Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Vodafone Group — Investor Day (March 2008)
63 slides from Vodafone Group Public's investor day presentation, Mar 5, 2008
Slide 1: Vodafone
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Slide 2: Vodafone Technology Update
Vodafone Technology Update Wednesday 5 March 2008
Slide 3: Vodafone Technology Update - Arun Sarin
Vodafone Technology Update Arun Sarin, Chief Executive 5 March 2008
Slide 4: Disclaimer
Disclaimer The following presentation is made only to, and is only directed at, persons to whom such presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Information in the followin
Slide 5: Agenda
Agenda Opening remarks Arun Sarin, Chief Executive Technology Steve Pusey, Global Chief Technology Officer Albert Hitchcock, Global Chief Information Officer Andy Macleod, Global Networks Director Detlef Schultz, Global Supply Chain Management Director Mike Walker, Global Research & Development Dire
Slide 6: Industry environment
Industry environment Customers Want more speed, simplicity, value and choice (DSL, IM, Web 2.0, video) Regulation Technology Telecoms • HSPA data growth Allowing new competitors industry • Trend to all ‘IP’ networks and lowering pricing • Device evolution • Standardising operating systems New compet
Slide 7: Our five key strategic objectives
Our five key strategic objectives 1 Revenue stimulation and cost reduction in Europe 2 Innovate and deliver on our customers’ total communications needs 3 Deliver strong growth in emerging markets 4 Actively manage our portfolio to maximise returns 5 Align capital structure and shareholder returns p
Slide 8: How is Group Technology supporting our strategy?
How is Group Technology supporting our strategy ? Key technology actions Revenue • CRM systems upgrades to optimise customer products and services stimulation • Enabling the introduction of new services • £410m cumulative savings from technology driven strategic cost Cost reduction initiatives • Rec
Slide 9: Vodafone Technology Update - Steve Pusey
Vodafone Technology Update Steve Pusey, Global Chief Technology Officer
Slide 10: Contents
Contents • Introduction to Global Technology • Objectives & challenges – delivering cost reduction – managing growth pressures – enabling innovation • 4G vision – spectrum position – 4G roadmap – Long-Term Evolution approach 10 Vodafone Group Technology Update
Slide 11: Introduction to Global Technology
Introduction to Global Technology Structure Group spend (FY 06/07) Opex £6.7bn Capex £4.2bn Global CTO 40% Technology 0.6 0.9 related 90% Technology related 1.9 0.2 Information Networks Research & Supply European EMAPA 2.8 Services Development Chain CTOs1 CTOs 4.0 SCM Technology teams teams 0.5 IT &
Slide 12: Technology - Objectives and challenges
Technology - Objectives and challenges Industry trends Europe traffic growth Mature and competitive voice and SMS 1 markets in Europe Strong growth from Europe data, and 2 emerging markets voice and data Jan-06 Jul-06 Oct-06 Jan-07 Jul-07 Oct-07 Jan-08 Apr-06 Apr-07 Expanding market boundaries due t
Slide 13: Initiatives to reduce costs
1 Initiatives to reduce costs • One Global Supply Chain team across networks, IT and services Leverage scale – c50% reduction in Node B prices 2004 to 2007 • Market by market approach depending on relative network position – passive and active sharing in 17 and 2 markets respectively1 Network sharin
Slide 14: Delivery against strategic cost initiatives
1 Delivery against strategic cost initiatives Our cost initiatives, opex and capex targets remain on track Delivered cost savings1 £410m • Network supply chain £340m 100 – May 2006 target: 8% of £3.3bn3 within 2 years 80 £250m 50 – exceeded target ahead of schedule 310 260 200 • Data centre consolid
Slide 15: Initiatives to manage growth
2 Initiatives to manage growth Rapid growth H1 07/08 YoY Initiatives Europe EMAPA 32% up to 4x increase • Radio 24% – upgrading HSDPA to 7.2Mbps in selected hotspots then 14.4Mbps by end 2008 – commercial trials of 28.8Mbps early next year 19% 6% • European 3G network utilisation – 20% on average (5
Slide 16: Innovation - opportunities and challenges
3 Innovation - opportunities and challenges New technologies, devices and providers seen as challenges for mobile … • R&D – guardians of our future “Skype VoIP – assessing future standards, technologies and business models threat to Euro telcos” – assessing relevance to our customers – alerting the
Slide 17: Mobile VoIP - challenge or opportunity
3 Mobile VoIP - challenge or opportunity Currently offers • VoIP is an enabling protocol, not a service poor customer – significant proportion of our voice traffic is already delivered over IP proposition • Appeal to customers will depend on tariff and service quality • Poor quality due to excessive
Slide 18: Innovation - enabling mobile internet services
3 Innovation - enabling mobile internet services Core services Evolving towards total Voice communication Messaging • Enhancing services against a growing solutions choice of service providers and evolving Email customer demand Ringtones Games Vodafone live! • Enhancing the mobile internet experienc
Slide 19: Innovation - core network evolution
3 Innovation - core network evolution • A fully IP based infrastructure to deliver mobile, DSL, Overview enterprise services and evolving total communications services • Initial markets already connected to a unified IP backbone Timeline – remaining European markets by Q1 09/10 • Initial services to
Slide 20: 4G - spectrum position
4G - spectrum position Current spectrum Current holdings11 spectrum holdings • Comfortable with current position – predominantly FDD (paired) – meets medium term requirements 7 largest 2.1 GHz European markets 900 MHz 1800 MHz • Participate opportunistically in future Germany 2 x 12.4MHz 2 x 5.4MHz
Slide 21: 4G roadmap - evolution not revolution
4G roadmap - evolution not revolution Vodafone roadmap 3G Downlink peak rates (Mbps) Options • HSDPA will meet the demands for the next 80 beyond HSDPA 2-3 years 70+ - evolution primarily software upgrade Trials in 2009 4G In hotspots by end 2008 Launched in • Upgrade: evolutionary not revolutionary
Slide 22: 4G vision - Long Term Evolution trials
4G vision - Long Term Evolution trials Common standards Common user experience globally + + Joint LTE trials and roadmaps FDD and TDD chipset solutions Over 650 million customers (20% of total global mobile users)1 1 December 2007 company reports and World Cellular Information service 22 Vodafone Gr
Slide 23: Summary
Summary Core objective is to control costs and enable innovation Cost reduction initiatives to offset growth and market maturity pressures Managing growth through priority investments in the network Innovating to enable internet based services Shaping the industry Delivering value Delivering value t
Slide 24: Vodafone Technology Update - Information Services
Vodafone Technology Update Information Services Albert Hitchcock, Global Chief Information Officer
Slide 25: Information services
Information services Group IT spend1 • Scale and scope £m 5.5% Share of 5.2% 1600 service – Group IT strategy and operations for applications, revenue2 data centres, Office IT, ERP, CRM, billing, online 1200 – around 53% application development & 800 maintenance; 47% operations & other (FY06/07) 400
Slide 26: Standardisation - IT outsourcing (AD&M)
Standardisation - IT outsourcing (AD&M) May 2006 target cost reductions • Scope – outsourcing of software development and maintenance including billing, CRM and web based systems to IBM and EDS • Original target: 25-30% unit costs savings in 3-5 years – scope: £560m FY05/06 spend and 6,300 FTEs • Up
Slide 27: Standardisation - India IT outsourcing
Standardisation - India IT outsourcing Total IT costs including: • Application development & maintenance, operations and infrastructure Scope management • Delivery of key projects: disaster recovery, billing, ERP system, new data centre • Predictable fixed price cost model linked to service revenue
Slide 28: Simplification - Data centre consolidation
Simplification - Data centre consolidation Consolidated data hubs Phase 1 - Data centre consolidation • Consolidation of data centre operations covering all applications and data – from 12 data centres to 2 central hubs and 1 satellite • Delivered May 2006 commitment1 – original target 25-30% saving
Slide 29: Standardisation - integrated office IT services
Standardisation - integrated office IT services Implementing integrated Implementing integrated employee employee tools tools • Scope – consolidation and standardisation of services and technology - driving cost reduction and productivity improvement • Standardisation opportunity – over 100 desktop
Slide 30: Summary
Summary IT driving IT driving significant significant cost cost and and value value benefits benefits Ahead of target to deliver our May 2006 commitments Fragmentation of IT systems creates challenge and significant opportunity Driving simplification and standardisation in everything we do Targeting
Slide 31: Vodafone Technology Update - Networks
Vodafone Technology Update Networks Andy MacLeod, Director Global Networks
Slide 32: Networks – vision and scope
Networks – vision and scope Challenges and Drivers Competition & • Scale and scope regulation – radio and DSL access Cost – transmission – core switching and routing – network services – capex £2.8bn; opex £1.9bn1 • Industry dynamics require a shift in focus Capacity Challenges Capability – data, no
Slide 33: Key initiatives in the Network Environment
Key initiatives in the Network Environment Challenges Initiatives Cost Capability Capacity Coverage Access RAN Access Key driver Key driver Key driver evolution ADSL Transmission Innovation Backhaul Key driver Key driver evolution Core and services NGME / Core IMS Application GGSN services network K
Slide 34: Enabling capacity in our 3G Radio Access Networks
Enabling capacity in our 3G Radio Access Networks Spectrum Site density • Building new wide area sites to • Deployment of additional carriers deliver capacity from existing spectrum holdings • Building micro layers for ultra high • Refarming of existing spectrum capacity • Acquisition of additional
Slide 35: Network sharing - addressing the cost of coverage
Network sharing - addressing the cost of coverage Typical European 3G site cost breakdown (FY07/08e) Opex Capex Rentals/ leases 41% Backhaul (microwave) 37% Backhaul (leased lines) 21% RAN equipment 27% Maintenance 22% Civil work 36% Other (inc energy) 16% Single site Single RAN separate frequency S
Slide 36: Backhaul Evolution - addressing the cost of capacity
Backhaul Evolution - addressing the cost of capacity Data growth drives expansion of backhaul capacity • Backhaul evolution will increase capacity and control spend Radio Transmission Core • Need to cope with: – change in traffic mix – integration of fixed and mobile • Current initiatives to deliver
Slide 37: Core Network Evolution - enabling future IP services
Core Network Evolution - enabling future IP services All IP network – distribution platform for external services and internal IP applications Past state Present state Future state (12 months) • Separate voice/data domains with • Separate but integrated voice/data • One integrated IP data network wi
Slide 38: Innovation - addressing coverage with Femtocells
Innovation - addressing coverage with Femtocells • Assessing the technical potential of 3G Femtocells to: – improve indoor coverage – reduce the cost of wide area network rollout – reduce need for capacity in macro network • Trials – lab trials successfully completed – field trials now underway with
Slide 39: Summary
Summary Driving cost efficiency across our networks Multiple options in place to meet future capacity needs cost effectively Leveraging scale via standardisation and simplification Exploiting innovative solutions to meet our network challenges Providing aa cost Providing cost effective effective pla
Slide 40: Vodafone Technology Update - Supply Chain Management
Vodafone Technology Update Supply Chain Management Detlef Schultz, Global Supply Chain Management Director
Slide 41: Supply Chain Transformation
Supply Chain Transformation Transforming the Transforming the organisation organisation … … … delivering … delivering value value • Scale and scope of responsibility – across £7.5bn spend – across 18 markets – across 200 categories • Getting the basics right – spend analysis – supplier performance m
Slide 42: One SCM: Delivering value through integration
One SCM: Delivering value through integration Markets: Local Local operation and implementation expertise Category Southern Europe Hub management Central Europe Hub strategies UK/Ireland Hub Iberia Hub EMAPA Network Vodafone IT Procurement Company Services Subject matter expertise • Total Integrated
Slide 43: Releasing the benefits of scale in networks
Releasing the benefits of scale in networks Unified approach Unified approach … … … driving … driving reductions reductions in in unit unit costs costs 100% Global price books 95% Example: Node B price reduction Global framework 75% 69% agreements 59% 52% Standardised approach to 48% eAuctions Intro
Slide 44: Delivering value through sourcing innovation
Delivering value through sourcing innovation eAuctions Low LowCost cost Regional regional sourcing Sourcing • eAuctions • China Sourcing Centre – total cost of ownership model based on traffic model – opened in March 2007 – in partnership with leading expert in this field – access and accelerated de
Slide 45: Scale does matter
Supply chain delivering best in class IT pricing Storage “Vodafone continues to Data centre consolidation receive exceptional pricing that is well above ‘best in class’ for all classes of storage.” Scale does matter - IDC 1st time fully global negotiations and commitments List Average Best price VF
Slide 46: Broadening the supply chain scope to Services
Broadening the supply chain scope to Services From local to global buying Services globalisation Services categories • Globalisation of services and indirect marketing spend started Sales & • Globalisation applies equally to Europe and EMAPA Corporate services • Addressable spend increases from 30%
Slide 47: Supplier performance ensured with close cooperation
Supplier performance ensured with close cooperation Six pillars of supplier performance Corporate Financial Delivery Quality Technology Commercial responsibility stability capability management • 6 Pillar assessment of supplier performance – across Vodafone subsidiaries and central operations • Cove
Slide 48: Summary
Summary Overachieved against May 2006 cost savings targets Supply chain organisational transformation completed Delivering benefits through leveraging scale in Networks and IT Globalisation of services and indirect spend progressing Supplier performance management ensures no compromise on quality Un
Slide 49: Vodafone Technology Update - Standards, Science & Innovation
Vodafone Technology Update Standards, Science & Innovation Professor Michael Walker, FREng, Global Research & Development Director
Slide 50: Remit of Group R&D
Remit of Group R&D Scope Collaboration Standards Vendors New platforms and models Start-ups Innovation laboratory Universities .GB .NL .DE .CN .US .FR .ES .GR 50 Vodafone Group Technology Update
Slide 51: Opportunities in Technology
Opportunities in Technology Waves of creativity in Technology platforms R&D tools wireless internet for innovation • Open innovation • New technology • Simulations • Disruption • New ways of doing • Trials business • Discontinuity • Prototype • New business • Re-invention opportunities • Patents • C
Slide 52: Two routes to the wireless future
Two routes to the wireless future IT community Telecom community IEEE 802.16 LTE • Computers (with communication) • (Smart) phones • Sell goods, subsidise services • Sell services, subsidise goods • Broadband bit pipes • Value added services • Best effort • Reliable and secure • Internet architectur
Slide 53: Taking control of future systems
Taking control of future systems Leadership Leadership Making it happen Making happen … LTE standards converging Stretch targets Stretch targets Vendors on board FDD trials TDD trials • Europe • Europe • US • China 53 Vodafone Group Technology Update
Slide 54: Re-inventing the SIM
Re-inventing the SIM • SIM lies at the heart of mobile communications – secure identity token • SIM based NFC applications – ticketing, payment, loyalty ... • Ecosystem built around Trusted Service Manager PAYMENT • Specified all interfaces Trusted LOYALTY service MNO • SIM re-invented as a platform
Slide 55: New business from penetrated markets
New business from penetrated markets Real time traffic information and road usage charging Traffic information to TomTom ation ts m ec in f or roj raffic nal p Extending to all ad t tio Ro Na vehicles in the Netherlands r ging a e ch Lorry road usage usag a d charging across Ro Europe 40 PATENTS FIL
Slide 56: Mobile software becomes king - widgets and web runtime
Mobile software becomes king - widgets and web runtime Positioning the mobile browser as a Web Runtime Terminal Web functionality information for mobile applications & user data Web app Good for the developer – Good for the user – more Good for Vodafone – leverages Web technologies intuitive way of
Slide 57: Newspaper of the future
Newspaper of the future • Mail, music and now media - connected electronic newspapers • Revolution in news distribution – electronic ink on flexible displays connected with 3G – works anywhere anytime Vodafone intuitively Vodafone Kiosk Kiosk • Exploring with key players in the news media business G
Slide 58: Mobile/PC substitution
Mobile/PC substitution Utility computing, broadband wireless and the virtual PC Internet • Computing 3G • Data storage • Office applications • Web access 58 Vodafone Group Technology Update
Slide 59: Open innovation and social networks
Open innovation and social networks r r iv er fo ect Card xd nn Linu bile Co fone Mo a Vod ,000 51 nloads! dow Web 2.0 Research in the Web era • A global open innovation platform • A lab and bridge to Web 2.0 • Customer & developer engagement 59 Vodafone Group Technology Update
Slide 60: Group R&D: Technology platforms for innovation
Slide 61: Forward-looking Statements
Forward-looking Statements This document contains “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 with respect to the Group’s financial condition, results of operations and businesses and certain of the Group’s plans and objectives. Forward-
Slide 62: Question and Answer Session
Vodafone Technology Update Question and Answer Session Arun Sarin, Chief Executive Steve Pusey, Global Chief Technology Officer Albert Hitchcock, Global Chief Information Officer Andy MacLeod, Director Global Networks Detlef Schultz, Global Supply Chain Management Director Michael Walker, Group Rese
Slide 63: Vodafone
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