Vodafone at a glance:
Vodafone Group public limited company (plc.) is the world-leading multinational telecommunication company headquartered in London, United Kingdom. It is turning global with operations in 31 countries and partner networks in other 40 countries. Vodafone is the world's largest mobile telecommunication network company, based on revenue of £44.5 billion in 2010 (Vodafone, 2010). Based on subscribers, it is the world's second largest mobile phone operator with approximately 347 million proportionate customers worldwide as of June 2010 (Verizon Wireless). It employed approximately 85,000 people world-wide during year 2010. Vodafone’s market capitalisation value is £94 billion as of February 2011, making it the third largest company on the London Stock Exchange (FTSE All-share Index ranking).
Major products and brands
Like other telecommunications giants, Vodafone Group plc. concentrates on complete communication solution and products, with a wide range of choices for different market segmentation, covering from handset devices, voice, message, and data to fixed lines services. Vodafone products can be categorized into 3 big segments: •Handheld devices: ranging from low-cost mobile phones to smart phones and exclusive branded phones •Data products: including Internet services, PC connectivity, roaming services, fixed landlines •Value-added services such as Vodafone applications (email, portal and back-up), Voda360 all-in-one solution, Vodafone Money Transfer. There is also Vodafone Global Enterprise (VGE) which provides business value-added solutions such as cloud-secured portal and unified global communication system. In addition, constant organic growth through joint venturing followed by M&A of various local telecommunications companies in different countries has enabled Vodafone’s sustainable growth and domination. Its subsidiaries include 45% share of Verizon Wireless, the largest mobile telecommunications company in the United States measured by subscribers (Verizon Wireless), Vodafone Australia, Germany, Ghana, Essar (India), Qatar, UK, and Vodacom…
Business that generates the most revenue
Figure 1: Vodafone Group's revenue percentage for fiscal year 2010 (Vodafone, 2010) Currently, as we can see in Figure 1, Voice and Messaging services are still the main source of revenue, contributing 67.1% and 11.5% respectively out of the total £44.5 billion revenue.
Figure 2: Some Key Performance Indicators of Vodafone in the last 3 years (Vodafone, 2010)
Figure 3 (Vodafone, 2010)
We can notice although the volume of traditional services (voice and messaging service) is increasing significantly in Figure 3, because of the continuous competition, strict regulation impose and rapid technology changes, the value-added income is reduced resulting in modest revenue growth. In fact, annually there is approximately 17% decrease in Vodafone’s voice rate, as shown in Figure 4.
Figure 4: Vodafone outgoing voice prices and minutes (%) (Vodafone, 2010)
Business that generates the most profit and will drive growth in the next decade Although traditional mobile services (voice and messages) are currently major revenue driver, the organization is well-aware that this used-to-be cash-cow is soon saturated and deadlocked with the mature and developed market region such as the US, EU… Currently the slight decline in revenue in key EU market due to the recession, tightened regulation and harsh competition is offset by increasing revenue in emerging markets such as Africa, APEC region especially India ( Zacks Investment Research, 2010).Figure 5 clearly shows that key markets of Vodafone such as Western, Eastern Europe and the Americas are mature and the growth should be now focused on emerging markets, namely India, China, APEC and Africa where the mobile penetration is still low and government policies are still shaping up.
Figure 5: Mobile...