are included in the statement. Those four strategies are
now decomposed into strategic objectives, and performance measures are developed for each of
the strategic objectives, as shown in Figure. In the annual report for the year ended 31 March
2010, Vodafone reported the a number of KPIs used by The Board and the Executive Committee
“to monitor Group and regional performance against budgets and forecasts as well as to measure
progress against our strategic objectives” (Vodafone, 2010a, p. 24). Those KPIs are categorized
as „VF defined‟ in Figure. To completely align with each of strategic objectives, a total of five
KPIs are relatively proposed, and categorized a Proposed‟ in Figure .

KPI for Vodafone Group
 Customer Perspective
The customer delight index, churn rate, and revenues from emerging markets, and the number of
proportionate mobile subscribers are developed in line with each of strategic objectives in the
customer perspective. Mobile technologies have evolved and its customers use their mobile
phones not only to call but also access the internet, watch television, play music and take
pictures. Vodafone Groups has focused on customer value enhancement to maintain their loyalty
and trust. According to Vodafone (2010b), the Customer Delight Index measures the levels of
satisfaction and dissatisfaction: Our Customer Delight Index (CDI) measures levels of
satisfaction and dissatisfaction among consumer and business customers. It helps us to monitor
our progress against our goal to ‘delight our customers’. The CDI results are reviewed quarterly
at board level to identify priorities for improvement. In addition, a Customer Experience
Committee meets monthly to review issues affecting customer satisfaction and put action plans
in place.
 Financial Perspective
EBITDA margin, free cash flow, and return on common equity („ROE‟) are developed in
accordance with each of strategic objectives in the financial perspective. A robust network
infrastructure is a source of competitive advantages for Vodafone Group but it generally reports

large losses due to hugely spending capital expenditure to construct the infrastructure. EBITDA
margin enables to analyze the profitability of core business operations while deducting the huge
amount of interest, taxes, and capital expenditures. Free cash flow generation is a critical source
of Vodafone Group‟s growth while establishing its entities through the acquisition, joint-venture,
and strategic alliance globally. In addition, free cash flow can support higher dividends and in
turn contribute to maximizing shareholder‟s values. ROE is the most important bottom line
accounting ratio that represents the actual return earned by shareholders and is the best measure
to directly assess its actual performance against the strategic objectives „drive shareholder
return‟.
 Learning and Growth Perspective
ARPU, data revenue, fixed revenue, and the number of enterprise mobile voice connections are
developed in accordance with each of strategic objectives in the learning and growth perspective.
Most of those measures are typically categorized into the financial perspective. However, not
tactical and operations KPIs but strategic KPIs are analyzed in this research and therefore those
measures are considered as a reflection of Vodafone Group‟s innovation in this research.
Vodafone Group hasn‟t implemented the cost leadership strategy to gain a competitive
advantages but it relatively focuses on creating and launching new value-added services to
increase ARPU. ARPU can be therefore considered as one of the key measures of its innovation.
While traditional voice and messaging services has captured more than 75% of its service
revenues, data service is targeted as one of three key areas for growth, and therefore the data
revenue is a key measure to directly evaluate its growth objective.
Vodafone Group has expanded fixed broadband customer base to be a total communications
provider. It has only fixed broadband services in its fixed service portfolio, and the broadband is
also perceived as one of three key areas for growth. Fixed revenue represents the growth
objective and is considered as a key measure. The last one of three key areas for growth is the
enterprise services. While the enterprise service revenues are not independently reported in the
annual report, the main enterprise service is an enterprise voice service and therefore the number
of enterprise mobile voice connections can be considered as a key measure of its growth
objective.
 Business Processes Perspective
The employee turnover rate, annual capital expenditure, and operational efficiency ratio are
developed in accordance with each of strategic objectives in the business process perspective.
Vodafone stated that “We rely on our people to maintain and build on our success and to deliver
excellent service to our customers”, and “we aim to attract, develop and retain the best people
and to realize their full potential” (Vodafone, 2010a, p .22). The employee turnover rate is one of

the key measures to evaluate its performance against the strategic objective „maintain high
performance benchmark for employee engagement‟.
As a part of cost efficiency programs, the two-year working capital reduction program is
executed and the working capital itself is the best measure to directly evaluate the actual
performance against the targeted working capital. While the £1 billion cost reduction program
has already been delivered, Vodafone has extended this program to a further £1 billion cost
saving by 2013. £1 billion includes both the capital and operating expenditures and it might be
difficult to focus on either capital or operating expenditure. However, the objective of the cost
reduction program is to improve its operational efficiency and, the number of subscribers versus
the number of own employees‟ ratio can alternatively used.
3.2 Marketing strategy of Vodafone
 Vodafone’s strategy is customer focused and product led; the company is continually
developing new products and services which utilize the latest technological advances.
 To keep its leading edge, Vodafone is continually looking to add value to the services it
provides and to the packages it offers to customers.
 ZooZoo , the new brand ambassador of Vodafone, has created a furors in the advertising
industry.
 Vodafone has given birth to the Zoozoo: a special character created specifically to convey a
value added service (VAS) offering in each of the newly released commercials.
 Vodafone has come with creative advertising campaign for its various plans.
 This strategy has captured the imagination of millions. The strategy is a buzz that lives up
to the brand image of great creative's and clever marketing.
 In the first 10 days of IPL (Indian premier league) it has reached a cumulative of 89 million
people. This is a wonderful strategy adopted by Vodafone.This has helped the company to
raise not only its profits through sales but has also tremendously increased its brand value.
Zoozoos have become so popular that Vodafone has succeeded in its effort of viral or buzz
marketing. Their add campaign has gained so much popularity all over the world.

3.3 Business strategy of Vodafone
3.4 Strategic & Financial Objectives
The primary objective of Vodafone as a business entity is profit maximisation. The company has
a mission statement that ensures for this objective to be achieved in the best possible manner.
Vodafone’s mission statement is “to be the communications leader in an increasingly connected
world” (Annual Report, 2010). Accordingly, this mission statement is communicated to all
stakeholders of the company, especially to 84,990 employees (Company Description, 2010) of
the company, due to the fact that it is employees who are going to contribute the most to the
achievement of the mission statement.
Vodafone is committed to achieving its aims and objectives through offering innovative and
superior services. According to Saplista (2008), Vodafone is not limited to offering basic
telecommunications services such as mobile phone calls and text messaging, but also offers such
advanced services as:

 Vodafone at Home and Vodafone Office represent integrated mobile and communication
services to satisfy household, as well as business needs.
 Vodafone Passport allows customers to ‘take their home tariffs abroad’ through roaming
services which is possible due to the wide global presence of the company.
 Vodafone Live! is integrated communication and multimedia solution offered by the
company to be used through mobile phones and notebook computers.
 Vodafone 3G offers 3G services that allow customers to transfer and download data in
various formats.
 Vodafone Mobile Connect data cards and Mobile Applications offer customers the
possibility of portable internet.
3.5 Strategic Model for Vodafone
The level of competition in each industry, especially in telecommunications industry Vodafone is
operating in has become very fierce. The only way to survive and expand in such a competitive
environment for Vodafone is to have an efficient strategy that would be the source of
competitive edge for the company. Currently Vodafone has no clear strategy. Therefore potential
customers are not sure in what ways the company can offer value to them.
According to Porter’s generic strategies companies can choose cost leadership and differentiation
strategy in narrow and broad scope (Porter, 1985). Vodafone is highly recommended to
implement differentiation strategy in a industry-wide scope. Thus, Vodafone should develop
products and services with additional features that present value for potential and existing
customers, and the company can charge additional extra prices for this additional feature.
For instance, in its portable and home broadband services Vodafone can further invest in
research and development and achieve increasing the speed of the internet browsing they are
offering. This particular strategy is most likely to prove efficient due to the fact that although
currently there are many internet providers in UK the speed of internet browsing tends to
decrease during specific hours of the day.

Another justification for the suitability of differentiation strategy for Vodafone relates to the fact
that due to the current size and financial resources of the company Vodafone can commit to high
level of research and development expenses this strategy initially requires. Although Vodafone’s
competitors do understand the advantages of differentiation strategy, unlike Vodafone the state
of their financial resources do not allow them to adopt differentiation strategy. Information
system can be used at each above specified decision-making level in order to give competitive
edge to Vodafone manager at that level in particular and to the company itself in general. Curtis
and Cobham (2008) define information system as an integrated combination of information
technology components and related human efforts that is used to assist in operations and decision
making.
Information system at each decision-making level at Vodafone should be devised and maintained
in a way that it can serve the two following purposes:Firstly, information systems should support
the key business functions, and create competitive edge for Vodafone.Secondly, information
system should assist in efficient facilitation of Vodafone’s customer relationship management. In
order to achieve these objectives the following recommendations should be implemented.
 Strategic level management. Information system at strategic level for Vodafone should
include all external and internal factors that are going to affect the company. Information of
such a nature should be supplied to strategic level managers systematically in order to assist
them in decision-making. Moreover, information system intended for Vodafone strategic
level management should contain detailed information about potential overseas markets,
information regarding the extend of competitor activity as well as information regarding the
suitability of Vodafone products and services to today’s competitive standards. Inefficient
information system at strategic level management is going to have dramatic negative
consequences caused by not being able to respond to changing market conditions, because
there was no accurate information about the changing market conditions in the first place.
 Tactical level management. Information system for Vodafone managers at tactical level
should include breakdown of sales by a region, as well as breakdown of sales by a product or
a service. It is important for such type of information to be supplied to tactical level
managers on a regular basis. Moreover, information technology should be widely used in
order to collect such type of information, because it will make the process faster, as well as
cost efficient. Not implementing and maintaining efficient information system for tactical
level management will cause huge losses for Vodafone which is going to affect the whole
region and damage the image of the company dramatically.

 Operational level management. The scope and range of information system in operational
level management is considerably smaller compared to strategic and tactical levels.
Nevertheless, it is equally important for operational level management at Vodafone to have a
constant supply of information relating to the process of products and services, stock
availability, customer credit ratings etc.Again information technology must be widely used in
order to process and store information system at operational level management. The
negligence of this recommendation may result in loss of revenues caused by the absence of
stock in stores, improper pricing and many other ways.Currently Vodafone commands a
leading position in the global telecommunications market. However, due to the constantly
changing marketplace the company cannot afford to take this position for granted and has to
engage in increasing its competitive advantages in many fronts.
3.6Recommended Organizational & Business Strategies
 Building a learning organization and a professional intellect
Vodafone Group has embraced diverse workforce and offers equal opportunities for all aspects
of employment and advancement, regardless of race, nationality, sex, age, marital status,
disability, religious or political belief, to understand expectations of its diverse customers around
the globe and have required skills and competences to create and launch the innovative and
differentiated products and services that Vodafone Group meets its customers‟ requirements.
Vodafone Group created a leaner and agile structure with clear accountabilities in 2009 to
accommodate rapid growth. Three regions, including Europe, Africa and Central Europe, and
Asia Pacific and Middle East, were created and each regional CEO was appointed. Along with
the group-wide organizational restructuring efforts, several centralization initiatives have been
accelerated, including supply chain, product development, IT and network programs, and
terminal procurement. As the result, approximately 1,900 jobs were eliminated but the overall
number of employees grew 9% because of rapid growth in emerging markets and business
acquisitions.
Although organizational structure has been continuously improved in response to market
environmental changes, Vodafone Group has been committed to helping all employees reach
their full potential through ongoing training and development. “In the 2009 financial year,
Vodafone provided an aggregate of 230,000 days of training, an average of three days per
employee”, and “this training program was extended to all employees via an online interactive
course that has been translated into 11 languages and rolled out to 18 countries”.

 Taking advantage of Customer Relationship Management tools
Vodafone Group has developed the group-wide strategy that is associated with its better
understanding of the importance of the customer experience to its business success. Delivering
value-added products and services that can meet individual customer needs and widen the scope
of its relationship with its customers are essential to reshape its competitive environment.
Vodafone Group has standardized on Siebel CRM platforms across three geographies to collect,
analyze and share customer information across multi-channels, including customer service
agents, sales and marketing teams, to gain a 360 degree view of customers, and measure and
manage customer satisfaction, customer loyalty, revenue assurance, revenue growth and
profitability. Employees in Vodafone Group have access to a centralized repository for customer
information in the systems.
 Top Line Improvements
Vodafone Group has definitely had better understanding of the strategic values of IT to gain and
maintain competitive advantages from the viewpoint of both top line and bottom line
improvements. To improve top line, general telecommunication operators consider IT as sources
of innovative and differentiated products and services that they create and launch globally in a
timely manner. Vodafone Group has not used the cheaper price than other competitors to attract
new customers and retain existing customers to become the largest or the second largest mobile
operator in the most markets the Group has ever entered but it has focused on creating and
launching new value-added services that entice new customers. Arun Sarin, the former CEO of
Vodafone Group stated. We have rededicated ourselves to delighting our customers because we
believe this is the foundation for our continued success. We recognize that every customer
interaction provides another opportunity to win loyalty and that‟s why we continue to raise
standards on the quality of customer case in our call centers and our stores and the quality of our
networks. Key to delighting our customers is our ability to deliver superior voice and data
services according to differing customer needs. The choice of right IT at right time is necessary
to drive current and future returns and intellectual capital that articulate and structure all the
stakeholders‟ values, and Vodafone Group‟ s three key strategic IT initiatives have been sources
of competitive advantages to improve top line.
 Agility to adapt the advanced technologies
Telecommunication operators‟ agility to adapt the advanced technologies has a great impact on
innovative and differentiated products and services, including the converged services of network
data, services data and customer data available to improve customer experience in response to
the changing customer needs and market environment. Saxtoft (2008) argued that “competitive
advantages in the future convergent communications industry will be based on the organizational
ability of communications service providers to utilize the specific mix of network data, services
data and customer data available to each of the players in the market”. Vodafone‟s ability to

adapt new IT continuously ensures that their customers are able to “stay connected to the people
and the information that are central to their lives – via voice, text, instant messaging, e-mail,
music, communities, news, and applications both social and work related – whenever, wherever”
.Vodafone Group thus created Vodafone 360, Vodafone Vorteil, and Cloud Computing services
and the Group in turn can greatly improve customer experience, and eventually gain and
maintain its competitive advantages. Along with increasing bandwidth demands and a data
dominated traffic mix, the ability to optimize its network capacity according to the differentiated
products and services has been essential in improving quality of services for these services.
Vodafone launched „Vodafone 360‟, a suite of new Internet services for the mobile and PC that
gather all of customer‟s friends, communities, entertainment and personal favorites. Vodafone
360 encompass a universal contacts address book „Vodafone People‟ that automatically
synchronize all contacts from a customer phone, Facebook, Windows Live Messenger, and
Google Talk, and an online content and data management tool. Vodafone 360 brought together
many existing Vodafone mobile Internet initiatives under a common and intuitive service
umbrella. Vodafone 360 represents the new service standard to take everything back in Vodafone
and superimpose proprietary ownership over all service aspects while dispelling the notion that
mobile operators are unable to response to the full force of the innovation that Apple iPhone
brought to market. This is the first time a mobile operator has created an experience which can
compete against the iPhone standard of excellence and superior user interface.
Vodafone is now attempting to move into the fixed voice and broadband markets and has either
acquired fixed Internet Service Providers in some countries or formed partnerships in the other
countries where acquisitions are not feasible or not cost efficient. “The previously pure mobile
operator is now following a total communications strategy which includes mobile (cellular),
broadband (fixed) and wireless; it has been offering combined services, with fixed, mobile and
broadband services under a single bill”.
Cloud Computing has become popular in the telecommunications industry all over the world. It
is “a large-scale distributed computing paradigm that is driven by economies of scale, in which a
pool of abstracted, virtualized, dynamically-scalable, managed computing power, storage,
platforms, and services are delivered on demand to external customers over the Internet”, and“
has become the hottest technology in IT” .Vodafone Group announced a strategic partnership
with Decho Corporation to deliver a series of „Could Services‟ for both enterprise and consumer
markets. The first service to emerge across the Vodafone Group footprint is the „Vodafone PC
Backup‟ service that enables customers to save personal data from the PC to a remotely hosted
site. They are able to view and share the data from their account through the web browser of
their PC while reducing the need to transfer the data from one device to others. None of
Vodafone‟s key Tier 1 competitors has launched free PC backup and online storage aggressively
with consumer mobile broadband services and Vodafone Group is relatively staking leadership
in consumer Cloud Service provision. Emma (2009) argued that “A Vodafone-branded PC
backup service promises powerful value-added differentiation for the operator‟s mobile and

fixed broadband portfolio across its key European markers by year-end”. Vodafone Group can
continuously maintain its competitive advantages while launching a series of Cloud Services
faster than other competitors, in addition to existing PC backup and online storage services.
 Optimizing entire value chains and redefining industry
Optimizing entire value chains beyond Vodafone Group and its traditional suppliers, and
redefining industry are identified as sources of competitive advantages to create and launch
innovative and differentiated products and services. The telecommunications industry is
confronted with unprecedented challenges in breaking down traditional industry boundaries and
redefining industry in response to changing market environment while the Internet companies
such as Google, eBay and Yahoo have demonstrated business models that enable third parties to
develop new services by combining existing services to increase the value of the traditional and
original services. Service providers are no longer limited to the traditional voice and simple data
services but are comprised of content, application, and other service providers. To compete
against these new service providers, an effective service delivery framework is essential, to
deliver and maintain differentiated services beyond traditional boundaries, achieve time to
market, and conclude business agreements among all stakeholders.
 Group Technology
Vodafone Group‟s has driven the Group Technology initiatives that have managed and
controlled group-wide projects to orchestrate the move toward significant coordination and
identify and disseminate best practices to focus on expansion of service capacity while
replicating business models across a number of countries and maintaining cost efficiency.
Vodafone Group created two central functions, "Group Marketing (to drive revenue growth), and
Group Technology and Business Integration (to drive cost and scale benefits”, and “thy purpose
of Group Technology will be to lead the implementation of standardized architecture for
business process, information technology and network systems” (Hitt, Ireland and Hoskisson,
2008,). The initiatives have supported the third generation (3G) network rollout, the
enhancement and expansion of Vodafone Live service to Germany, Ireland, Italy, the
Netherlands, Portugal, Spain, Sweden and then UK, and the development of Vodafone Group‟s
business offering on a global basis. Vodafone Group has benefited from the effective and
efficient Group Technology initiative. First, Vodafone Group is given more strategic option for
marketing and sales of its products and services. Second, the time-to-market becomes shorter by
consolidating its development resources and sharing the solutions. Finally, cost reduction arises
from avoiding multiple development
 Bottom Line Improvements
On the other hands, Vodafone Group has capitalized on IT capabilities to implement its strategic
initiative, „One Vodafone‟ program, which transforms 16 operating companies into a united
operation to achieve streamlined cost effective and efficient group. Vodafone Group has

embedded IT sharing, outsourcing, and centralization and consolidation strategies in order to
achieve the objectives of the program. Radio access network are shared with the other mobile
operator, Orange, IT application development and maintenance are outsourced to IT outsourcing
vendors, IBM and EDS, and supply chain management function and European data centers are
centralized and consolidated to Vodafone Group.
 Using IT initiatives to transform the operator
The „One Vodafone‟ program was focused on key initiatives to integrate business activities to
leverage economies of scale and scope of Vodafone group to transform the Group into a
streamlined, cost-effective and efficient organization while standardizing designs and processes,
reducing duplication, centralizing and consolidating certain functions and sharing best practices
across operating companies. . The program was targeted at achieving £2.5 billion of annual pre
tax operating free cash flow improvements in Vodafone Group‟s controlled mobile business by
the end of March 2008. Vodafone Group predominantly embedded IT sharing, outsourcing, and
centralization and consolidation strategies to achieve the objectives of One Vodafone program
that transform multiple operating companies around the globe in Vodafone Group into a
streamlined, cost effective and efficient organization.
 Centralized Supply Chain Management
A supply chain is a series of activities in which materials move through from initial suppliers to
the final customers. In Vodafone Group, handsets, network equipment, marketing and IT
services account for the majority of Vodafone‟s operational expenditures. Centralized Group‟s
Global Supply Chain Management (GSCM) team has been driving „One SCM‟ to leverage its
scale to significantly reduce operational expenditures. One SCM delivers values through robust
integration across all Vodafone‟s operating companies to centralize and manage most of the
Group‟s relationships with their suppliers. A consistent supplier performance management
process has been implemented across the Vodafone Group‟s mobile operations and key suppliers
are evaluated in the six areas “covering aspects of financial stability, technological and
commercial criteria, delivery and quality management requirements and corporate
responsibility”.

PART-4
4.1 Vodafone-Hutchison tax case
Vodafone was embroiled in a $2.5 billion tax dispute with the Indian Income Tax Department
over its purchase of Hutchison Essar Telecom services in April 2007. It was being alleged by the
Indian Tax authorities that the transaction involved purchase of assets of an Indian Company,
and therefore the transaction, or part thereof was liable to be taxed in India.
Vodafone Group Plc. entered India in 2007 through a subsidiary based in the Netherlands, which
acquired Hutchison Telecommunications International Ltd’s (HTIL) stake in Hutchison Essar
Ltd (HEL)—the joint venture that held and operated telecom licences in India. This Cayman
Islands transaction, along with several related agreements, gave Vodafone control over 67% of
HEL and extinguished Hong Kong-based Hutchison’s rights of control in India, a deal that cost
the world’s largest telco $11.2 billion at the time.
In January 2012, the Indian Supreme Court passed the judgement in favour of Vodafone, saying
that the Indian Income tax department had "no jurisdiction" to levy tax on overseas transaction
between companies incorporated outside India. However, Indian government thinks otherwise. It
believes that if an Indian company, Hutchison India Ltd., conducts a financial transaction,
government should get its tax out of it. Therefore, in 2012, India changed its Income Tax Act
retrospectively and made sure that any company, in similar circumstances, is not able to avoid
tax by operating out of tax-havens like Cayman Islands or Lichtenstein. In May 2012, Indian
authorities confirmed that they were going to charge Vodafone about 20000 crore (US $3.3
billion) in tax and fines. The second phase of the dispute is about to start. The Bombay high
court directed the Income-Tax Appellate Tribunal (ITAT) to hear a Rs.8,500 crore transfer-
pricing tax dispute relating to the Indian arm of Vodafone Group Plc from 21 February on a daily
basis till a final order is passed.
4.2 What’s really at stake in the Vodafone tax case
The Supreme Court judgment in the Vodafone case argues that the 'corporate veil' cannot be
pierced as long as there was no intention to avoid taxes. Rahul Varman on how and why
corporations in India manage to undermine the law and the public good for the sake of private
profit.The case concerns a tax dispute between the Vodafone group and the Indian income tax
(IT) authorities over the acquisition by Vodafone International Holdings BV (VIH) (part of the
Vodafone group and a company resident for tax purposes in the Netherlands) of the entire share
capital of CGP Investments (Holdings) Ltd (a company incorporated in Hong Kong but resident
for tax purposes in the Cayman Islands) on February 11, 2007 for about $11 billion (Rs 55,000
crore) from Hutchison Telecommunications International Ltd (HTIL). CGP, through various
intermediate companies/contractual arrangements, controlled 67% of Hutchison Essar Limited
(HEL), an Indian company. The acquisition resulted in Vodafone acquiring control over Hutch-
Essar, a joint venture between the Hutchison group and the Essar group, which had obtained
telecom licences to provide cellular telephony in different circles in India in November 1994.
Because the sale was supposed to have been made overseas, no taxes were paid in India.
PART-4
PART-4

The IT authorities in India contended that the primary aim of this transaction was to acquire 67%
controlling interest in Hutchison Essar Limited, a company resident in India. They therefore
sought to tax capital gains under Section 9(1)(i) of the Indian Income Tax Act 1961 arising from
the sale of the share capital of CGP on the basis that CGP, while not a tax resident in India, holds
the underlying Indian asset. According to the tax authorities the profit made by Hutchison Hong
Kong, while it sold its shares of Hutch-Essar to Vodafone, was generated in India. Therefore,
Vodafone, the buyer of the shares, had an obligation to withhold and pay the tax in India, before
making the payment to Hutchison. The tax demand was $2.5 billion (Rs 11,000 crore, as much as
the entire MNREGA budget in 2007). Vodafone contested, stating that neither Vodafone nor
Hutch was liable to pay the tax as both the companies were located outside India and the deal
happened outside India.
Vodafone is a British multinational telecommunications company headquartered in London. It is
the world's largest mobile telecommunications company measured by revenues ($73.5 billion in
2011) and the world's second-largest in terms of subscribers, with over 439 million subscribers
as of December 2011. In 2011 it earned profits of $12.6 billion, while it owned assets worth $242
billion and had an employee base of 83,862 . Vodafone India currently is the third largest mobile
network operator in India.
Vodafone filed a writ petition in the Bombay High Court challenging the jurisdiction of the tax
authorities. In September 2008 the Bombay High Court held that the transaction was one of
transfer of capital assets situated in India, and accordingly, the Indian income-tax authorities had
jurisdiction over the matter. It concluded that it would be simplistic to assume that the entire
transaction between HTIL and VIH was fulfilled merely upon the transfer of a single share of
CGP in the Cayman Islands. The two-judge bench noted that "The commercial and business
understanding between the parties postulated that what was being transferred from HTIL to VIH
BV was the controlling interest in HEL…. HEL was at all times intended to be the target
company and a transfer of the controlling interest in HEL was the purpose which was achieved
by the transaction" .
The Supreme Court verdict
The case went up to the Supreme Court and, based on two key but independent arguments, the
highest court concluded that there was no merit in the High Court's verdict. The first line of
reasoning was that the transaction between Vodafone and Hutch was a share transfer (sale) rather
than a transfer of capital assets and that the ownership of the capital assets remained vested in the
Indian company. The judgment took recourse to the legal distinction between a company and its
shareholders and thus the judgment does not make a distinction between shareholding that
constituted a controlling interest and that which was a pure financial investment. Consequently it
becomes completely immaterial in this specific case that the share(s) actually transferred were
not of the company located in India but of offshore companies that ultimately controlled the
shares that constituted the controlling interest in the Indian company. Even if the shares were of
a company located in India, in the court's view it would not have constituted a transfer of capital
assets. Once it is accepted that the shareholders of a company have a legal identity distinct from

the company, no matter what the proportion of shares they hold, it follows that the two
companies would have distinct identities even if one held a controlling share in the other. The
Supreme Court judgment makes it a point to emphasise that even a subsidiary has an identity that
is distinct from its parent holding company .
The second interesting aspect of the Supreme Court judgment is that it argues for a "look at" test
in which tax authorities consider the entire Hutchison structure as it existed, "holistically", at its
face value, and not adopt a "dissecting approach". In other words, authorities should not ask
whether the transaction is a tax avoidance method, but apply the "look at" test to ascertain its
legal nature. The Supreme Court was not in favour of the High Court's "look through" test
because, it claimed, this was inconsistent with the need for certainty and consistency of tax
policies that are crucial for taxpayers' confidence (especially foreign investors). The judgment
argues that such a going behind the "corporate veil" or looking through would be legitimate only
in cases where it can be established that there is a deliberate intention of evading taxes. In the
Supreme Court's view no such inference can be made in this case if the steps that led to the
creation of the complex holding structure of Vodafone and the eventual Vodafone-Hutch
transaction were seen in the proper context. According to the court the structuring of the transfer
of control from Hutch to Vodafone was not done with the specific intention of avoiding taxes.
Hence the corporate veil need not be pierced and the fact that there was a transfer of control from
Hutch to Vodafone must be ignored. And thus the tax authorities should concern themselves only
with the corporate structure or "form" of a merger deal, and not the "substance" of what assets
are changing hands.
An additional implication of the judgment is that as long as it can be established that a
mechanism was not originally created with the intention of avoiding taxes, it does not matter if it
eventually led to such a consequence. The court has directed that when assessing whether an
entity is evading the tax law, the authorities have to examine whether the means of evasion
(which here is the creation of CGP, Hutchison's Cayman Islands unit) was originally intended for
this purpose. Since Hutchison made its investments and engaged in activities in India (in
collaboration with Essar) for several years before the deal and during that period CGP existed,
the latter is not to be seen as primarily created to avoid capital gains .
The underlying issues involved
For a layperson who is not concerned with the technicalities of tax law and jurisprudence, the
case is significant for three important issues.
Why 'look at' and not 'look through'?
The first interesting issue that arises is why authorities should look at and not look through the
transactions, especially if what is being examined are complex transactions of mammoth
corporations like Vodafone? After all, even simple cases of wrongdoing may not be caught out
without looking at the substance of the act beyond the mere form of what is being claimed by the
parties. According to Girish Dave, retired chief commissioner of income tax, Mumbai, who was
closely involved in scrutinising the Vodafone-Hutch deal:

"This entire investment was not in purchase of one share of one US dollar of CGP's only capital.
The investment was in the Indian mobile telecommunication business. CGP had no balance sheet
as it had no accounts, no profit and loss account, so a question arises how this value of US $11.2
billion was arrived at when no accounts of CGP were available even in the due diligence report
of E(rnst)&Y(oung). If this investment was in the telecom business in India, a natural corollary
would be that it was this investment in entirety which was in fact sold. Investment was not in one
share of CGP, for which in the year 1998 Hutchison may have paid one US dollar to Ms Nicole
Melia from whom it acquired that one share."
Ostensibly this needs to be done to attract foreign investment, but as Supreme Court lawyer
Prashant Bhushan points out, in this deal no foreign investment as such is involved, as the Indian
telecom company has merely been transferred from one company to another without any
additional foreign investment.
Why Cayman Islands?
The second interesting aspect is that the court chooses to ignore the fact that the merger deal was
structured through a corporate vehicle stationed in the tax haven of Cayman Islands. In the
Supreme Court's view, since Hutch-Essar existed for several years before the 2007 deal and was
an active corporate and taxpaying subject, the deal was perfectly legal and it cannot be said that
the Cayman Islands were brought into the loop with the express purpose of tax avoidance. But
the point is that what else could be the possible purpose of bringing Cayman Islands and vehicle
stationed there into the deal if not tax avoidance? It is hard to imagine any other strategic
advantage that Cayman Islands can bring in for a corporation like Vodafone. The Cayman
Islands is a British Overseas Territory located in the western Caribbean Sea, which is just 264
km2 in area with a population of 55,000. Considered a refuge of pirates and deserters in the 17th
century, the island has evolved into a tax haven which is now the fifth-largest banking centre in
the world, with $1.5 trillion in banking liabilities.
But this is not the first time that corporations in India have undermined the law and its
underlying intent of public good for the sake of private profits. After all, the tax havens have
been legitimised way back in 1982 when India signed the double tax avoidance agreement
(DTAA) with Mauritius in order to attract foreign investments at the time of the launch of the
first wave of 'economic liberalisation'. According to the IT Act if India has signed a DTAA, the
taxpayer can pay tax in either of the two countries. But the catch here is that Mauritius has no
capital gains tax, so a company doing a Vodafone-like deal in Mauritius will escape without
paying any tax whatsoever. This has resulted in large amounts of investments being routed
through Mauritius to avoid taxes and regulatory regimes in more established nation-states.
Hence, due to the absence of capital gains tax and low tax rates on corporate profits, over 15,000
international companies have set up affiliate or associate firms in Mauritius. Not surprisingly, an
economy which is all of $11 billion (same as the merger deal being discussed here!) is the single
largest source of foreign investment for India. In recent years, Mauritius has accounted for
approximately half of the annual inflows of FDI to India and around 40% of FII money that has
come into the country's stock exchanges. Prof Arun Kumar of Jawaharlal Nehru University

(JNU) claims that a lot of this 'foreign investment' is the money that was laundered out of
country and which is now being routed back through tax havens like Mauritius .
Compartmentalisation of the corporate form
Perhaps the most interesting and the least commented aspect of the Supreme Court judgment is
that which takes us to the very heart of the contemporary debate regarding the nature of gigantic
corporations like Vodafone. The judgment has upheld the principle of maintaining a clear-cut
separation between companies and between companies and their shareholders . But the point is
that if the holding companies, the subsidiaries and their respective shareholders are all different
entities then how do we make sense of the complex and mammoth corporate structures like
Vodafone that influence the lives of such large numbers of people and control enormous natural
and public resources like spectrum globally?
A bit of history here may help us put things in perspective. To begin with it was not usual for
early corporations even in the US (where they first came to the fore) to be able to hold interests
in another corporation -- in fact it was illegal. The earliest forms of corporations were those that
had the clearest public purpose – churches, schools, universities (Harvard was chartered in 1688)
and cities. Over time, the institutional form was used for public needs with clear economic
benefits – canals, banks, bridges, and turnpikes. In the 18th century, corporations could come up
only in the public domain through special parliamentary charters – they were provided with
privileges like eminent domain (14), tax breaks, or monopoly rights only because they were
supposed to deliver public goods, like waterways, roads, canals, banking, and other tasks which
governments felt could not or should not be conducted privately as they were too risky, too
expensive, too unprofitable, or too public, that is, perform tasks that would not have got done if
left to the 'efficient' operations of the markets. Thus corporation arose as quasi-government
agencies -- some of its particular features, such as limited liability, perpetual life, and parcellised
ownership were established in order to compensate for the 'inefficient' tasks that they were
assigned, where market would not support them . The debate whether a company could own
shares in other companies was intense, and continued for decades in the US, as holding
companies appeared, and were outlawed, followed by trusts, which were then outlawed, and
finally by conglomerates, which successfully completed the redefinition of the nature of
corporate property. US states varied considerably in their laws permitting stock ownership -- at
one extreme Virginia prohibited stock ownership by corporations in other companies in the
1880s, while Pennsylvania allowed manufacturing companies to own railroad stocks to create
spur lines to link their factories. When New Jersey allowed any corporation that incorporated in
the state to own interests in other companies in 1888, corporations flocked for registration. By
1901, 66% of US firms with $10 million in capital or more, and 71% of those with $25 million
or more were incorporated in New Jersey .
Thus while we are debating the tax and welfare implications of the Vodafone case (and
obviously they are far-reaching), the most basic question that ought to be asked is why such
mergers should be allowed in the first place? Because the stark fact is that in the name of market
forces and the law, what is driving such mergers is basically the intent to kill the possibilities of

market competition, in the name of which, ironically, such mergers and consolidations are
mostly sanctified. Thus it is interesting that while such mergers are done in the name of market,
efficiency and public welfare, their tax liabilities are also discounted in the name of public
welfare, this time for investments and economic growth! And all this can always be justified by
asserting that corporations are a legal fiction and cannot be said to have any purposive intent, as
in the present judgment. And yet when it is convenient corporations can take the form of a
natural person and acquire basic human rights like free speech and due process too! Historically,
various arms of a democratic state have been complicit in this evolving form of corporations.
Thus mammoth corporations can apparently keep acquiring new forms, new faces, and even new
logic depending upon the issues at hand, even while there is a fundamental conflict between the
private profits of global elites, whose handmaiden modern corporations have become, and the
public interest of common people across the globe. Witness for instance the never-ending ordeal
of the lakhs of victims of the world's worst industrial disaster in Bhopal in 1984, which happened
at a site of one of the largest chemical corporations in the world at the time, Union Carbide.
Within 10 years the plant was sold off to a so-called 'Indian' company which in 2001 in turn
passed it off to one of the largest chemical companies in the world, Dow Chemical of the US. Of
course now Dow claims that it has nothing to do with the never-settled liabilities of the accident
towards the people of Bhopal, while it has acquired all its assets ! So tomorrow if it is found that
spectrum was allocated illegally to Hutch-Essar in earlier years, we should be prepared to hear
that Vodafone has nothing to do with it (of course Hutch and Essar will also wash their hands of
this!), while it profits from the same spectrum .
Framed in narrow legal terms and the limiting framework of the so-called welfare nation-states
in the times of globalisation, it has become a continuously losing battle for the people at large.
This tide can be turned only by a clear realisation that public good and modern corporations are
inversely proportional to each other and this debate needs to be taken much beyond immediate
tax and legal issues.

4.3 The story so far
1. Offshore sale transaction between Hutchison Group, Hong Kong (Hutch) and Vodafone in the
year 2007.
2. In the same year (2007), the tax authorities issued a show-cause notice to Vodafone, asking
why it should not be treated as a defaulter for not deducting Indian withholding tax while making
payments to Hutch. According to the tax authorities, this offshore transaction effectively resulted
in transfer of an Indian asset and hence liable to capital gains tax in India.
3. The show-cause notice was challenged by Vodafone in a Writ Petition (WP) before the
Bombay High Court (HC) which was dismissed in December 2008. The HC observed that prima
facie Hutch had earned taxable capital gains in India as the income was earned from transfer of
its business/ economic interest in the Indian company. The HC also took serious note of the fact
that Vodafone did not produce some of the critical transaction documents which could have been
instrumental in determining taxability of the transaction in India.
4. Thereafter, a Special Leave Petition (SLP) was filed by Vodafone before the SC. This SLP
was dismissed and the SC directed the tax authorities to decide whether they had jurisdiction to
proceed against Vodafone in the matter. However, the SC permitted Vodafone to challenge the
decision of the tax authorities directly before the HC rather than first going through the normal
channels of Commissioner (Appeals) and the Income Tax Appellate Tribunal.
5. In May 2010, the tax authorities passed an order taking the view that they had jurisdiction to
proceed against Vodafone and accordingly treated the company as an 'assessee in default' for not
withholding tax from payments made to Hutch even though it was an offshore deal between two
non-resident parties.
6. Vodafone challenged this order of the tax authorities before the HC. The HC dismissed the
case and ruled that the tax authorities indeed had jurisdiction to proceed against Vodafone as the
income (capital gain) did accrue / arise in India by virtue of transfer of assets situated in India.
7. Aggrieved by the order of the HC, Vodafone approached the SC.
8. On 20 January 2012, the SC pronounced its ruling in favour of Vodafone holding that the
transaction was not taxable in India and thus the company was not liable to withhold tax in India.
9. Soon thereafter, the Finance Act, 2012 amended Income Tax Act retrospectively to bring
offshore indirect transfer of Indian assets (Vodafone like transactions) within the Indian tax net
which triggered lot of criticism from the investor community globally.
10. Sensing the trouble and to allay fears of investors, the Prime Minister of India constituted an
expert committee to review these retrospective amendments and to recommend changes to the
government
11. The committee submitted its report in October 2012 to the government and since then there is
no clarification or amendment as regards this provision
Since last year, the attempts to settle the tax dispute between Vodafone and the Indian
government is another endless saga. According to recent media reports, the outcome of the
settlement process seems to be uncertain.

The mechanics of the settlement process being adopted in Vodafone's case is shrouded in
mystery. The settlement process began with Vodafone initiating a dispute resolution system
under the Bilateral Investment Promotion and Protection Agreement (BIPA) between India and
the Netherlands and then wanting to resort to conciliation under the United Nations Commission
on International Trade Law (UNICATRAL) rules while the Indian government wanted to have it
under Indian laws.
It is noteworthy that the ability to settle taxation matters under the Indian law is not free from
doubt. Further, with Vodafone lately pressing for widening of the scope for conciliation to
include its transfer pricing dispute as well, it is believed that the government is seeking to
withdraw the conciliation talks which may now pave way for international arbitration
proceedings. Under the BIPA, the dispute can be referred to an arbitral tribunal by either party to
the dispute in accordance with UNICATRAL rules if the investor (Vodafone) so agrees. Thus,
Vodafone may initiate the arbitration proceedings.
According to the BIPA, the decision of the arbitral tribunal shall be final and binding and the
parties shall abide by and comply with the terms of the award. One needs to wait and watch how
this turns out. It is also understood that the Indian government may take a position that taxation
matters are outside the purview of BIPA.
From an equity and fairness perspective, Vodafone has a case to say that the position it took was
based on its interpretation of the then existing law which even the apex court agreed to in its
ruling delivered in January 2012. Importantly, where the tax authorities feel that it is demanding
what is its rightful claim, the same is being demanded and enforced against the payer on account
of its withholding tax non-compliance and not the payee to whom the income being taxed
actually belongs. The expert committee constituted by the Prime Minister also recommended that
the amendment which is not merely clarificatory in nature should be made prospectively and
where it is made with retrospective effect, the payer should not be proceeded against and the
provisions be applied to the payee to whom the income actually belongs.
The way things stand currently, it is not quite clear as to in which direction this dispute is likely
to move. Given that clarity and certainty in fiscal laws including tax laws is of paramount
importance, one would like to believe that post the upcoming elections, the next government is
likely to give full attention to this long outstanding issue and seek to resolve it on a priority basis
to maintain and promote India's image as an investor friendly country.
To this outstanding dispute, the latest addition is the Rs 3,700 crore tax demand on Vodafone on
account of a transfer pricing dispute with the tax authorities. The authorities have taken a
position that transfer pricing adjustments need to be made in the context of sale of call centre
business. This new controversy is now before the Income Tax Appellate Tribunal for
adjudication and ruling. It appears from latest media reports that the Indian government will look
at conciliation route in respect of indirect transfer dispute (Hutch Essar deal) once the Tax
Tribunal has given its ruling on the latest transfer pricing related dispute.

4.4 Vodafone wins $490 million tax dispute in Bombay High Court
May 20, 2014 The Bombay High Court ruled in favour of Vodafone (VOD.L) on Friday in a
long-running dispute with the Indian taxman, a boost for the British telecoms group whose tax
battles have been seen as emblematic of the troubles facing foreign investors in India.
Vodafone, the biggest foreign corporate investor in India, has been caught in a string of tax
disputes since it entered the country seven years ago, hoping to tap the world's second-biggest
mobile phone market by customer numbers.Vodafone's treatment, seen by many investors as
heavy-handed, has fuelled debate over India's unpredictable rules and regulations.
In the case decided on Friday, India's tax office had accused Vodafone India Services Private Ltd
- a unit of the group - of under-pricing shares in a rights issue to its parent, and had demanded
tax of about 30 billion rupees ($490 million).
The tax demand was for two financial years to March 2011, Vodafone said.
"Vodafone has maintained consistently throughout the legal proceedings that this transaction was
not taxable," the company said in a statement welcoming the ruling.
Transfer pricing is the value at which companies trade products, services or assets between units
in different countries - a regular part of doing business for a multinational, but a practice which
tax authorities often feel can be exploited.
Rules require all cross-border transactions between group companies to be valued at arm's length
- or as if the transaction was with an unrelated company.
Several other multinational including IBM Corp (IBM.N), Royal Dutch Shell Plc (RDSa.L) and
Nokia Oyj (NOK1V.HE) are also fighting transfer-pricing cases in India. Tax claims on foreign
firms in the past year has been a major concern for investors.
"The decision will set to rest a lot of controversies and would go a long way in encouraging
foreign investments," S.P. Singh, a senior director at Deloitte Haskins and Sells, said after the
court ruling.
Separately, Vodafone is contesting a more than $2 billion tax demand over its acquisition of
Indian mobile operations in 2007 from Hutchison Whampoa (0013.HK).
The lure of India's growing market, however, has continued to attract Vodafone. This year it
spent $1.7 billion to fully own its main Indian unit, Vodafone India Ltd, which is the nation's
No.2 mobile phone carrier. Vodafone India bought radio airwaves worth more than $3 billion in
a government auction in February to beef up services.($1 = 61.2400 rupees)

PART-5
5.1 Financial projections of Vodafone
Income statement
Profit & Loss statement
Profit & Loss
Year Ended 31 March 2014 2013 2012 2011 2010
£ millions
Turnover 38346.0 38041.0 46417.0 45884.0 44472.0
Operating Profit -4191.0 -2777.0 6224.0 537.0 4738.0
Net Interest -1208.0 -1291.0 -1476.0 880.0 -796.0
Profit Before Tax -5270.0 -3483.0 9549.0 9498.0 8674.0
Profit After Tax 11312.0 -3959.0 7003.0 7870.0 8618.0
Total Dividend n/a n/a n/a n/a n/a
Retained Profit / Loss n/a n/a n/a n/a n/a
Key Figures
Year Ended 31 March 2014 2013 2012 2011 2010
Earnings Per Share Basic (p) 42.10 -15.66 13.74 15.20 16.44
Earnings Per Share Diluted (p) 41.77 -15.66 13.65 15.11 16.36

Earnings Per Share Adjusted (p) 17.54 20.12 14.91 16.75 16.11
Earnings Per Share Growth (%) -13 35 -11 4 -6
Total Dividend (p) 11.00 10.19 9.52 8.90 8.31
Operating Margin (%) -11 -7 13 8 11
ROCE (%) -7 -2 19 15 16
Dividend Cover 1.59 1.97 1.57 1.88 1.94
Dividend Yield 5.00 5.20 5.30 4.80 5.20
Price / Earnings Ratio 12.60 9.70 12.00 11.00 9.80
Dividend Per Share Growth (%) 8 7 7 7 7
Balance sheet of Vodafone

Financial ratio analysis
Vodafone Group‟s financial performances are analyzed by utilizing the liquidity, profitability
and debt management ratios, compared to the industry norm cited from Hoover‟s, Strategic
Analytics, and Ycharts.
Liquidity ratio
 Current ratio
Current assets normally are comprised of cash, accounts receivable, inventories, and marketable
securities. Current liabilities include accounts payable, short-term notes payable, current portion
of long-term debt, accrued taxes, wage, and other accrued expenses. The current ratio indicates
“the extent to which current liabilities are covered by those assets expected to be converted to
cash in the near future”. The current ratio is calculated by dividing current assets by current
liabilities. A current ratio of one means that book value of current assets is exactly the same as
book value of current liabilities. In general, investors look for a company with a current ratio of
2:1, meaning current assets twice as large as current liabilities. A current ratio less than one
indicates the company might have problems meeting short-term financial obligations. If the ratio
is too high, the company may not be efficiently using its current assets or short term financing
facilities.
Account 31 March 2014 31 March 2013 31 March 2012 31 March 2011 31 March 2010
Current assets 24,722.00m 21,649.00m 20,025.00m 17,003.00m 14,219.00m
Current
liabilities
25,039.00m 28,369.00m 24,025.00m 27,075.00m 28,616.00m
Current Ratio 0.98 0.76 0.83 0.62 0.49
Graph of Current Assets & Current Liabilities
14,219.00
17,003.00
28,616.00
27,075.00
0.00
5,000.00
10,000.00
15,000.00
20,000.00
25,000.00
30,000.00
35,000.00
31/3/2010 31/3/2011
Liquidity ratio
 Current ratio
facilities.
Current
liabilities
25,039.00m 28,369.00m 24,025.00m 27,075.00m 28,616.00m
Current Ratio 0.98 0.76 0.83 0.62 0.49
17,003.00
20,025.00
21,649.00
24,722.00
27,075.00
24,025.00
28,369.00
25,039.00
31/3/2011 31/3/2012 31/3/2013 31/3/2014
current assets
current liabilites
Linear (current assets)
Linear (current liabilites)
Liquidity ratio
 Current ratio
facilities.
Current
liabilities
25,039.00m 28,369.00m 24,025.00m 27,075.00m 28,616.00m
Current Ratio 0.98 0.76 0.83 0.62 0.49
24,722.00
current assets
current liabilites
Linear (current assets)
Linear (current liabilites)

Profitability ratio
 EBITDA margin ratio
EBITDA, Earnings before Interest, Taxes, Depreciation and Amortization, to sales ratio is a
measure of cash flows from the entity‟s operations. A robust network infrastructure is a source
of competitive advantages for mobile communications companies but they generally report large
losses due to hugely spending capital expenditures to construct the network infrastructure.
EBITDA enables the companies to discuss their profitability of core business operations while
deducting the huge amount of interest, taxes, and capital expenses. EBITDA margin ratios are
stable but relatively lower than the industry norm due to the impact of business acquisitions and
disposals, and foreign exchange associated with its global expansion.
Revenue 38,346.00m 38,041.00m 46,417.00m 45,884.00m 44,472.00m
EBITDA 12,831.00m 13,566.00m 14,606.00m 14,670.00m 14,735.00m
EBITDA Margin 33.4% 35.6% 31.4% 31.9% 33.1%
Graph of Revenue
Return on Common Equity (ROE) ratio
Return on equity (ROE) measures the rate of return on the money invested by common stock
owners and retained by the company thanks to previous profitable years. It demonstrates a
company's ability to generate profits from shareholders' equity (also known as net assets or assets
Minusliabilities).
44472
45884
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
31/3/2010 31/3/2011
Profitability ratio
Revenue 38,346.00m 38,041.00m 46,417.00m 45,884.00m 44,472.00m
EBITDA 12,831.00m 13,566.00m 14,606.00m 14,670.00m 14,735.00m
EBITDA Margin 33.4% 35.6% 31.4% 31.9% 33.1%
Graph of Revenue
Minusliabilities).
45884 46417
38041 38346
31/3/2011 31/3/2012 31/3/2013 31/3/2014
Revenue
Revenue
Linear (Revenue)
Profitability ratio
Revenue 38,346.00m 38,041.00m 46,417.00m 45,884.00m 44,472.00m
EBITDA 12,831.00m 13,566.00m 14,606.00m 14,670.00m 14,735.00m
EBITDA Margin 33.4% 35.6% 31.4% 31.9% 33.1%
Graph of Revenue
Minusliabilities).
Revenue
Linear (Revenue)

ROE shows how well a company uses investment funds to generate growth. Return on equity is
useful for comparing the profitability of companies within a sector or industry. Investors
generally are interested in company's that have high, increasing returns on equity.
Revenue 38,346.00m 38,041.00m 46,417.00m 45,884.00m 44,472.00m
Net income 11.15B 4.20B 6.96B 7.97B 8.65B
Total Assets 121,840.00m 138,324.00m 139,576.00m 151,220.00m 156,985.0m
Total Equity 71,781.00m 72,488.00m 78,202.00m 87,561.00m 90,810.00m
ROE 76.38% 0.53% 8.82% 8.74% 10.02%
Graph of Net Income
8.65
7.97
0
2
4
6
8
10
12
31/3/2010 31/3/2011
Revenue 38,346.00m 38,041.00m 46,417.00m 45,884.00m 44,472.00m
Net income 11.15B 4.20B 6.96B 7.97B 8.65B
ROE 76.38% 0.53% 8.82% 8.74% 10.02%
Graph of Net Income
7.97
6.96
4.2
11.15
31/3/2011 31/3/2012 31/3/2013 31/3/2014
Net income
Revenue 38,346.00m 38,041.00m 46,417.00m 45,884.00m 44,472.00m
Net income 11.15B 4.20B 6.96B 7.97B 8.65B
ROE 76.38% 0.53% 8.82% 8.74% 10.02%
Graph of Net Income
Net income

Debt management ratio
The debt ratio measures the percentage of funds provided by noncurrent liabilities and equit
Ehrhardt and Brigham (2009) argued that “creditors prefer low debt ratios because the lower the
ratio, the greater the cushion against creditors‟ losses in the event of liquidation”, and
“stockholders, on the other hand, may want more leverage because it magnifies expected
earnings” .
Leverage ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's
assets. A low debt to equity ratio indicates lower risk, because debt holders have less claims on
the company's assets. A debt to equity ratio of 5 means that debt holders have a 5 times more
claim on assets than equity holders.
A high debt to equity ratio usually means that a company has been aggressive in financing
growth with debt and often results in volatile earnings.
It is also known as Debt/Equity Ratio, Debt-Equity Ratio, and D/E Ratio.
Formula Debt to Equity = (Long Term Debt + Current Portion of Long Term Debt) / Total
Shareholders' Equity
Mar10 Mar11 Mar12 Mar13 Mar14
deb2equity .48 .44 .44 .43 .56
Price to Earnings Ratio
The price to earnings ratio (PE Ratio) is the measure of the share price relative to the annual net
income earned by the firm per share. PE ratio shows current investor demand for a company
share. A high PE ratio generally indicates increased demand because investors anticipate
earnings growth in the future. The PE ratio has units of years, which can be interpreted as the
number of years of earnings to pay back purchase price.
PE ratio is often referred to as the "multiple" because it demonstrates how much an investor is
willing to pay for one dollar of earnings. PE Ratios are sometimes calculated using estimations
of next year's earnings per share in the denominator. When this happens, it is usually noted.
Price to Earnings Ratio = Price / Earnings Per Share (EPS)
Mar10 Mar11 Mar12 Mar13 Mar14
PE 6.32 7.95 8.63 155.20 .99

5.2 overall evaluation of strategies
Vodafone emerging markets are performing well, although vodafone mature European markets
continue to face challenging conditions. However, company have continued to make good
progress in delivering long-term strategy, by building firm foundations for the future with
substantial investments in Vodafone Red, Project Spring and unified communications. It has
been a year of substantial strategic progress. The sale of Verizon Wireless stake has rewarded
shareholders for their support, and enabled the acceleration of strategy through the acquisition of
Kabel Deutschland, the pending acquisition of Ono and our Project Spring investment
programme. Vodafone operational performance has been mixed. The Group’s emerging markets
businesses have performed strongly throughout the year: company executed their strategy well
and have successfully positioned themselves for the rapid growth in data. In Europe, they are
continue to face competitive, regulatory and macroeconomic pressures, but they have taken
steps to improve their commercial performance, particularly in Germany and Italy, and are
beginning to see encouraging early signs.
 Verizon Wireless transaction
The sale of vodafone 45% interest in Verizon Wireless, the leading mobile operator in the United
States, was the culmination of a highly successful 14 year investment which began when Verizon
and Vodafone entered
into a partnership to create Verizon Wireless in 2000.They had been very happy to stay invested
in the business over the years, despite their minority position, because of the strong growth and
returns generated, and the attractiveness of the US market. However, the Board viewed the offer
of US$130 billion as a very attractive price at which to exit. The completion of the transaction
enabled company to return a record US$85 billion to shareholders, while retaining ample
financial flexibility to pursue our own strategy both organically and through targeted
acquisitions.
 Strategic progress
vodafone had made very substantial progress on their strategy in the past year, despite the
significant challenges faced in Europe. With the acquisition of Kabel Deutschland in Germany
and the planned purchase of Ono in Spain, their continued fibre build in Portugal and Spain, and
their fibre plans in Italy, allied to last year’s acquisition of Cable & Wireless Worldwide in the
UK, they are becoming a leader in unified communications across Europe. This enables them to
access a large and growing fixed revenue pool where their market share is currently much lower
than in mobile, while also helping company defend mobile business from converged offers.They
are continue to provide a market-leading network experience in most of our markets, and now
have 4.7 million 4G customers across 14 countries – all major European markets, as well as
South Africa, Australia and New Zealand. Early experience from 4G shows us that customers
use roughly twice as much data compared to 3G data usage, driven principally by video
streaming.
Vodafone aim to be five years from now
 Project Spring
Project Spring is our organic investment programme which will allow us to accelerate and extend
our strategic priorities through investment in mobile and fixed networks, products and services,

and our retail platform. Announced alongside the Verizon transaction in September 2013, Project
Spring will strengthen further our network and service differentiation. The transition to 4G and
unified communications, coupled with an improved economic outlook for Europe, lead us to
believe Vodafone has a unique opportunity to invest now. We expect total investments, including
Project Spring, to be around £19 billion over the next two years. The main elements of our
investment are:
 4G in Europe: we aim to reach 91% population coverage by March 2016.
 3G in emerging markets: with 95% population coverage in targeted urban areas in India
by March 2016.
 Next-generation fixed line infrastructure: laying fibre to more base stations and deep
into residential areas across Europe and in selected emerging market urban areas.
 Development of enterprise products and services: Extending our M2M reach to 75
countries and rolling out hosting and IP-VPN services internationally; and investment in
our retail estate: modernising 8,000 of our stores to improve the customer experience.
5.3 Monitoring & Control
The Monitoring and Controlling process oversees all the tasks and metrics necessary to ensure
that the approved and authorized project is within scope, on time, and on budget so that the
project proceeds with minimal risk. This process involves comparing actual performance with
planned performance and taking corrective action to yield the desired outcome when significant
differences exist. Monitoring and Controlling process is continuously performed throughout the
life of the project.
Financial and accounting sector: - The financial management information system has
become an integral part of every small and big business companies. FMIS helps to compile
all the account related information from the different departments of the company including
the operations, sales and marketing, HR and makes it available in an easy format to the chief
financial officer. The CFO then analysis the profit and losses of the company, past and
present financial transactions made by the company and also uses it to control and monitor
the available funds for the right purpose.Vodafone Essar’s financial department uses the most
competent SAP system to manage the accounts and compile the information in a fast and
easy way.
 SAP- Initially the full form was “System analyse und programmentwicklung” in
German language. It is actually System analysis and programme development.
System working and benefits-
 General ledger- this system automatically makes an entry of all the transactions in the
general ledger. It also side by side updates this information in the specific accounts like
trade receivables, trade payables, personal, sales, inventory, etc and these all accounts
together make the “chart of accounts”. Hence the system helps in keeping a permanent
record of the accounts.
 Cash management- helps in balancing the cash inflow and outflow. Highlights the area
where cash is used up like in buying high cost raw materials, inventory expenses, etc.

Depending on the company’s expenses it can regulate the price at which Vodafone sells its
sim cards, internet services and also helps deciding the roaming charges, call charges,
message schemes, plans, etc.
 Budget planning- modifies the financial ratios to help predict the future scenarios and also
in setting the financial goals for the company.
 Financial reporting- the system not only uploads the transactions directly in the general
ledger but it also makes financial statements used for internal reports and share holder use.
Compliance with the government regulations, accounting standards and auditing
requirements are also made easy.
 Reduced finance costs and workload- initially before the invention of computers
accounts were maintained in account books and were written manually. To reduce this
tedious work computers came into the market but did not possess an advanced
technology to maintain complex accounts. Later came, the SAP system which not only
could manage the various accounts but also could automatically upload any transactions
occurring in every account. This reduced the time and cost of writing and managing
accounts. In global companies like Vodafone which extends its branches all over the
world SAP system serves as a boon for managing the finances.
 Other benefits- making trial balance reports, profit and loss reports, balance sheet,
generating bills according to the customer chosen schemes and plans, etc.
Operations support system (OSS) and Business support system (BSS)
Vodafone and many other telecommunication companies use these systems mainly to manage
the billing procedure which were done manually many decades ago. These systems mainly help
in managing networking components, provisioning services and for billing in the accounting
sector.
Telecommunications billing is the process of adding together rated calls or services for a certain
user or group of users, applying discounts and preparing the data for invoicing.
 OSS in processing CDR- Call detail record (CDR) or Station message detail recording
(SMDR) is a file containing all the necessary information regarding the time of call, origin
of the call, call duration, call charge, total usage time in the billing period and the free
minutes left in the billing period. If Vodafone is providing some of its customers with
itemized bills then CDR will show up in each bill in a format similar to the long distance
itemized bill generated by a conventional telecom company. In a telephone exchange, a
CDR contains information about all the calls passing through the exchange. The CDRs are
generated by Automatic Message Accounting (AMA) and processed by the operations
support system (OSS). With the help OSS the CDR, RAP and TAP data into simple binary
encoded data into XML or ASCII. (Refer appendix 2.0).
 AMDOCS- Amdocs is a global company which provides Vodafone with its billing
solutions through the OSS and BSS. The company leads in providing customer
relationship management software but also plays an important role in providing financial
solutions. The various features provided by the company are-

 Convergent billing system-The system assists Vodafone service providers with
appropriate charging and billing system. By this system provided by Amdocs, the
hardware and software costs were reduced by 70% and comparison and combination of
prepaid and postpaid services was possible.
 Invoicing- The system has the capabilities of operating multiple currency bills, managing
scheduled as well as on- demand bills, combines prepaid and postpaid bill and also
includes discounts and charges in a billing cycle.
 Accounts receivable- The system integrates a third party general ledger and enables
automatic accounting processes according to the standards and policies. Also manages
customer account’s balance by performing every transactions like fund transfer,
adjustments, back outs and other financial activities.
SAS- Statistical Analysis Software Financial Intelligence
This software is mainly used to generate financial reports at a faster rate, in forecasting the future
scenario, risk management and simulation problems are also tackled well by this system. SAS
Financial Intelligence components help in increasing the profit margins and further assist in
improving the accuracy of the financial reports and balance sheets. There are 4 components of
SAS Financial Intelligence are:-
 SAS Activity- based management- mainly helps by identifying the capital consuming
areas and capital generating areas and helps in making decisions that streamline processes.
 SAS Financial management-budgeting and planning is done by this system. Assist in
making several reports, financial statements and handling various accounts.
 SAS Profitability management- provides solutions to increasing profits.
 SAS Strategy management- helps the company gain focus on the main goals and to
remove the flawed strategies which may prove to be very expensive for the company.
 SAS Financial Management- the system is very useful in going through the accounts of
the company in no time and making future predictions for further business deals.
Processes and generates financial reports very quickly, communicates the planning
strategies, budgets, annual reports among various departments of the company making the
work easier at every business level. The system also generates reports according to the
guidelines mentioned in the IFRS (International Financial Reporting Standards) and sends
a copy of the report to GAAP (Generally Accepted Accounting Principles) and IFRS and
so there is no need to re check the validation of the reports.

PART-6
6.1 Vodafone customer base
Britain-based Vodafone is the second largest mobile service provider on the planet after China
Mobile. The company has about 435 million subscribers in 26 countries around the world.
Recently, Vodafone reported group revenue of £10.2 billion ($17.3 billion) after the quarter that
ended in June 2014. While this was up 6.2% on an absolute basis year-on-year given the strong
pound currency, it was down 4.4% on organic basis. Organic revenue measures comparable
performance, therefore excludes any M&A activity and fluctuation in foreign exchange rates.
The company did not disclose profit figures in its most recent financial report but it had a net
profit of £4.6 billion ($7.8 billion) at the end of financial year 2013-14. This excluded the money
it made from selling the Verizon Wireless stake in US. Vodafone provides cellular network voice
and data services in the following countries – Germany, Italy, United Kingdom, Spain,
Netherlands, Ireland, Portugal, Romania, Greece, Czech Republic, Hungary, Albania, Malta,
India, Turkey, Australia, Egypt, New Zealand, Qatar, Ghana, South Africa, Tanzania, Congo,
Mozambique, Lesotho and Kenya. Some of their operations in these countries are through joint
ventures. Vodafone also runs fixed home, enterprise and cable networks in a few regions and
these operations form about 15% of the group’s revenue. Despite having big presence across
various regions, Vodafone has faced multiple challenges in the past few years.
Vodafone’s customer base of 435 million in various parts of world is its biggest asset. It is either
the market leader or is among the top 3 service providers in every country. Such strong position
often implies financial leverage, larger capacity to absorb risks and greater capability to steer the
market direction.
Geographically diversified business – Looking closely at the countries listed above, it is easy to
conclude that Vodafone has a presence in all kinds of mobile markets. Developed markets like
Germany and UK bring bulk of revenue. Then there are markets like India that have immense
growth potential both in voice and data. So declining business in one region can be compensated
by growth in another.
Developed and advanced network – While not necessarily the trailblazer of LTE network launch
in its areas of operation, Vodafone deployed LTE and high-speed wireless networks in most of
its markets within a few years of spectrum allocation or ecosystem stabilization. In 2010,
Vodafone had LTE running in Germany for the first time. Within the next 2 years, they followed
it up by launching LTE in Portugal, Romania, Spain, UK, Australia, South Africa and many
other nations. Networks in India, Egypt and Turkey are also in the process of upgradation.
Similarly, in the first half of the last decade, the operator was aggressive in providing 3G
services. The overall perception of Vodafone’s wireless network is positive in most countries.
Strong brand recognition – Aggressive strategy, creative advertising, decent customer service
and employee-friendly policies have helped Vodafone in cementing its place among the better

brands of the world. This makes it easy for them to win new customers and retain the existing
base.
Number of Vodafone mobile customers in 2014, by country/market (in millions)
0
20
40
60
80
100
120
140
160
180
mobile customers in millions
base.
base.

We have made a Map highlighted with letters/colors of respective operator who topped the
highest GSM subscriber base in respective circle – PAN INDIA as of May 2014.
Bharti Airtel has the highest number of GSM subscribers in 12 circles, followed by Vodafone 5
circles, Idea Cellular 4 circles and Aircel 2 Circles.

6.2 Impact of Mobile number portability (MNP) on Vodafone
Idea cellular emerged as the top most gainer of subscribers from mobile number portability
(MNP), showing a net gain of around 95 lakh customers till June 30.The data shared in the Lok
Sabha by Telecom Minister Ravi Shankar Prasad showed that Reliance Communications is the
biggest net loser of mobile subscribers through MNP."The reason for port out (leaving network
of a company)/ port in (joining network of a company) may be as...non satisfaction of the
subscribers from their existing mobile operator, expectation of getting better services from
recipient mobile operator," Prasad said in a statement.
 Till June 30, 2014, over 1.51 crore mobile subscribers switched from Idea Cellular to other
telecom operators; however, about 2.46 crore subscribers joined the company's network
through the MNP, resulting in a net gain of around 95 lakh customers.
 In case of RCom, over 1.4 crore subscribers left its network and only about 79.4 lakh
subscribers joined through the MNP facility, showing a net loss of about 61.5 lakh customers
till June 30.
 As per data, only three companies -- Idea, Vodafone and Airtel have gained net subscribers
from the MNP facility, while other companies have been on the losing side.
 Vodafone lost the maximum over 1.96 crore customers through the MNP, while it gained
over 2.71 crore subscribers, more than any other operators.
 However, Vodafone found place at the second spot after Idea with a net gain of over 74.65
lakh customers.
 Airtel's net gain of subscribers stood at over 36.35 lakh.
 State-run telecom firms BSNL and MTNL saw a net loss of over 15.54 lakh and 2.13 lakh
customers respectively.
 Net subscriber loss of Aircel stood at over 23.16 lakh, Videocon 4.48 lakh, Sistema Shyam
(MTS) 3.82 lakh, Tata Teleservices 45.45 lakh and Telewings (Uninor) 33 lakh.

 Over 10.25 crore out of about 91 crore mobile subscribers used MNP facility till June 30,
according to the data shared by the minister.
 Poor customer service is the main reason cited by customers for switching from one network
to the other. 43% of the customers analyzed indicates that they switch mainly because of
poor customer service. This includes delayed and sometimes no response from customer care
executives.
 Customer Service followed by Quality of Service and Value for money are the top three
reasons why customers leave a service provider.
6.3Telecom subscriber base edges past 915 million; Vodafone key gainer
The number of telecom subscribers rose marginally to 91.5 crores in December 2013 over the previous
month, the regulator Trai said on Monday."The number of telephone subscribers in India increased from
910.14 million (91.01 crores) at the end of November, 2013, to 915.19 million (91.5 crores) at the end of
December 2013," the Telecom RegulatoryAuthorityof Indiasaid.
 Mobile subscriber base grew marginally to 88.63 crores while fixed line connections continued to
declineto 2.88 crores at December end.
 Vodafone was the major gainer during the month by adding 23 lakh new customers to its network. Its
total userbase was about 16 crores at December end, the Trai data showed.
 Market leader Bharti Airtel added about 18 lakh customers in the month to take its user base to 19.84
crores.
 On the other hand, state-run BSNLsaw a decline of 20 lakh in its user base, followed
byTataTeleservices (76,256 users) and Loop Mobile by (25,152 users).
 Videocon, which has operations in four circles registered the highest growth rate of 8.15 percent in
subscribers. It expanded user baseby3.5 lakh.
 Among other operators, Aircel added 16 lakh subscribers, whileUninor added 4.1 lakh
users. Idea Cellular added 2.7 lakh, RelianceCommunications 2.2 lakh, Sistema Shyam (MTS) 2.1
lakh and MTNLadded 10,000 new customers.
 While BSNLdominated fixed line broadband segment with 99 lakh customers, Bharti Airtel led
wireless broadband market with 94.9 lakh customers.
6.4 BTS accumulated down time
non availability
of network in a
month in %age
Accessibility
%age of
successful calls
Call drop
rate:%age of
calls getting
disconnected
due to network
problem
%age of calls
with good voice
quality
country
1.72 99.33 0.80 97.11 India
1.2 - 1.8 - America

6.5 Board of Directors
Name Age Since Current Position
Gerard Kleisterlee 67 2011 Non-Executive Chairman of the Board
Vittorio Colao 52 2008 Chief Executive, Executive Director
Nicholas Read 48 2014 Chief Financial Officer, Director
Paolo Bertoluzzo 47 2012 Chief Executive Officer, Southern Europe
Philipp Humm 54 2012 Chief Executive Officer, Northern & Central Europe
Serpil Timuray 44 2014 Chief Executive, Africa, Middle East and Asia-Pacific
Stephen Pusey 52 2009 Chief Technology Officer, Executive Director
Rosemary Martin 54 2010 Group General Counsel, Company Secretary
Ronald Schellekens 50 2009 Group Human Resources Director
Warren Finegold 57 2009 Group Strategy and Business Development Director
Nicholas Jeffery 41 2013 Group Enterprise Director
Matthew Kirk 52 2009 Group External Affairs Director
Crispin Davis 2014 Non-Executive Director
Clara Furse 57 2014 Non-Executive Director
Valerie Gooding 62 2014 Non-Executive Director
Renee James 49 2011 Non-Executive Independent Director
Samuel Jonah 2009 Non-Executive Independent Director
Omid Kordestani 49 2013 Non-Executive Independent Director
Nick Land 66 2006 Non-Executive Independent Director
Luc Vandevelde 63 2012 Senior Non-Executive Independent Director
Philip Yea 2005 Non-Executive Independent Director
Anthony Hamilton Senior Manager - Investor Relations
6.6 BIOGRAPHIES

Name
Description
Gerard Kleisterlee Mr. Gerard J. Kleisterlee is Non-Executive Chairman of the Board of
Vodafone Group Plc. Gerard Kleisterlee, aged 67, became Chairman of
Vodafone Group Plc on 26 July 2011 at the conclusion of the AGM,
having previously served as a non-executive member of the Board. He
retired as President/Chief Executive Officer and Chairman of the Board of
Management and the Group Management Committee of Koninklijke
Philips Electronics N.V. (‘Philips’) on 31 March 2011 after a career with
Philips spanning three decades. He has been a member of the Daimler AG
Supervisory Board since April 2009, a non-executive director of the
Supervisory Board and member of the Audit Committee .
Vittorio Colao Mr. Vittorio Colao is Chief Executive, Executive Director of Vodafone
Group Plc. Vittorio Colao, Chief Executive, aged 52, was appointed Chief
Executive of Vodafone Group Plc after the AGM on 29 July 2008. He
joined the Board in October 2006 as Chief Executive, Europe and Deputy
Chief Executive. The early part of his career was spent in the Milan office
of McKinsey & Company working on media, telecommunications and
industrial goods, with additional responsibility for recruitment. In 1996 he
joined Omnitel Pronto Italia, which subsequently became Vodafone Italy,
and he was appointed Chief Executive in 1999. He was then appointed
regional Chief Executive Officer, Southern Europe for Vodafone Group
Plc in 2001, became a member of the Board in 2002 and was appointed to
the role of Regional Chief Executive Officer for Southern Europe, Middle
East and Africa for Vodafone in 2003. In 2004 he left Vodafone to join
RCS MediaGroup, the leading Italian publishing company, where he was
Chief Executive until he rejoined Vodafone as CEO, Europe. He sits on
the International Advisory Board of Bocconi University, Italy and is a
Member of the Steering Committee of the European Round Table of
Industrialists.
Nicholas Read Mr. Nicholas Jonathan Read has been appointed as Chief Financial
Officer, Director of Vodafone Group Plc., effective April 1, 2014. He has
been appointed as Chief Financial Officer - Designate of the Company
effective January 1, 2014 until April 1, 2014. He was appointed to the
position of Chief Executive Officer, Asia Pacific and Middle East Region
and joined the Executive Committee in November 2008. His role was

then expanded to include Africa in October 2010. Nick joined Vodafone
in 2001 and has held a variety of senior roles including Chief Financial
Officer and Chief Commercial Officer of Vodafone Limited, the UK
operating company, and was appointed Chief Executive Officer of
Vodafone Limited in early 2006. Prior to joining Vodafone, he held
senior global finance positions with United Business Media plc and
Federal Express Worldwide.
Paolo Bertoluzzo Mr. Paolo Bertoluzzo has been appointed as Chief Executive Officer,
Southern Europe of Vodafone Group Plc., effective August 1, 2012.
Paolo Bertoluzzo, aged 47, Group Chief Commercial and Operations
Officer, was appointed to the Executive Committee with effect from 1
August 2012, when he became Chief Executive Officer, Southern Europe.
He became Chief Executive Officer of Vodafone Italy in 2008, a role he
continues to hold. He has also been a member of the Board of Vodafone
Italy since 2006. He joined Vodafone in 1999, and held the post of Chief
Commercial Officer (2007), Chief Operating Officer (2006), and led the
Consumer Division of Vodafone Italy (2005). He was a member of the
Board of Vodacom from January 2010 to September 2012 and served as a
Board member of Vodafone Ireland between November 2005 and
February 2007. Paolo is Deputy Chairman of Asstel, the trade association
representing the interests of telecommunications companies members of
Confindustria (the Confederation of Italian Industry), and sits on the
Board of Confindustria Digitale, the industrial federation promoting
digital economy in Italy. After graduating in 1990 in Management
Engineering from the Politecnico di Milano, he obtained an MBA from
INSEAD at Fontainbleau in France in 1994 and began his career in
management consulting, working in Italy and the United States.
Philipp Humm Mr. Philipp Humm has been appointed as Chief Executive Officer,
Northern & Central Europe of Vodafone Group Plc., effective October 1,
2012. Philipp Humm, aged 54, Regional CEO Europe, joined Vodafone
as Chief Executive Officer, Northern and Central Europe and was
appointed to the Executive Committee with effect from 1 October 2012.
Before taking up this role, he was President and CEO of T-Mobile USA.
Previously, he was Chief Regional Officer Europe and a member of the
Executive Committee of T-Mobile International and prior to that, CEO
and Chief Sales Officer for T-Mobile Germany. His past experience
includes time with McKinsey & Company; the German grocery retailer,

Tengelmann, where he became CEO of Plus, their food discounter; and
Amazon, where he held roles as Managing Director of Amazon Germany
and France and Vice President Europe. He began his career at Procter &
Gamble.
Serpil Timuray Ms. Serpil Timuray has been appointed as Chief Executive, Africa,
Middle East and Asia-Pacific of Vodafone Group PLC., effective January
1, 2014. She was appointed Chief Executive of Vodafone Turkey in 2009.
She was appointed as a Director on the Board of Vodacom Group in
South Africa in September 2012. Previously General Manager with
Danone Turkey, Serpil Timuray began her career with Procter and
Gamble. She will be succeeded as Vodafone Turkey Chief Executive by
Gokhan Ogut who is currently Vodafone Turkey Chief Commercial and
Operations Officer.
Stephen Pusey Mr. Stephen C. Pusey is Chief Technology Officer, Executive Director of
Vodafone Group Plc. He joined Vodafone in September 2006 and the
Board with effect from 1 June 2009. He is responsible for all aspects of
Vodafone’s networks, IT capability, research and development. Prior to
joining Vodafone, he held the positions of Executive Vice President and
President, Nortel EMEA, having joined Nortel in 1982, gaining a wealth
of international experience across both the wireline and wireless
industries and in business applications and solutions. Prior to Nortel, he
spent several years with British Telecom. Stephen is a graduate of the
Advanced Management Program at Harvard University.
Rosemary Martin Ms. Rosemary E. S. Martin is Group General Counsel, Company
Secretary of Vodafone Group Plc., since March 2010. She previously
served as CEO of the Practical Law Group, having previously spent 11
years with Reuters Group Plc in various company secretary and legal
roles, with the last five years as Group General Counsel and Company
Secretary. Before joining Reuters, she was a partner with Mayer, Brown,
Rowe & Maw. Rosemary was admitted as a solicitor in 1984 and holds a
degree in Philosophy and Literature and an MBA in Legal Practice. She is
a director of several UK institutions including the Legal Services Board
and the Institute of Chartered Accountants of England and Wales
Corporate Governance Committee. She is also a non-executive director of
HSBC Bank Plc (the European arm of HSBC Group), and a former

member of the Financial Services Authority’s Listing Group Advisory
Committee.
Ronald Schellekens Mr. Ronald Adrianus Wilhelmus Schellekens is Group Human Resources
Director of Vodafone Group Plc. Ronald Schellekens, aged 49, Group HR
Director, joined Vodafone and the Executive Committee in January 2009.
He is responsible for the Vodafone Human Resource Management
function, as well as Health & Safety and Vodafone's Property and Real
Estate. Prior to joining Vodafone, Ronald was Executive Vice President
Human Resources for Royal Dutch Shell Plc’s global downstream
business. Prior to working for Shell, he worked for PepsiCo for nine years
in various international, senior human resources roles, including
assignments in Switzerland, Spain, South Africa, the UK and Poland. In
his last role, he was responsible for the Europe, Middle East & Africa
region for PepsiCo Foods International. Prior to PepsiCo, he worked for
nine years for AT&T in Human Resources roles in the Netherlands and
Poland.
Warren Finegold Mr. Warren Finegold is Group Strategy and Business Development
Director of Vodafone Group Plc. Warren Finegold, aged 56, joined the
Executive Committee in April 2006 as Chief Executive, Global Business
Development with responsibility for mergers and acquisitions and
business development. He assumed his current posiiton in August 2009
when his role was expanded to include Group Strategy. He started his
career with Hill Samuel & Co. Limited as an Executive in the Corporate
Finance department, advising clients on mergers and acquisitions. He then
moved to Goldman Sachs International in 1986 where he held positions in
New York and London. Prior to joining Vodafone, he was a Managing
Director of UBS Investment Bank where he held a number of senior
positions, most recently as head of its technology team in Europe.
Nicholas Jeffery Mr. Nicholas Jeffery is Group Enterprise Director of Vodafone Group
PLC., since January 2013. Prior to this, he was Chief Executive of Cable
& Wireless Worldwide. Nick joined Vodafone in 2004 and was appointed
Chief Executive of Vodafone Global Enterprise in 2006. He began his
career with Cable & Wireless plc (Mercury Communications) in 1991 and
led the company’s UK and international markets business units.

Matthew Kirk Mr. Matthew Kirk is Group External Affairs Director of Vodafone Group
Plc. Matthew Kirk, aged 52, Group External Affairs Director, was
appointed to his current position and joined the Executive Committee in
March 2009. Matthew joined Vodafone in 2006 as Group Director of
External Relationships. Prior to that, he was a member of the British
Diplomatic Service for more than 20 years and before joining Vodafone
served as British Ambassador to Finland.
Crispin Davis Sir Crispin Henry Lamert Davis has been appointed as an Non-Executive
Director of the Company effective July 28, 2014. He was the Chief
Executive of Reed Elsevier plc from 1999 to 2009. He was previously
Chief Executive of Aegis Group plc and the Group Managing Director of
Guinness Group plc (now Diageo plc). Sir Crispin began his executive
career with Procter & Gamble, where he held a variety of senior
management roles including as President of the Company's North
American Food Business. In his non-executive career, Sir Crispin was the
Chairman of StarBev Consumer Industries B.V. from 2009 to 2012 and
was a Non-Executive Director on the Board of GlaxoSmithKline plc from
2003 to 2013, where he chaired the Remuneration Committee. Currently
an advisor to CVC Capital Partners, Sir Crispin was knighted in 2004 for
services to publishing and information. He is an Oxford University
Trustee and Member of the University Board.
Clara Furse Dame Clara H. F. Furse DBE, has been appointed as Non-Executive
Director of the Company effective September 1, 2014. Dame Clara was
the Chief Executive of the London Stock Exchange Group plc from 2001
to 2009. During her tenure, the London Stock Exchange trebled revenues,
quadrupled adjusted operating profit and quintupled earnings per share.
She was previously Group Chief Executive of Credit Lyonnais Rouse Ltd
and the Managing Director, Global Futures and Options at UBS AG,
where she led the business to sector-leading levels of profitability. Dame
Clara is a non-executive director on the board of Nomura Holdings Inc
and Amadeus Holdings IT SA. Her previous non-executive career
includes board appointments at Legal & General Group plc (2009 to
2013), Euroclear plc (2002 to 2009), Fortis (2006 to 2008) and LIFFE
Holdings plc (1991 to 1999). Dame Clara was appointed to the Financial
Policy Committee of the Bank of England in 2013. A graduate of the
London School of Economics, she was appointed a Dame Commander of

the Order of the British Empire in 2008.
Valerie Gooding Ms. Valerie F. Gooding has been appointed as Non-Executive Director of
the Company effective February 1, 2014. Val Gooding is Non-Executive
Chairman of Premier Farnell plc - a global leader in high service
distribution of technology products and solutions. She is lead non-
executive director at the Home Office, a non-executive director of the
Lawn Tennis Association and a Trustee of Historic Royal Palaces. Val
Gooding has formerly held a number of senior operational and strategic
roles in businesses with a reputation for high levels of customer service.
Val was CEO of BUPA during a ten year period of strong growth and
global expansion and held several senior roles at British Airways, serving
latterly as Director for Asia Pacific. She has been a non-executive director
of Standard Chartered Bank plc, the BBC, J. Sainsbury plc, Compass
Group plc, BAA plc and Cable and Wireless Communications plc. Val
was also a member of the Council of Warwick University, Chairman of
the Advisory Board of the Warwick Business School, and a Board
member of both the Confederation of British Industry and Association of
British Insurers. Val Gooding was awarded the CBE for services to
business in the 2002 New Year's Honours list.
Renee James Ms. Renee J. James is Non-Executive Independent Director of Vodafone
Group Plc., since January 1, 2011. She is President of Intel Corporation.
Renee was previously executive vice president and general manager of
the Software and Services Group for Intel Corporation where she was
responsible for the worldwide software and services P&Ls of Intel and its
subsidiaries as well as Intel wide software R&D. Renee is chairman of
McAfee and Wind River Systems, both of which are wholly owned
subsidiaries of Intel. Previously, Renee was senior vice president of
software and services for Intel. In this capacity, she was responsible for
overseeing all of Intel's development of software necessary to Intel's core
business of microprocessors and computing systems as well as the
software and services products. Prior to that, she was the director and
COO of Intel Online Services, Intel's datacenter business. Renee has
contributed to several key hardware and software/services development
efforts during her tenure at Intel. Renee also serves as an independent
director on the VMware Inc. Board of Directors and is a member of its
Audit Committee. She is also a member of the C200. Renee joined Intel
in 1988 and holds Bachelor's and Master's degrees from the University of

Oregon.
Samuel Jonah Sir. Samuel Esson Jonah KBE, OSG is Non-Executive Independent
Director of Vodafone Group Plc with effect from April 1, 2009. He is
Executive Chairman of Jonah Capital (Pty) Limited, an investment
holding company in South Africa and serves on the boards of various
public and private companies, including Range Resources Limited. He is
also Chairman of Metropolitan Insurance Group Limited. Sam is an
adviser to the Presidents of Nigeria and Togo and previously served as
advisor to the Presidents of South Africa and Ghana. Sam was a non-
executive director of the Standard Bank of South Africa from 2006-2012.
He previously worked for Ashanti Goldfields Company Limited,
becoming Chief Executive Officer in 1986, and was formerly Executive
President of AngloGold Ashanti Limited, a director of Lonmin Plc and a
member of the Advisory Council of the President of the African
Development Bank. An Honorary Knighthood was conferred on him by
Her Majesty the Queen in 2003 and in 2006 he was awarded Ghana’s
highest national award, the Companion of the Order of the Star.
Omid Kordestani Mr. Omid Kordestani has been appointed as Non-Executive Independent
Director of Vodafone Group Plc., effective March 1, 2013. He joined
Google in 1999 as the company’s 11th employee. Over the next 10 years,
he led Google's business operations from its inception to a business
generating over $20bn in revenues with over 12,000 employees. After
holding a number of senior executive positions at Google, he transitioned
from his operational role and is now a Senior Advisor to the Office of
CEO/Founders at Google. Omid’s career spans product management,
sales, business development and general management roles. From 1995-
1999, he was at Netscape Communications. As Vice President of
Business Development, he grew Netscape's website revenue from an
annual run-rate of $88 million to more than $200 million within 18
months. Omid started his career in Silicon Valley as a Product Marketing
Manager at HP, followed by senior roles at consumer electronic
innovators GO Corporation (smartphone operating system) and 3DO
(gaming platform). Omid is currently also pursuing his passion in
technology, science, medicine and education through investments and
advisory positions. He graduated in electrical engineering from San Jose
University and has a MBA from Stanford Business School, where he

served on the Graduate School of Business Advisory Board.
Nick Land Mr. Nick C. E. Land is Non-Executive Independent Director of Vodafone
Group Plc since December 1, 2006. Nick Land, aged 65, joined the Board
in 2006 and is Chairman of the Audit and Risk Committee. Solely for the
purposes of relevant legislation, he is the Board's appointed financial
expert on the Audit and Risk Committee. In June 2006 he retired as
Chairman of Ernst & Young LLP after a distinguished career spanning 36
years with the firm. He became an audit partner in 1978 and held a
number of management appointments before becoming Managing Partner
in 1992. He was appointed Chairman and joined the Global Executive
Board of Ernst & Young Global LLP in 1995. He is a non-executive
director of Alliance Boots GmbH, BBA Aviation plc and the Ashmore
Group plc, and was appointed as a non-executive director of the Financial
Reporting Council on 1 April 2011. He is an advisor to the board of SNR
Denton LLP, a member of the Advisory Board of Alsbridge plc,
Chairman of the Board of Trustees of Farnham Castle, and is a member of
the Finance and Audit Committees of the National Gallery. He is also
Chairman of the Board of Trustees of The Vodafone Foundation.
Luc Vandevelde Mr. Luc Vandevelde has been appointed as Senior Non-Executive
Independent Director of Vodafone Group Plc. Luc Vandevelde, aged 62,
joined the Board in September 2003 and became senior independent
director in July 2012. He is also Chairman of the Remuneration
Committee. He is a director of Société Générale and the Founder and
Managing Director of Change Capital Partners LLP, a private equity fund.
He was formerly Chairman of the Supervisory Board of Carrefour SA,
Chairman of Marks & Spencer Group p.l.c. and Chief Executive Officer
of Promodès, and has held senior European and international roles with
Kraft General Foods.
Philip Yea Mr. Philip E. Yea is Non-Executive Independent Director of Vodafone
Group Plc., since September 1, 2005. He has held a number of roles in the
private equity industry, most notably at 3i Group plc where he was Chief
Executive from 2004 until January 2009, and prior to 3i at Investcorp,
where his main focus was on the turnaround and performance of portfolio
investments. He is a former Finance Director of Diageo plc, the global
drinks group, where as Finance Director of Guinness PLC he was closely

involved in the creation of Diageo through Guinness's merger with
GrandMet in 1997. Philip holds a number of advisory roles, including to
HRH The Duke of York in his role as the UK's Special Representative for
International Trade & Investment, as well as to PricewaterhouseCoopers
in the UK and Bridges Ventures. He is also Chairman of the trustees of
the British Heart Foundation and an independent director and trustee on
the Board of the Francis Crick Institute. He has previously held non-
executive roles at HBOS. Manchester United and The Rose Partnership,
Executive Search

REFERENCES
Brigham, E. F., & Houston, J. F. (2009). Fundamentals of Finance Management, Concise
Edition(with Thomson One – Business School Edition). Florence, KY: South-Western
College
Publishing.Capon, N. (2009). Capon‟s marketing framework. London, UK: Wessex
Publishing.
Cellular News. (2009). Orange and Vodafone to Expand Network Sharing Partnership.
Retrieved
http://www.cellular-news.com/story/35351.php
EFM Software (2009). Case: Vodafone. Retrieved August , 2010 from
http://www.efmsoftware.nl/totalqualitymanagement/casesvodafone/?lang=en

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