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					                                 Vodafone Group plc
        Analyst and Investor Conference Call
                    Q3 Interim Management Statement
                                     4 February 2010


Information in the following presentation relating to the price at which relevant investments have
been bought or sold in the past or the yield on such investments cannot be relied upon as a guide
to the future performance of such investments. This presentation does not constitute an offering
of securities or otherwise constitute an invitation or inducement to any person to underwrite,
subscribe for or otherwise acquire or dispose of securities in any company within the Group.

The presentation contains forward-looking statements which are subject to risks and uncertainties
because they relate to future events. These forward-looking statements include, without
limitation, statements in relation to the Group’s projected financial results of the 2010 financial
year. Some of the factors which may cause actual results to differ from these forward-looking
statements can be found by referring to the information contained on the final slide of the
presentation and under the heading “Other Information - Forward-looking Statements” in the Half-
Year Financial Report for the six months ended 30 September 2009 and “Principal Risk Factors
and Uncertainties” in our Annual Report for the year ended 31 March 2009. The Half-Year
Financial Report and Annual Report can be found on our website (

The presentation also contains certain non-GAAP financial information. The Group’s management
believes these measures provide valuable additional information in understanding the
performance of the Group or the Group’s businesses because they provide measures used by the
Group to assess performance. However, this additional information presented is not uniformly
defined by all companies, including those in the Group’s industry. Accordingly, it may not be
comparable with similarly titled measures and disclosures by other companies. Additionally,
although these measures are important in the management of the business, they should not be
viewed in isolation or as replacements for or alternatives to, but rather as complementary to, the
comparable GAAP measures.

Although we try to accurately reflect speeches delivered, the actual speech as it was delivered
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trademarks of their respective owners.
Vodafone Analyst and Investor Conference Call                                  IMS Q3 2009/10

                                      Vittorio Colao
                                 Chief Executive, Vodafone

Good morning and thank you all for joining this call to discuss Vodafone's Interim
Management Statement for Q3, ended last December. This time, I will run through my
overview of the quarter, the revenue trends for our three regions and share some
thoughts on our approach to data devices and networks. I will then hand over to Andy
Halford, who will discuss our larger country operations, cashflow and our updated
guidance, and, after that, as usual, we will be very happy to take your questions.

So, let me start on slide four and run through the financial highlights and look at any
trends for Q3. Group service revenue decreased by 1.2% on an organic basis to £10.7
billion. This is 1.8 percentage points better than the trend in Q2. Europe service revenue
decreased 3.2% to just over £7.2 billion. This is 1.4 points better than Q2. Africa and
Central Europe service revenue declined 0.5% to £2 billion, about 3.4 percentage points
better than Q2. Finally, Asia-Pacific and Middle East service revenue increased by 10.4%
to £1.6 billion, which is basically the same rate as last quarter.

What we have seen is improved revenue trends in each region, and I will cover these in a
little more detail in a moment. We also are seeing good growth in the two areas which are
central to our total communications strategy. Data revenue increased by 17.7%,
exceeding, for the first time, the £1 billion level, and fixed line revenue increased 10%.
Free cashflow was again strong at £1.8 billion, up 16% versus last year, and cumulative
free cashflow for the nine months was £5.8 billion, up 25% year-on-year. Our Q3
performance has given us the basis to upgrade the free cashflow guidance and refine the
adjusted operating profit guidance for the full year, as Andy will explain later.

So, turning to page five, I will now review Europe in a little more detail. In Europe, service
revenue trends were somewhat better than in the previous quarter, with the growth rate
improving by 1.4 percentage points in what I would define as a broadly similar competitive
and economic environment.

On a country basis, we saw improving trends in the UK, where our strategy is beginning to
deliver, improvement in Germany, reflecting a more commercial approach on our side,
continued growth in Italy and a stable rate of decline in Spain, where, as we all know, the
economy remains tough.

Looking at the mobile and fixed trends separately, we see that the mobile business in
Europe declined by 4.6% in Q3, and this is a 1.3 percentage point improvement versus
Q2. I will come back to the specific drivers of this in a moment. Contract net adds at
747,000 were ahead of Q2, reflecting the increased commercial activity that I told you in
November we needed to undertake with focused A&R (acquisition and retention), funded
primarily from our cost-reduction programme.

European fixed line revenues increased 10% to £775 million in Q3. This is our first
double-digit organic growth rate in the fixed segment. In fixed line, we recorded good and
often market-leading net adds during the quarter. Fixed broadband customers are now

4 February 2010
Vodafone Analyst and Investor Conference Call                                   IMS Q3 2009/10

around 5.2 million, up one million versus the same time last year. In Germany, growth
has doubled to 4%; in Spain and Italy, it remained at double digits at 11% and 22%
respectively. So, the story here remains a story of focused and selective execution, using
our trusted communication brand, our controlled distribution, competitive pricing and the
Vodafone station product to really drive net adds and penetration in these three markets.

Moving to slide six, let me go a little bit deeper into the drivers of the improving trends. At
the top left, you can see that the rate of decline in our mobile business has slowed this
quarter, driven by continued data growth, and a strong quarter in messaging, particularly
in the UK and in Italy.

As the chart on the right shows, the outgoing voice business trend is similar to the
previous quarters, with a small increase in voice user growth and similar rate of price
declines. Moving to the bottom left, you can see that the fixed line revenue growth
accelerated again in Q3, and bottom right you can see that the enterprise revenue in
Europe continued to decline, but we have seen an improvement over the previous two
quarters, driven essentially by roaming.

In summary, I would say, after seeing stability in trends in Q2, now we see an
improvement in Europe in Q3.

Moving to slide seven, let's see the other two regions. In Africa and Central Europe, on
the left, organic service revenue declined by 0.5% – a significantly better result than the
previous quarter. Here, the story is Turkey returned to revenue growth, up now nearly
13%, Vodacom, which continues to trade pretty well with continued robust growth in South
Africa, and then I would say similar trends in Central Europe, [but at least not worsening
versus Q2.]

In Asia-Pacific and the Middle East, on the right, service revenue grew 10.4%, which is
slightly above the last quarter. Within the region, in India, we recorded nearly 14% growth
in the quarter, following the country-wide introduction of per-second billing. Egypt has
returned to growth at 2.7%, with good customer adds and data offsetting a competitive
environment which I would define as 'aggressive'. Finally, in our Australian joint-venture,
we are performing in line with expectations. Cost synergies here are running a little ahead
of plans, and the pro forma revenue growth was about 8%.

Now, before passing to Andy, I want to spend a few minutes on a couple of drivers which
are, I think, central to our data business: the device strategy and the network capacity

I am on slide eight now. I would say that our device strategy is simple: we need to ensure
that we have the best selection of relevant devices for our customers in every segment,
meeting their needs at every price point. The smartphone adoption by customers is
clearly providing the next leg-up in our data revenue growth. In Q2, smartphone sales
represented about 20% of our unit sales; in this quarter they have increased to 25%, and
now we are targeting for this to rise to between 30-40% in the next financial year. It is an
essential element of our strategy.

In the past 12 months, we have got iPhone into 14 markets. We have launched
Blackberry Storm 2, we have the Samsung H1 and M1 devices, which carry the full suite
of Vodafone 360 services, which now are available across a very wide range of

4 February 2010
Vodafone Analyst and Investor Conference Call                                 IMS Q3 2009/10

smartphones. So, we think we are pretty well equipped. We also are delighted that we
are the first one to announce to be a partner for the Google Nexus One in Europe.

But smartphones are relevant for many, I would say, but not for all the customers. Many
still choose cheaper, more basic handsets, and here Vodafone has another advantage,
and this is kind of the middle part of the chart. Since 2006, we have been developing and
launching our own branded devices, with a focus on low price, reliable equipment and
relevant functionality. To date we have already sold 23 million own-branded devices, and
we have used our purchasing scale to drive the cost down to as low as $15 per unit and I
am confident that we can improve on this. Looking ahead, we are now examining how we
can make the data services economically attractive also in emerging markets, where data
penetration is very low. As I have said many times, I am convinced that data in emerging
markets will be another good opportunity.

Finally, on the bottom part of the chart, mobile connectivity devices remain central to our
PC connectivity business, where we now have 7.6 million customers. We were the first
historically to launch mobile dongles across Europe, and we are now the first to market
the 21 megabit per second USB sticks in late 2009. So, my key message on devices here
is simple: we will continue to ensure that we have the best selection of relevant devices
for our customers, meeting their needs at all the price points, to clearly enable our
continued data growth strategy.

Now, the other side of the story is clearly the network and the network capacity. I will
move to slide nine. Network capacity has been, I would say, a hot topic at the start of this
year. First, let me say a few words about data traffic assumptions. This year we expect a
doubling of data traffic on the network to around 79 petabytes, which is driven primarily by
PC connectivity and only recently more by smartphones. Looking at usage by product, we
are seeing PC cards to use around 1.5GB per user per month, where smartphones are
using less than 100MB per month, on average, with some of the top ones reaching
250MB per month.

We continue to use all the tools available to ensure that the capacity rises and the
experience remains good, with a sensible quality metric and cost. To give you an
example, currently, about 45% of our European network is High Speed Packet Access
(HSPA), but we are planning to reach 60% by the end of March.

In terms of impact, our Q3 busy hour utilisation, which is not the same hour everywhere,
but it is the busiest in every place, was 35% of network capacity, and only 7% of our sites
are over 90% capacity, so despite significant traffic growth, we have kept our metrics
pretty stable in Europe at our planned capex levels. This is why we are confident that we
can manage traffic growth as we drive smartphone penetration to higher levels, and we
will continue to invest in our network to increase speed and capacity to support customer
experience. As I have said before, if the revenue opportunity is there and we need to
invest a little more, we will clearly make the right decision for the business.

So, let me then summarise before handing over to Andy on slide 10. We think we are
driving operational performance. In Q3, you have seen improved trends in our business.
We now have value enhancement products across Europe almost everywhere, and we
are making good progress with our cost-reduction programmes. We are on track to
deliver our first £1 billion programme one year early, and we have begun to drive, of
course, the new £1 billion programme. This result also shows our progress in total
communication across mobile data, fixed and enterprise. In emerging markets, we have

4 February 2010
Vodafone Analyst and Investor Conference Call                                  IMS Q3 2009/10

established a leading position amongst the large operators in India. We continue to
generate good growth in South Africa, and we have returned, as we committed, to growth
in Turkey. In terms of capital discipline, we have generated strong free cashflow in the
first three quarters. We are on track to generate now between £6.5 billion and £7 billion in
this financial year, which is ahead of what we thought in May and ahead of our medium-
term target.

In conclusion, I would say that many of the economies we operate in remain fragile and
competition continues to be strong, but these results, for me at least, represent a good
step forward since we first felt the effects of the recession in mid-2008. I will now hand
over to Andy for the detailed country view.

                                       Andy Halford
                             Chief Financial Officer, Vodafone

Thank you, Vittorio. Good morning, everybody. I will now review our larger operating
companies' performance in the quarter, then look at cashflow, debt and provide you

Turning first to Germany on slide 11, Germany reported a 2.8% service revenue decline in
Q3, 2.1 percentage points better than in Q2, with improvement in both our mobile and
fixed businesses. In mobile, the decline of 4.9% was 1.8 percentage points better than
Q2. We have seen improved contract net adds as a result of our focus on increasing
sales of smartphone contracts with data bundles. Data continues to grow well, with
revenue up 18%, including a 30% increase in PC connectivity revenue. Super-flat
customers reached 3.6 million, or about 10% of our total customer base, demonstrating
the success of this value-enhanced product family. In fixed, we saw the third successive
quarter of revenue growth, and generated stronger net adds. We also benefited from
good sales through United Internet, our fixed broadband wholesale partner. Enterprise
revenue returned to growth, up about 1%, assisted by roaming and fixed line.

Looking ahead, we are focusing on increasing smartphone sales and driving data plan
attach rates above 90%. Samsung H1 and M1 devices with the full Vodafone 360 service
sold well in the run-up to Christmas and we will use the 360 service to drives sales of
these and other phones, now that 360 has become available across a wider range of

Later this month, we will launch our second brand in Germany,, a no-frills, internet-
only, pre-paid offering, with attractive cross-net pricing. Whilst we expect that our market
share in Germany will continue to be affected by the absence of the iPhone, the
improvement in the service revenue trend reflects the work we have done in the past six
months to improve our competitiveness.

Next, Italy on slide 12. In Italy, service revenue continued to grow in Q3, despite a
weakening economy. Our mobile business declined 1.2%, year-on-year, as aggressive
prepaid competition and customer spend optimisation became apparent. However, we
continued to generate good contract net adds, and to increase our contract customer
base by 19%, year-on-year. Data revenue increased by 20%, with mobile internet, driven
by smartphone adoption, delivering a 56% increase. Fixed line revenue increased by over
22% and we generated another quarter of strong net adds through our direct and indirect

4 February 2010
Vodafone Analyst and Investor Conference Call                                IMS Q3 2009/10

distribution channels. Enterprise revenue returned to growth at 0.8% as a result of the
initiatives we announced in November, particularly in the small office and
SOHO (Small-Office Home-Office) segments. In an increasingly competitive pricing
environment, we continued to focus on value enhancement and driving revenue using
targeted data promotions through smartphones and fixed line.

Turning to Spain on slide 13, the Spanish economy remains weak, with unemployment
over 19%, and this is probably the central driver behind a quarter of similar trends, when
compared with Q2. Mobile service revenue declined 7.7%, a little better than Q2, with
growth in contract revenue and good data revenue performance. However, the prepaid
segment has declined, with high market-wide levels of churn, and enterprise remains
weak. As in Italy, our Spanish team continues to make good progress in fixed line, with
strong net adds and 11% revenue growth.

Looking ahead, we are focused on developing our value-enhancement product
Tarifas Planas, with customers now at 700,000. We are cross-selling fixed into our mobile
customer base, and we are continuing to drive our leading MVNO business to ensure that
we are capturing the value segments, primarily with prepaid.

Now onto the UK, slide 14. In the UK, we began to see traction from our strategy, with a
1.7 percentage point improvement in the revenue trend. We generated another quarter of
strong net adds, 22% data revenue growth and solid SMS growth. We have significantly
enhanced our UK smartphone portfolio, with both the iPhone and, shortly, Google's Nexus
One, and we generated good sales of Vodafone 360 devices in the run-up to Christmas.
We are pleased with the combination of the Vodafone brand with the iPhone in the UK
market generating over 100,000 sales in just three weeks. Our agreement with Carphone
Warehouse is gaining traction and we have generated good volume uplift. In support of
our strategy we continue to make significant investment in network speeds, increasing our
7.2 and 14.4 megabit per second coverage with more to come in the coming months. We
clearly have more to do in the UK, but are taking the right steps to get the business in
shape to improve its market position.

Moving to our emerging market assets, firstly India. Slide 15. You will all be aware of the
competitive development of the Indian mobile market over the past few months, and our
introduction of one paisa per second and fifty paisa per minute tariffs nationwide. In this
environment, overall service revenue growth of 14%, and mobile-only growth of 7%, is a
good outcome. And based on the results of the top four players in the market we have
continued to gain revenue market share against these larger players.

So how have we achieved this? Firstly we have launched simple tariffs and even more
attractive products for customers willing to commit to minimum top up levels. When we
launched our new tariffs we advertised them heavily, with nationwide billboard advertising,
giving our customers the chance to opt in to competitive plans using SMS-based
activation. So our customers could log in to a network that they trusted simply and
quickly. And the response has been excellent. In Q3, about 50% of our prepay customer
base migrated onto these new tariffs, and this is increasing by two to three percentage
points each week.

Looking at the economic effect in Q3, average rates declined by about 20%, but we
continued to drive penetration, and customers and minutes rose by 51 and 35%
respectively. The phenomenon of multi-SIMing is perhaps most visible when one looks at
the decline of minutes of use per customer of 11%. In this environment we must continue

4 February 2010
Vodafone Analyst and Investor Conference Call                                 IMS Q3 2009/10

to leverage our significant scale benefits to maximise profitability at these new, low price

During the quarter we further reduced capex, primarily at the periphery of our network,
exactly as we told you we would in November. One other point of reminder: this is the last
quarter where Indus revenues will provide a strong boost to growth rates as it commenced
operations in January 2009 and this lapping effect will therefore normalise revenue growth
at lower rates. As we said in November, India is challenging but remains an attractive
market in the long term, with significant increases in penetration and data yet to come.

Looking next to Turkey, on Slide 16. Our Turkish business returned to revenue growth in
Q3, with service revenue rising by 13%, and the benefits of our turnaround programme
began to bear fruit. We have seen some noticeable improvements in the general
economic environment, and this has been factored into ratings agencies’ and economists’
thinking, with upgraded credit ratings and a forecast for 4% economic growth in 2010.

The competitive climate is perhaps a little more stable than in the preceding six months,
and we have seen multi-SIM customers consolidating usage and good demand for our 3G
products. As part of the turnaround plan our more competitively priced products have
driven good net adds, positive net ports and significant increases in usage. We are
driving our strategy harder with a focus on core quality, completing our 3G rollout and
increasing our access to controlled distribution.

Next, Vodacom on Slide 17. Vodacom announced its results on Tuesday, so I will focus
on the highpoints from my perspective. In South Africa service revenue growth was
broadly stable at around 8%, a trend consistent with a more stable South African
economic environment.        Data growth in South Africa, driven by Vodafone’s PC
connectivity strategy, remains very good at 37%, with net adds of about 35,000 in the
quarter. Outside South Africa, Vodacom continues to face challenging economic
conditions, most notably in the Congo.

Now, there are a few points on Verizon Wireless, which reported its results last week, on
Slide 18. Verizon Wireless delivered a 4.7% service revenue growth in Q3 in a more
competitive environment. The business reported good net adds at 2.2 million, including a
market-leading retail post-paid performance, resulting in a closing customer base of
91.2 million. Data growth remains exceptionally strong at 33%, and importantly for us free
cashflow generation was again strong, as you can see from the chart on the bottom left
using EBITDA minus capex as a proxy.

Okay, that’s the end of my operational review. I just want to make a few comments on
cashflow, net debt and guidance before summarising and moving to Q&A. Moving to
Slide 19 and cashflow. Cumulative free cashflow, as Vittorio mentioned earlier, to the end
of December was £5.8 billion, up 25% on last year, and was £1.8 billion in the quarter, up
about 16%. Compared with last year we see two primary drivers of the year-on-year
cumulative increase. Firstly, increased Verizon Wireless dividends, partly the deferral for
the current year and partly the receipt of the incremental dividends agreed at the time of
the Alltel acquisition, and secondly working capital improvements. I’ll come back to our
upgraded current year guidance in a minute.

Net debt next on Slide 20. Net debt at the end of December was £31.7 billion, about 2.3
billion lower than at the end of September. The primary driver was free cashflow, but we
also benefited from foreign exchange movements to the tune of £635 million. On liquidity

4 February 2010
Vodafone Analyst and Investor Conference Call                                 IMS Q3 2009/10

and refinancing I would point to the recent US dollar and Euro benchmark bonds we have
executed with 7 and 12-year maturities, where we got very good spreads and significant
demands. Just as a reminder, net debt includes the Indian put options.

Okay, now onto current year outlook on Slide 21. Looking at adjusted operating profit, we
saw profitability trends, including EBITDA margins, very much in line with our internal
estimates for Q3, and therefore we reconfirm the full-year margin guidance we provided
you with in November. Clearly we are now coming to the end of the financial year and we
now have better visibility of the likely outcome. You will have seen in today’s release that
we have refined the adjusted operating profit range and now expect to deliver between
11.4 and £11.8 billion, before Alltel integration costs of £200 million.

Looking at free cashflow generation, we have had an excellent year to date, and I have
already run through the drivers of the Q3 year-on-year improvement. Looking at the full
year, we now expect the free cashflow to be in the range of £6.5 to £7.0 billion, with the
increase in our expectations being driven primarily by our working capital improvement
programme. Remember, our ranges are stated using our original exchange rate
throughout. If the current dollar rate continues for the remainder of this year, that would
have the effect of reducing the full year adjusted operating profit by about £0.4 billion.
The impact to date of foreign exchange (FX) on free cashflow is much less significant.

Finally, in summary, Slide 22, we saw improved revenue trends across each region in Q3.
We have made good progress across all our strategic priorities. The turnaround plans we
put in place 12 months ago are beginning to gain traction. Notwithstanding our continuing
focus on network investment we are generating strong cash flows which comfortably
exceed our medium-term targets, and we have upgraded free cashflow guidance and
refined our adjusted operating profit guidance. Thank you all for listening. I will now hand
back to the operator for Vittorio and I to take your questions.

                           Questions and Answers

Maurice Patrick, Barclays Capital

Hi, it’s Maurice from Barclays Capital. Just on the revenue recovery trends that you see
and the improvement in the quarter, can you just talk a bit about how much of it is contract
and prepaid and how much you think is a macro-recovery and perhaps some of the things
you put in place in the last quarters to drive that. And just secondly, on the femto cells
that you’ve launched, you’ve talked about managing data growth, how important you think
they will be specifically when it comes to managing that opportunity. Thanks.

Andy Halford

Yes, Morris, let me just pick up on the first part of that. We have seen broadly the
business post-paid improving a little bit compared with the previous quarter, so down
around 4%, and then on the consumer side the post-paid continues to be sort of around
one and a half, one and three quarter percentage points down. The pre-paid has
improved but is a little bit weaker, so about 7% down year-on-year. So the post-paid, both
on consumer and on enterprise is holding up well. And the other thing I would observe is
that our global enterprise accounts, the unit we’ve got looking at multi-country customers,

4 February 2010
Vodafone Analyst and Investor Conference Call                                  IMS Q3 2009/10

actually has seen its revenues flat now, year-on-year, and has been performing very

Vittorio Colao

Yes, let me take the femto cell question and make it a bit broader. Femto cell is one of
the many ways we have to manage traffic growth and especially data traffic growth. So
Femto cell are clearly very good for giving in-house and indoor coverage, but you also
have wi-fi, both private and public wi-fi. We have done agreements with wi-fi providers
but we also have our own wi-fi in certain hotspots. You have High Speed Packet Access
(HSPA) upgrade, which of course gives greater spectral efficiency. We can share
networks, which reduce the cost of infrastructure, we can improve the transmission with
our own building now being the largest part of the European footprint. And we have, of
course, a number of other things like quality of service managers that we are
progressively introducing in different operating companies.

The sense of the message I wanted to give you with my Slide 9 was there’s many things
that have to be done and can be done to manage this 100% data growth that we’re
seeing, and we’re doing all of them.

Maurice Patrick

Okay, thank you.

Tim Boddy, Goldman Sachs

Yes, thanks for taking the question. I was going to ask about the improvement in the
smartphone penetration. Just to clarify first of all, the 60% attach rate, that’s the current
attach rate just for smartphones in terms of the data plan sales. My question specifically
is, when people are taking a smartphone with a data plan on a like-for-like basis, what
kind of average revenue per user (ARPU) enhancement are you seeing?

Andy Halford

So you’ve sort of got two groups of customers, I guess. One is those who are upgrading
from one smartphone to another smartphone, and obviously that depends which devices
they are moving up, but often we can be getting £50-60 more revenue a year from those
customers. Secondly you’ve got the customers who’ve not been on smartphone devices
before who are now moving to smartphones, where we are seeing a much more
significant increase.

Vittorio Colao

Yes, but let me add a bit of colour to this. We are now all spending more time in shops
and customer care, and I have to tell you that the difficult thing today is not, when a
customer is going into a smartphone, is to get the extra €7 or £10 or whatever is the
market level for the data. The real difficulty is to help the customer to choose which
smartphone is the right one, which is an extremely good thing for us because now the
portfolio is very wide, which was the sense of my other chart that I wanted to show, and it
is here that having the third largest retail distribution chain in Europe in terms of point of

4 February 2010
Vodafone Analyst and Investor Conference Call                                       IMS Q3 2009/10

sale becomes very important, because we have a very good role that we can play in this

Tim Boddy

And just a quick follow up, if I may, the margin profitability of the extra revenue, is that
better or worse than the current group average, or is it too early to tell?

Andy Halford

It’s a little bit early to tell, honestly. We’ve got some data; it varies by market a bit.

Vittorio Colao

Yes, but I would say it’s not bad. So we are… Again we are comforted by the early
comparisons across handsets and across countries that this is the right strategic move.

Tim Boddy

Okay, that’s very helpful, thank you.

Robert Grindle, Deutsche Bank

Good morning. Is enterprise revenue growth improving because you’re finding more
corporates, corporates are starting to spend more, or is it that the rate of employment loss
at existing corporates is slowing? And my second question is, other service revenue
growth in Europe saw a big jump in Q3. Now, the UK seemed to be a large part of that,
but also other Europe, the remainder. Is there any guidance as to what’s causing the
bounce in that? Thanks.

Vittorio Colao

Yes, let me take the first half and Andy will take the second half. Enterprise is a mix of
different things. For sure, as Andy has said, in the corporate segment we are doing
better. I wouldn’t say that corporates are spending more, I would say that Vodafone is
getting a better share because clearly the global Vodafone enterprise unit that we have
set up three years ago is now the reference partner for many multinationals, so that is
more of an effective commercial strategy thing. I wouldn’t say that a corporate in this
phase likes to spend more. And the second thing is roaming, which actually is improving,
i.e. companies are again slightly allowing their people to travel slightly more than a few
quarters ago. On the other question, Andy?

Andy Halford

Yes, there’s three areas, Robert, which really contribute to this. The first one is on the
wholesale side, where we have signed up a number of wholesale deals, Asda included,
and that is included within that line. Secondly, we have seen increased share of
international visitors coming into Europe, so we have taken a bit of share there. And
thirdly on the enterprise space, some of the other enterprise business services, and with

4 February 2010
Vodafone Analyst and Investor Conference Call                                   IMS Q3 2009/10

the strength particularly in our UK business on the enterprise side, the sort of non-voice,
non-data services are going into that line. So three solid areas of growth for the business.

Robert Grindle

Thanks very much.

Paul Howard, Cazenove

Thank you for that. Could I ask a question around free cashflow and the outlook for
dividends? I guess when you outlined your current dividend policy back in November ’08 I
think free cashflow guidance was £5-5.5 billion, and the Euro was at 1.26. Given the
recent increases in your free cashflow guidance, do you think you can now be more
generous as you consider your dividend policy for the full year?

Andy Halford

Yes Paul, obviously a good question. We will sit down with the board in May and will have
a look at the dividend for the current year. We have always said that we will look at the
business prospects, we will look at the cashflows for the business informing that view and
that deliberation will take place in May. It’s obviously good that we have got the cashflows
in a strong position.

Paul Howard

Okay, thank you.

Simon Weeden, Citigroup

Thank you very much. Yes, I’ve got two questions, please. I wondered if you could give
us any colour on any shift in momentum as you were exiting the quarter in the last few
weeks, particularly looking at call volumes in the European businesses which were
broadly similar in the quarter to the quarter before. And second would be on gross
additions. It looks like a number of your markets saw quite strong increases in gross
additions, I guess Italy being one, Spain being another, in contract at least. So I just
wondered if you could elaborate a little bit more on the drivers behind that and whether
you are seeing more activity from customers being more willing to engage, or whether this
is being solely driven by your own changes in commercial stance.

Vittorio Colao

Well, let me take both questions. December was, I would say, a little better than the rest
of the quarter, and January is supposed to be similar to December. So I would say on the
margin, exit speed encouraging, but I wouldn’t kind of be… Encouraging, that’s the right

Let me then go on the second question. It is difficult for me to comment without having
seen competitors’ equivalent quarterly results, so it’s difficult for me to kind of say things.
The… If I had to say, I’d say that Michel and the European team have, as I had declared
in November, have done a more aggressive commercial strategy for this quarter, and as I

4 February 2010
Vodafone Analyst and Investor Conference Call                                  IMS Q3 2009/10

have said in December, some of the savings that we are getting out of our cost reduction
products would be reinvested in commercial aggressiveness, and I think that this is clearly
visible in the contract side. Difficult, then, to say without having seen the competitors’
results whether this is a general trend or just Vodafone just being slightly being more on
the front foot.

On the prepaid segment the answer is very different by market. As Andy has said in
some markets we are going in the direction of no frills, in other markets we are
traditionally strong on prepaid and so there’s less need for that. Prepaid is difficult to
measure in customer terms. You really need to look at revenues and you really look at
them more on the financials. But for sure on contract there has been some deliberate
action from my European team.

Simon Weeden

Thank you very much.

Justin Funnell, Credit Suisse

Thanks. A couple of questions, please. Was there a big pickup in handset sales for you
in the calendar Q4, financial Q3, and should we be thinking about that when we model
your margins for the second half? Secondly, we’ve seen the first move in the US that
appears to be an increase in data pricing. Do you see scope to do the same thing in
Europe over time? And then thirdly do you think we can start to consider your business in
Europe going back to positive growth within the next 12 months.

Vittorio Colao

Let me start, Justin, with the handset question. Handsets actually are up in our total
sales, with the usual kind of polarisation. So we have up at the high end, smartphone,
more than one, and we have up at the low end with the kind of, I don’t want to call them
cheap, but I would say the good, the well-priced handsets. We are absolutely following
that strategy so we are up, if you want the number, 10%, you know, in the number.
Actually 12% to be precise, in volumes [12% in Q2 and 6% in Q3]. But in value terms the
two things are very different. And as I said in my slide on terminals we do believe this is
the right strategy, so support and enable data growth on one hand and the other end try
and expand the availability of data, especially in emerging markets but not only in
emerging markets.

That was the first question. On data pricing, hard to give you a straight US/Europe type of
link. At the end of the day these things depend on competition and pricing is the result of
the interplay of competition. I personally believe that we’ll see more segmentation in data
pricing in Europe. Going back to my experience when we started doing voice I remember
we could choose between two tariffs, and in data it’s almost there. We are almost at two
tariffs now. There’s going to be more. There’s going to be voice, kind of speed-
orientated, capacity-oriented, time-of-the-day-orientated, segment-orientated tariffs, and
whether that will result in higher or lower average prices, well, it will depend of course on
the competitive game. Do you have a comment on the last one, Andy?

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Andy Halford

Yes, on the growth trends, I guess it is encouraging to see that we are heading in the right
direction. As Vittorio said, clearly a number of economies are still fairly fragile, so I think
we will need to watch this and monitor very carefully as we go forwards over the next two
or three quarters. Clearly we will do an update in May and give you views as to where we
see the year going. But I would say it’s sort of an encouraging start.

Justin Funnell

Thanks very much. Just to understand that 12% year-on-year in volume, sorry 12% in
volume, is that year-on-year or sequential?

Vittorio Colao

Quarter. Quarter versus same quarter.

Justin Funnell


Vittorio Colao

Year-on-year, yes.

Justin Funnell

Thank you very much.

Vittorio Colao

Quarterly basis, year-on-year.

Justin Funnell

Thank you.

Robin Bienenstock, Stanford Bernstein

Good morning. I just have two questions, really, about India. The first is that Reliance
and Bharti in the same periods delivered sort of minus 9 and minus 3% in their topline.
So I’m just wondering, can you just clarify for me what of your growth was from Indus,
what was service revenue? And of the service revenue growth, how much is that from
Metro and how much is from New Circle. And I guess related to that, when I look at your
capex, you say that Indian capex is declining, is that because you are pulling back into C
circles or because you are slowing down rollout in the Metros and the As?

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Vodafone Analyst and Investor Conference Call                                      IMS Q3 2009/10

Vittorio Colao

Yes, Robin, I’ll tell you the underlying number is seven, so the 14 can be split in… 14
total, seven is us, is a kind of Vodafone live! (VL), the mobile company. Which I think is
good in the context. Keep in mind that half of the customer base have migrated onto new
tariffs, and so we have this bigger, big increase in volumes. On the capex front I think the
lower capex are a combination of two things. One, in May you might remember we said
we are allocating a huge amount of money to India but we will check it in September and
then check it again. So in a very high growth situation I think it’s wise, as management, to
have multi intra-year checkpoints, and Nick Read and the regional team who are following
India basically do this every two or three months. We now have a need of having lower
capacity, which is I think just, if you want, an engineering kind of parameter, and plus we
are doing more sharing. So while the high number of competitors clearly on one hand is
not totally positive for India, at the least the positive, there is a positive effect that sharing
actually got encouraged in this period. So it’s a deliberate decision and it’s driven by what
is happening in the market.

Robin Bienenstock

But should I understand that as a pullback in the C circles, or should I understand it as
something else?

Andy Halford

No, I think you should see it as a very, very targeted reduction across quite a number of
areas which is very attuned now with the capacity requirements and where the growth is,
not something that is just as simple as we haven’t done it in the Metros or we’ve cut back
in the A circles. So it is actually just very sort of targeted and specific in a number of

Vittorio Colao

If you want the numbers, I mean, in our traditional 16 circles our target was 90%
population coverage and we are hitting it, we will be hitting it by the end of the year. In the
space test circles the target was around half that, and again we will be hitting it. It’s the
way how we’re reaching, and the engineering parameters in terms of volume needs,
which have changed. And again, I really want to re-stress this, this is something that we
follow every basically two-three months. It’s not financially driven.

Robin Bienenstock

Thanks very much.

Vittorio Colao

Thank you, Robin.

4 February 2010
Vodafone Analyst and Investor Conference Call                                   IMS Q3 2009/10

Mandeep Singh, Berenberg

Hi, thank you. I’d like to ask a question, please, on France. I mean, obviously the
dividends from SFR are beginning to start to increase in your cashflow, which is a
positive. On the other hand there is the risk of new entrant and market disruption on a
sort of 12 to 24 month view. Is management open-minded on the possibility of an exit if
Vivendi was going to offer you a nice price?

Vittorio Colao

Yes, thank you for your question. The situation is very simple as far as France is
concerned. France, SFR is trading well. It’s growing 1%* versus a Europe which is
shrinking 3% for us. So I would say it is a good asset, very well positioned from a
competition point of view, so yes there is more competition coming in but, you know, we
have a fully-fledged total company there. And the dividends will increase because we will
revert back to the agreed level. So I would say… And I would also say that the
corporation is also very good because they are really part of all our marketing initiatives.

Having said that, as I have said in November, it is a minority. No company in general likes
minorities. It’s a very good minority, it’s a very good rights minority, but of course we have
to be open-minded to value and shareholder value creation. So open mind and happy.

*In H1 09/10, SFR organic service revenue declined by less than 1% which is 2 percentage points
better than the Europe 3% decline.

Mandeep Singh

Thank you.

Stephen Howard, HSBC

Good morning. There are three areas I’m interested in. Firstly in terms of capex, if I could
just contrast your comments with those of AT&T recently, and they almost seemed to be
boosted on their conference call of the higher investment that their network required. I
just want to understand the difference between what they are saying and what you are
outlining. Is it just that they’ve got more iPhones, are they relatively under-built by
comparison with you, or do you think you’re going to be talking about investment
opportunities, as you put it, to add data capacity later in calendar 2010?

Secondly I’m interested in your sub-brand approach in Germany, and that sort of
segmentation sounds like a really good idea, so are you intending to extend that to more
markets, and if not what are the defects of this approach? And finally on tariffs I think you
launched some tariffs in prioritisation in Spain. I was wondering what the response to
those had been, and in particular whether customers really understood them, because
they do seem quite complex. Thanks.

Vittorio Colao

Yes, very good set of questions. Let me take them and then eventually Andy can refine
them. On AT&T I’m not sure I can do in this call a straight comparison of the situation

4 February 2010
Vodafone Analyst and Investor Conference Call                                 IMS Q3 2009/10

because of course I know my side of the story and I know less well their side of the story.
My impression is that in Europe we started earlier building data capacity and we have,
quite frankly, from what I understand from Verizon, also the topology of our cities and the
way the US which is kind of low rise and big spread of residential areas is built, clearly
impacts how you have to cover things. iPhone, yes, could be part of the thing, but in our
engineering parameters we have very carefully analysed all research notes that have
been written recently. I’d be very happy to compare notes. We have been quite
aggressive in assuming future smartphone, not just iPhone, smartphone average
capacity, and as I said we think we are in the right space. So hard to me to say the
parting points, to be honest, between Europe and AT&T.

On the second brand good idea, I think it’s a market-by-market thing. In Germany we are
relaunching o.Tel.o. I think in Germany we said that there are kind of no frills segments
that have a certain traction. In other countries we are relying more on Mobile Virtual
Network Operators (MVNO). It’s really, at the end of the day it’s not a religious decision,
it’s an opportune decision. If you good MVNOs you could work well with MVNOs, have
distribution with MVNOs. If you think that, you know, it’s better to have your own thing and
you do online on your own, maybe you have to do it market by market. In Italy, for DSL
we have the same approach. So we have a Vodafone DSL, have a second brand DSL,
so again it is market driven and we are very open-minded to what our regional
management and our local management decide.

Spain I would say, unless Andy you have something… I would say it’s a bit early to say. I
think customers understand very well that speed has a value, and customer experience
has a value, and that given the fact that data in general in Europe is not high-priced, I
think that there is room. I don’t know, Andy, do you want to elaborate?

Andy Halford

Can I just actually elaborate on the first point, Stephen? The buildout of 3G networks in
Europe and by us goes back to 2004. The start of the buildout in the US was somewhat
later than that. So the fact that there is more need for investment in the US is a sort of
timing phenomena I think, as much as anything, and I’m pretty sure that the number of
base stations we’ve got per head of population in Europe is significantly ahead of that
which would typically be the case in the US, though I think that makes it a little bit less

Stephen Howard

Okay, that’s interesting. Thanks very much, guys.

Emmet Kelly, Merrill Lynch

Yes, good morning everyone. Just two questions, please. Firstly, it looks like the first leg
of a top-line recovery is coming together in Germany. You’ve already mentioned the
bottom end of the market with the new prepaid brands, could you talk a little bit about your
commercial offerings for the rest of the year towards the top end, so towards the contract
market? There’s been a lot of chat that perhaps you could win iPhone distribution rights
towards the end of 2010, so maybe if you’d say a few quick words on that.

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Vodafone Analyst and Investor Conference Call                                   IMS Q3 2009/10

Second question relates to Italy. I think it’s fair to say Italian wireless competition has
been a little less intense over the past 18 months. Obviously Wind remains very
competitive with a number of their offers, but it seems maybe Telecom Italia Mobile (TIM)
might be springing back into action a little bit. I saw they introduced some tariffs like Tim
Per Tutti, for example. Do you think competition in Italy is maybe stepping up a bit, or do
you think this will remain a reasonably good market for you in terms of revenue growth?
Thank you.

Vittorio Colao

Yes. Well, first on Germany, I think Germany, the rest of the priorities are now enterprise.
We are again growing in enterprise. We have put a lot of effort and we have hired people
and we have created dedicated units and it’s going well. Data growth is clearly a priority.
Now, you asked a question specifically about the iPhone. I cannot of course comment on
things which are in the future, but I can say that part of our strategy for Germany is really
to have the widest possible data portfolio. 360, our own Samsung devices are going very
well in Germany. Clearly we don’t have the iPhone there. The next one will come, so
there is plenty of activities that… SuperFlat internet is also in the contract segment going
very well, so a lot of things. Clearly we look forward to having the broad portfolio as
complete as possible and as soon as possible, but I would say it’s not just a German
point, it’s a general point that we are making to all the manufacturers.

On Italy, I slightly disagree with the fact that Italy has a milder competition. Italy has huge
spending on advertising, for example. It’s incomparable to any other market. Italy has
very aggressive promotions in the channels and spent a lot for keeping, also, given the
nature of the Italian distribution, very big distribution pipes. And also some of the pricing,
if you look at SMS pricing in Italy it is, you know, one of the best really in the world, not
just in Europe. So, it’s just a slightly different type of competition. Wind is focused on low
price, Hutchison is focused on data, Telecom Italia is sometimes, I wouldn’t comment, but
I would say probably we see less of a pattern, but we are focused on being competitive.
We will not give up ground in Italy, neither on mobile nor on fixed, and I think we are doing
well: 22% in fixed; big growth, 20% growth in data. We want to continue.

Emmitt Kelly

Thank you.

Andrew Beale, Arete Research

Hello. Some questions on data, if I can. First of all I just wonder if you can compare and
contrast the European approach to smartphone data plans, and if I can drive them as
often as integrated voice, text and data, with that of the US where it is much more of an
explicit, certainly 30 bucks at the high end. And is there anything that you can do in terms
of the positioning of the data to better reflect the actual usage of data on the network in
your economics and perhaps get a better data uplift.

Secondly, just wondering about the pace of the shift towards smartphones and multimedia
phones. Obviously if you look at Verizon Wireless there was a very, very rapid shift in
their fourth quarter. Do you think you have enough cost reduction to absorb the upfront

4 February 2010
Vodafone Analyst and Investor Conference Call                                  IMS Q3 2009/10

additional costs that might come if the same happened to you? Obviously that would be a
better future revenue trend, so it’s not all bad.

And finally if you can just give us a bit more of an update on 360 and the direction that
you’re heading with that. Thank you.

Vittorio Colao

Yes, a couple of clarifications. First, when Andy mentioned the attachment rate, we were
basically going in exactly the same direction that you described, so we really, unless the
handsets are unsubsidised in which case the customer can do exactly what they want,
clearly we are heading towards as high as possible, 90% or whatever, data plan. So we
are going in exactly the same direction.

The difference is that in the US there – please can you all put on 'mute'? It is very noisy.
Thank you. So this is exactly the same direction. We are just starting from a different
price point, because the market developed in different ways. The network managing;
better yield is going to be a combination of different things. It is going to be pricing, for
sure, also don't forget that a large majority of the 80 petabytes of traffic that we have
today, the very large majority is data cards. It is not smartphones. So, in a way, we have
a yield management opportunity here, because for every one data card, we can slot in for
the same users of network, 7-10 smartphones or 5-10 smartphones, depending on which
smartphones you talk about. So there is an opportunity actually to improve the yield of
the network, if we just manage better the traffic loads between data cards and

Do we have enough money to finance the shift? I think that part of the excellent work that
is being done on the cashflow by Andy and Michel is really to enable, as we have said
from the beginning, to enable the creation of this new world, which is going to be,
eventually, 100% a data world. So I am confident that we are heading in the right
direction, and, as you said, it will take time, but Europe will get there.

On 360, we are clearly focusing on the service element of them, so we have vertical
phones, but the most important thing for us is really being in the address book
management, in the customer experience side of it. We need, we might or not need,
depending on the segments and depending on the customers having dedicated handsets,
but it is the service component that will be emphasised in the future and it's the
management of the customer experience, rather than the kind of hard form factor,
hardware side of the story. And, so far, I would say, in most markets, we are heading in
the right direction.

Michael Kovacocy, Daiwa Capital Markets

Thank you. I think that Justin partially covered my question, but I would like to focus on
what appears to be, potentially, an up trend in Europe service revenue, on an organic
basis. The question, in particular, would be, how much of what you have seen in the
recent quarter was perhaps due simply to pent-up demand, which came in conjunction
with increased commercial activity, and perhaps generally a better mood in terms of the
macro economy and where it was going, and the kick-on effects on consumers and
businesses? The second question is, how much of your revenue, going forward, is macro
tracking? So, if we actually see stability, flattening out of economic growth, or perhaps

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Vodafone Analyst and Investor Conference Call                                     IMS Q3 2009/10

even a double dip, can you continue to actually increase your service revenue towards,
let's say, at least a zero percent year-on-year point, or will you actually track the
economy? Thank you.

Andy Halford

Good questions. The first one, I think, is particularly difficult. The improvement we have
seen a couple of percentage points. Discerning how much of that is consumer confidence
versus how much of that is the pricing in the market, is really, really difficult to interpret.
What is clearly the case is that the demand is there. The volume of minutes that we sell
goes up, quarter on quarter. The number of texts we sell goes up, quarter on quarter.
The data has clearly gone up strongly in the middle of a recession, but trying to
differentiate between those two, I think, is quite difficult. On your general tracking point,
clearly the history has been that mobile has broadly tracked against the GDP trends. That
has continued to be the case until recently. We hope and believe that there is no reason
why that shouldn't continue to be the case going forwards. Time will tell, clearly, on that,
but it has been the case that we have tracked broadly against GDPs over quite a long
period of time.

Michael Kovacocy

In particular, then, if we see a flattening out of growth, if we go into a nil growth scenario in
Europe in this current year, how would you expect to track? Would you still be able to
continue with that momentum which had been touched upon earlier by Justin, or will you
actually kind of track in line with the economy, ie staying flat at, let's say -3 or –2%, 3%,
4%, year-on-year service revenue in Europe?

Andy Halford

It is very difficult. It's a crystal-ball job. I mean, we are seeing an improvement. We are
working on many, many fronts on a commercial side to continue that momentum. Let's
see what the fourth quarter comes out like. We will talk in May about how we see next
year coming up. We will guide formally for next year in May. More evidence, more
months under our belt and we'll be clearer on the answer to your question.

Karen Egan, RBS

Good morning. I just had a couple of questions about the UK market. One is, since your
iPhone launch has clearly been a success from an add-ons perspective, can you
comment on what, if any, ARPU uplift you expect from this? Secondly, regarding your
fixed line strategy, the UK obviously rather stands out as an important market where you
don't have a fixed line business of scale. Could you please comment on whether you see
that as a gap and whether you might seek to address the issue?

Vittorio Colao

Yes, Karen. The answer on the iPhone is yes, there is an ARPU uplift, but it is too early
to comment on it and probably we are not going to disclose exactly the amount, but there
is – I mean, it is happening, which is, in general, true of all of the upgrades to
smartphones and to data tariffs. On fixed line, you know, in the UK, we are focused first

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Vodafone Analyst and Investor Conference Call                                   IMS Q3 2009/10

on mobiles, for two reasons: first of all because the market is not a market where the
market structure, the strategies of the existing players and so on, so far has requested
any different strategy, and second because we want to regain competitiveness in mobile,
and our main focus is there now.

Karen Egan, RBS

Okay. Thank you.

James Britton, Nomura

Thank you very much. I have a couple of financial questions for Andy. Firstly, can you
just talk a bit more about the working capital programme that you seem to be pushing
hard on internally? Have you got any targets for, I guess, future years? Obviously you've
done well this year but what's possible for next year and beyond? Secondly, Andy, at this
stage last year you commented that you saw margin trends remaining broadly the same in
Europe for the foreseeable future. Are you of the same view today, given the expansion
of the smartphone sales mix we've got ahead? Finally, a question on network: the
increase of the percentage of sites at capacity from 5% to 7% is quite a big step. If we
start to approach 10%, doesn't that mean most of your sites in urban, city areas are
seeing congestion? What do you think is the right level for a premium-quality network
service in Europe?

Andy Halford

Let me try and take those in order. Your first one was on working capital. We have got a
big programme underway across the group. We're not going to give external targets on
that, but I think it is fair to say that we see quite a number of areas of opportunity, and
quite a lot of the things we have been doing recently on the standardisation on the
procurement front and setting up our procurement activities and concentrating those is
giving us some good steps forward and we will be continuing to progress those, not just
this year, clearly, but into next year as well.

Secondly, your question on margins. We said in November that we sort of expected
around the 200 basis point decline. The margin was clearly taking account of, then, a
trend of increasing smartphone sales. I mean, the biggest thing that impacts margins in
this business is the top line. Clearly, in a reasonable fixed-cost business, if the top line is
a bit more buoyant than the margin, pressure, mathematically, comes off much more
quickly, so I think the top line and hence the focus we have had on the top line is hugely
instrumental there.

Then, finally, on the capex side, the 5-7%, just to be clear on this, we feel very
comfortable, actually, being in that sort of range. What we are saying is that, with the sort
of capital spend we have at the moment, we have very, very few sites that are actually
getting near to their capacity, even in the busiest hour of the day, and when that does
happen, we have a number of options available to us – new sites, putting in more
channels or whatever – to actually deal with that, and keeping it down at those levels,
whilst the data growth is going at nearly 100% per annum, we think is actually very good
news, so not troubled by that at all, and obviously we'll do a further update on the 5-7%
statistics as we go forwards.

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Guy Peddy, Macquarie Capital Europe Ltd

Good morning. Just a follow-up on several previous questions. If we look at the step
change in service revenue trends you've done in Germany and the UK, and we look
forward into the first half of 2010, where I think the comps are easier, plus you've
launched the iPhone in the UK, do you think it's reasonable to expect further material step
changes in your service revenue growth rates over the next two to three quarters?

Andy Halford

I think it will be, when a step change is a step change or when it isn't, I think is a little bit
arbitrary. The UK obviously has moved forwards. You are right that the point of
comparison does become a little bit easier. You are right that with the iPhone in there,
that should help. Germany, clearly, we haven't got an iPhone date, so when that happens
is less clear. But we are just pushing on many, many commercial fronts here, and
sharpening the business. The iPhone, definitely, will help in the UK, and I'd see this as
being an evolutionary improvement. I'm not sure that I'd associate step changes with it,
but rest assured we are really, really pushing to make sure that the momentum we have
at the moment we continue.

Mark James, Evolution Securities

I have two or three questions. Can I just take you back to your answer on working
capital? Can you elaborate a little more as to what you have done, and perhaps where by
regions and why, given there is a finite limit to what you can extract from working capital, it
wouldn't reverse or at least curtail, your expectations for next year? Second question was
really on data pricing. We are seeing fixed broadband pricing going up. When you look
to price mobile broadband, do you always look against your mobile peers, or do you
actually look at what has happened in the fixed world? Last question, on the iPhone: I
was interested in how you're using that device. Are you using it as a retention tool, or
more for new customers?

Vittorio Colao

Mark, thank you. Let me take your question, and actually I think we have time for one
more after this one. Data pricing, we look at both. Of course, competitive pricing, which
is the most immediate thing, and, again, we are seeing that some competitors now are
reducing the quantity or the number of the gigabytes that are included in the plan. We are
actually taking the other route, which is to say, if you want better or more, why don't you
give us, you know, slightly, €5 more or whatever is the appropriate in every market. So, I
think it's going to be a combination of things, and it's going to be market by market, and it
will be influenced by what happens in the fixed space, of course, but it will be mostly
influenced by what the operators' capabilities are to improve the yield of the network,
which I think is going to be the important thing. On iPhone, I would see it not very
differently from any dataphones. Think of three-quarters, 80% upgrades, ie adoption of
data plans from old customers, and 20% new customers, 20-25%. This is more or less
what we have seen. Andy, do you want to take the working capital question?

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Vodafone Analyst and Investor Conference Call                                   IMS Q3 2009/10

Andy Halford

Yes, I mean, we've got a business with, you know, a top line of £40 billion-plus and, you
know, outflows of £30-something billion, so the £70 billion or so, there are a number of
areas where we can just fine-tune payment terms, cash collection processes, and I'm very
comfortable the things we're doing here are sustainable. They're not things which are
going to be a great bonus this year and then are going to go completely the wrong way
next year. We're doing this gradually, we're doing it thoughtfully, and I'm very comfortable
that they are sustainable, non-damaging, good things to do for the business.

Will Draper, Execution Ltd

Hello there. Just a couple of things. First, I don't think anyone else touched on mobile
spectrum yet. We know that stuff is coming in India in March, we are aware there's an
auction coming in Germany in April. Can you tell us, first of all, where else you're aware
of mobile spectrum auctions this year and secondly, whether there are any kind of
numbers that we should be starting to pencil in to our cashflow forecasts for mobile
spectrum? The second question is really the same but on mobile termination rate cuts.
Can you fill in some of the countries where you are expecting, particularly in Europe, I
guess, termination rate cuts this year?

Vittorio Colao

Yes. I would say, first of all, that auctions are coming in India in March I am not so sure,
to be honest. We will see. They will happen when they will happen, and the process has
been dragging for quite a while. We have coming auctions in Germany, in the UK, in the
Netherlands and then also Spain, other markets. I would say it is difficult to put a number
on things whose rules are not – not just to talk about the timing but also the rules – are
not defined yet. Somewhere you talk about 800, somewhere you talk about 2.6, so very
different, scattered. In general, our position, which you can clearly understand from my
words and Andy's words before, is that we don't desperately need spectrum. Spectrum is
a nice strategic option to build on the future on data, and that we will look case by case at
the auction rules and at the need by country. Andy, do you want to elaborate on that?

Andy Halford

No, I think it's right. Generally, putting values on is difficult ahead of time. It depends on
the rules; it depends how many players turn up. The Indian auction is looking as if it's
going to be further delayed, so if we could be more helpful we would be but it is just
difficult until such time as the auctions are actually in progress.

Mobile Termination Rates (MTRs) – we've just got a series of countries that are reviewing
MTRs at different cycles in time. It's continuing to be about a 2% sort of drag on our
otherwise growth rates on revenues. That's been the case for a while, so I wouldn't draw
out anything particular. The overall trend sort of continues as it has been recently and I
would project that going forwards for a reasonable while.

4 February 2010
Vodafone Analyst and Investor Conference Call                                IMS Q3 2009/10

Vittorio Colao

Thank you all for your attention and your questions. I would like to close with my kind of
four key takeaways from this announcement. One is that Q2 was stable versus Q1. Q3 is
an improvement versus Q2. Second, that we are delivering and we are happy to be
delivering on data, on fixed, on the growth engines enterprise improving. Third, we are, in
emerging markets, again delivering better growth in Turkey, holding up well in India and
continued data growth and strong position in South Africa, and of course the free cashflow
solid position, improved guidance and delivery of what was the strategic plan. These are
the four key takeaways. Thank you very much for your attention. Look forward to the
May meetings.

4 February 2010