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Business Additional Vodafone Group Plc
Overview review Performance Governance Financials information 21 Annual Report 2013

Where the industry

is heading

The pace of change in the mobile industry over the

last few years has been signiicant and is expected to
continue. We anticipate growing sources of revenue
from data services such as mobile internet usage; higher
penetration of smartphones and tablets; new users from
emerging markets; and major advancements in mobile
network technology to deliver faster and better customer
services. The demand for seamless converged ixed and
mobile solutions using high speed networks is expected
to accelerate.

According to industry analysts, data is expected European environment. We believe that Regulatory pressures
to continue to be the fastest growing segment this demand, combined with technological The industry is expecting to see continued
of the mobile industry. It is estimated that advances delivering easier connection downward revenue pressure from regulated
between 2012 and 2015 1 worldwide mobile of multiple data devices, will support strong cuts to termination rates, and voice and data
data revenue is set to grow by US$104 billion, growth in data-intensive applications over the roaming prices. European regulators are also
compared to a US$20 billion decline in voice next three to ive years, and that this will need seeking to encourage investment in high
revenue over the same period. The demand to be managed by access to next generation speed data services. However, the policies
for data is being driven by a widening range networks to support increased speed and to achieve this have not been conirmed
of powerful and attractive smartphones and capacity demands. by either European or national regulators and
tablets, signiicant improvements in mobile therefore the impact on the mobile sector
network capability, and an increased choice Faster mobile networks is dificult to judge.
of content and applications (‘apps’). Today’s mobile networks are typically
Most of the new demand for a combination of 2G networks for traditional
voice, text and basic data services, and 3G
mobile services will be from networks for fast mobile internet access Mobile service revenue by type
emerging markets and application downloads. The latest stage

Emerging markets, such as China, India and of mobile network development is superfast 2007 8% 92%
Africa, have the most potential for future 4G which is already in place in some countries 2012 25% 75%
revenue growth driven by rising populations, – providing maximum theoretical user
strong economic growth, lower mobile speeds of up to 150 Mbps today (with typical 2015 33% 67%
penetration and a lack of alternative ixed line user speeds up to 12 Mbps, compared with  Data  Voice, SMS and other
infrastructure. According to industry analysts, up to 6 Mbps on 3G).
1
by 2015 there will be 1.5 billion new mobile Mobile phone users by market
users across the globe, of which over 90% Technological innovation
will be from emerging markets. In contrast Alternative communication technologies, such 2007 60% 40%
the more mature markets in Europe are likely as instant messaging services, are increasingly
to exhibit modest growth, due to weaker GDP used by mobile consumers, particularly 2012 73% 27%
growth prospects, high mobile penetration in mature markets, such as Europe. These
and intense regulatory pressures. services use data, rather than traditional 2015 76% 24%
voice and text. This trend will continue and  Emerging markets  Mature markets
Convergence of ixed and mobile in response operators, such as Vodafone, have
into uniied communication services begun to replace per unit charges for voice Maximum mobile data Mbps
Converged ixed and mobile solutions (such and text services with unlimited bundles and downlink speeds
as combined mobile, ixed line, ixed broadband combine this with a ixed fee for data usage.
and TV) provide a range of beneits for the user, New applications for mobile services are being 2007 7.2
including simplicity, lexibility and cost savings. developed by the industry to extend the use
The demand for these services is already of mobile beyond everyday communication, 2012 43.2 150
established among enterprise customers such as mobile payments via a handset
and it is now becoming more visible in the or M2M services, including the location 2015 86.4 300
consumer market, in part due to consumers’ monitoring of vehicles, through a SIM card  3G  4G
needs to save money in a recessionary embedded in the vehicle. Note:
1 Refers to calendar year.