Final Results - Part 2

Vodafone Group Plc
25 May 2004

Vodafone Group Plc
Preliminary Results for the year ended 31 March 2004
PART 2


United Kingdom

Vodafone UK successfully maintained its leading market position, based on
revenue share, according to the regulator's last published data, in line with
its strategic objectives, despite pricing pressures caused by intensifying
competition and regulatory activity.

Total UK turnover increased by 18% to £4,744 million, driven by organic growth
of 12% and the acquisition of a number of service providers, including
Singlepoint (4U) Limited ('Singlepoint') which contributed growth of 6%. The
organic growth resulted from the larger customer base and increased usage of
both voice and data services, partially offset by a regulatory reduction in
termination rates and the inclusion of calls to other mobile operators within
new bundled price plans. Data revenues, as a percentage of service revenues,
improved over the year to 16.1% for the year ended 31 March 2004 as usage levels
of SMS and other data offerings increased. The increased number of Vodafone
live!TM customers contributed towards the improved data usage. Equipment and
other revenue increased by 111%, as a result of revenues from non-Vodafone
customers acquired with the service providers and increased customer acquisition
and upgrade activity.

Blended ARPU increased in the year, mainly due to growth in prepaid ARPU and the
Singlepoint acquisition. Prepaid ARPU improved to £130 for the year ended 31
March 2004 from £125 for the year ended 31 March 2003. Contract ARPU, excluding
the impact of the Singlepoint acquisition, decreased marginally by £1 to £531
for the year ended 31 March 2004.

Vodafone UK's share of mobile service revenue in the latest quarterly review by
OFCOM, the new national UK regulator, for the quarter ended 30 September 2003,
was 31.8%, representing a lead of 6.5 percentage points over the second placed
competitor.

Registered customers increased by 6% to 14,095,000 and the proportion of
contract customers and activity levels remained stable throughout the year. The
acquisition of the service providers, including Singlepoint, during the year
increased the proportion of in-house managed contract customers from 57% to 93%,
enabling closer management of the contract customer base.

On 24 July 2003, Vodafone UK reduced its termination charges by RPI minus 15%
(on the weighted average charge for the previous year) to comply with its
licence requirements. This reduction implemented the decision of the UK
Competition Commission in January 2003. OFCOM is required to conduct a market
review of call termination under the new EC regulatory framework brought into
force on 25 July 2003 and is expected to conclude its review in summer 2004. The
previous regulator, Oftel, had proposed further cuts in the current and next
financial year.

The UK EBITDA margin fell by 4.4 percentage points to 33.9%. Contributing
factors included increased investment in the acquisition and retention of the
customer base, increased interconnect costs due to changes in the call mix and
lower incoming revenues due to the reduction in termination rates. As the
Singlepoint business has a lower margin, this has diluted the margin in the
second half of the year. These factors have been partially offset by operating
efficiencies, including reductions in network operating costs as a percentage of
turnover. Operating profit, before goodwill amortisation and exceptional items,
has reduced by £22 million to £1,098 million due to the factors discussed above
and increased depreciation charges as a result of a general increase in capital
expenditure and amortisation of the 3G licence, which was charged for the first
time in this year.

Vodafone UK announced a restructuring programme in the second half of the year
which resulted in an exceptional charge of £130 million relating to staff costs,
property provisions and the write down of other assets. The objective of the
restructuring is to consolidate recent business acquisitions and to reorganise
the customer management organisation to meet the changing needs of its
customers. In addition, the business reorganised its network and technology
organisations and implemented a programme to consolidate switching centres in
its network. The benefits of this strategic initiative are expected to be
realised through a reduction in operating expenses, and so improving margins,
during the coming financial years. Please see 'Forward-Looking Statements' on
page 34.

Ireland

Vodafone Ireland's turnover increased by 12% when measured in local currency,
benefiting from increased voice and data usage. Blended ARPU grew from €553 to
€582, in part as a result of strong growth in data revenues, which improved to
represent 20.5% of service revenues for the year ended 31 March 2004, from 19.1%
for the prior year. Ireland continues to have the highest levels of outgoing
voice usage per customer in the Group's controlled mobile businesses, and the
highest data usage in the Group's European mobile businesses, which combine to
generate the strong ARPU performance. Operating profit, before goodwill
amortisation and exceptional items, increased by 16% when measured in local
currency, principally driven by the increased turnover combined with
improvements in operating efficiency.

Vodafone Ireland successfully maintained its leadership with an approximate
market share of 54% and a closing customer base of 1,864,000. Phase 1 of its 3G
licence obligation was met on 1 May 2003.

NORTHERN EUROPE

Financial highlights                      Year ended 31 March       % change
                                          2004           2003
                                            £m             £m       £       €(3)
Turnover        Germany:
                - Voice services         4,123          3,699      11         3
                - Data services            895            728      23        14
                                        -------        -------
                - Total service
                  revenue                5,018          4,427      13         5
                - Equipment and
                  other                    386            219      76        63
                                        -------        -------
                                         5,404          4,646      16         8
                Other Northern
                Europe                   1,949          1,531      27
                                        -------        -------
                                         7,353          6,177      19
                                        -------        -------

Total Group     Germany                  1,741          1,435      21         9
operating
profit(1)       Other Northern
                Europe                   1,451          1,077      35
                                        -------        -------
                                         3,192          2,512      27
                                        -------        -------

Proportionate   Germany                   46.1%          43.4%
EBITDA 
margin(2)       Other Northern
                Europe                    39.0%          39.0%

Key performance indicators (Germany only)

Customers ('000)(4)                     25,012         22,940
ARPU(4)                                   €310           €313
Churn                                     18.7%          21.2%

Acquisition and retention costs net
of equipment revenues, as a
percentage of service revenues(4)         13.4%          12.6%

(1) before goodwill amortisation and exceptional items
(2) see pages 31 and 32 for details of proportionate turnover and EBITDA
(3) local currency percentage change
(4) refer to definitions on pages 36, 38 and 40

Germany

Vodafone Germany performed well in the year, further improving its operational
performance.

Turnover in Germany increased by 8% when measured in local currency, reflecting
the increase in the customer base offset by marginally lower ARPU. Germany
represents the largest mobile market in Europe, in terms of customer numbers
and, notwithstanding a 10% growth in the market for the 2004 financial year,
penetration, at an estimated 80%, is still relatively low. Vodafone Germany's
customer base increased by 9% in the 2004 financial year. The mix of contract
customers increased from 47% at 31 March 2003 to 49% at 31 March 2004, although
new contract customers have been, in general, lower usage customers than the
existing customer base. As a result, contract ARPU fell from €519 for the 12
months ended 31 March 2003 to €494 for the 12 months ended 31 March 2004.
Prepaid ARPU remained stable at €130 during the year after increasing over the
course of the prior year. Data revenues increased by 14% when measured in local
currency and represented 17.4% of service revenues, up from 16.4% in the
previous financial year, primarily due to Vodafone live!TM. Increased investment
in acquisition and retention has contributed to the improved churn rate and high
customer growth.

The EBITDA margin improved by 2.7 percentage points over last year to 46.1%,
principally driven by cost efficiencies in the second half of the year,
particularly in network and IT costs. Acquisition costs as a percentage of
turnover were also lower over the Christmas period, in comparison to the same
period in the prior financial year, due to lower handset subsidies and trade
commissions. Operating profit, before goodwill amortisation and exceptional
items, benefited from these factors, although their effect was partially offset
by higher depreciation and licence amortisation costs as the 3G network was
brought into use in February 2004.

Other Northern Europe

Proportionate customers for the other markets in the Northern Europe region
increased by 11% to 15,575,000 in the period, including the effect of stake
increases in the Netherlands, from 97.2% to 99.9%, and Hungary, from 83.8% to
87.9%.

The increase in turnover was primarily as a result of growth in the Netherlands
and Hungary. In the Netherlands, the increase in revenues was principally driven
by an increased contract customer base and higher data service usage and
revenue. In Hungary, turnover growth followed the increase in the customer base.

Operating profit, before goodwill amortisation and exceptional items, grew
principally as a result of an increase in the profits of the Group's associated
undertaking, SFR. This business reported a strong financial performance, with
revenue increasing as a result of an 8% increase in the customer base to
14,370,000, and higher data revenue. Blended ARPU was broadly unchanged from the
previous year. The reported results also benefited from the full year impact of
an effective stake increase in the mobile business of SFR from 31.9% to 43.9% in
the second half of the previous financial year.

In the Netherlands, the EBITDA margin decreased slightly due to higher net
acquisition and retention costs. In Sweden, operating expenses increased
significantly as a result of the cost of building out 3G network coverage, which
led to a decrease in operating profit before goodwill amortisation and
exceptional items.

Partner Network Agreements were signed in the year with Og Fjarskipti in
Iceland, Bite GSM in Lithuania and LuxGSM in Luxembourg.

SOUTHERN EUROPE

Financial highlights                      Year ended 31 March       % change
                                         2004           2003
                                           £m             £m       £        €(3)
Turnover        Italy:
                - Voice services        4,346          3,656      19         10
                - Data services           668            463      44         34
                                       -------        -------
                - Total service
                  revenue               5,014          4,119      22         13
                - Equipment and
                  other                   262            252       4         (3)
                                       -------        -------
                                        5,276          4,371      21         12
                Other Southern
                Europe                  4,500          3,680      22
                                       -------        -------
                                        9,776          8,051      21
                                       -------        -------

Total Group     Italy                   2,143          1,588      35         23
operating       Other Southern
profit(1)       Europe                  1,156            907      27
                                       -------        -------
                                        3,299          2,495      32
                                       -------        -------
Proportionate   Italy                    53.0%          49.3%
EBITDA          Other Southern
margin(2)       Europe                   37.1%          35.6%

Key performance indicators (Italy only)

Customers ('000)(4)                    21,137         19,412
ARPU(4)                                  €361           €347
Churn                                    16.7%          17.3%

Acquisition and retention costs net
of equipment revenues, as a
percentage of service revenues(4)         2.8%           3.4%

(1) before goodwill amortisation and exceptional items
(2) see pages 31 and 32 for details of proportionate turnover and EBITDA
(3) local currency percentage change
(4) refer to definitions on pages 36, 38 and 40

Italy

Vodafone Italy produced another strong set of results, in spite of the
increasingly competitive and highly penetrated market.

In local currency, turnover increased by 12%, driven by a 13% growth in service
revenues, partially offset by a 3% decrease in equipment and other revenues
arising from reduced handset sales. The increase in service revenue was driven
by the larger customer base and increased usage, particularly of data services,
partially offset by the impact of regulatory changes on interconnect rates. Data
revenues improved significantly to represent 13.3% of service revenues for the
year (2003: 11.3%), mainly due to SMS but also the positive contribution from
Vodafone live!TM and Mobile Connect datacard. Blended ARPU increased by 4% to
€361 following the rise in prepaid ARPU from €298 to €309 and contract ARPU
increased by 10% to €900.

Vodafone Italy responded to increased competition levels in the Italian market
with continued investment in the Vodafone One loyalty scheme and retail stores
coupled with a strong focus on business and higher value customers. This
contributed to the increase in ARPU and the reduction in churn.

The EBITDA margin grew significantly, partially as a result of a reduction in
acquisition and retention costs, as a percentage of revenue, operational
efficiencies and no accrual being made for a contribution tax levied by the
local regulatory authority following a favourable European Court of Justice
ruling on its legality, which benefited EBITDA margin growth by 1.6 percentage
points. These factors were partially offset by higher interconnect costs, due to
higher interconnect volume and increased international roaming traffic.
Operating profit, before goodwill amortisation and exceptional items, was
affected by the commencement of depreciation on the 3G network and amortisation
of the 3G licence following the launch of 3G commercial services.

Other Southern Europe

Proportionate customers for the Group's other operations in the Southern Europe
region increased by 19% during the year, including 10% arising from stake
changes in the Group's operations in Greece, Portugal, Albania and Malta.

Vodafone Spain's turnover for the year ended 31 March 2004 increased by 22% to
£2,608 million (13% when measured in local currency) as a result of a 7% rise in
the customer base and improved voice and data usage, partially offset by reduced
prices. The EBITDA margin increased due to the increased proportion of data
revenue and reduced acquisition and retention costs as a percentage of turnover.

The results for the remaining markets in the region also improved. Vodafone
Portugal's turnover improved by 7%, when measured in local currency, driven by
voice and data usage on top of an increase in customer numbers. Vodafone
Portugal's EBITDA margin improved due to operational efficiencies.

In February 2004, a Partner Network Agreement was signed with Cytamobile in
Cyprus.

AMERICAS

Financial highlights                    Year ended 31 March          % change
                                        2004          2003
                                          £m            £m           £      $(3)

Total Group     Verizon  Wireless      1,406         1,270          11       20
operating       Other Americas           (13)          (51)        (75)
profit/(loss)(1)                      -------       -------
                                       1,393         1,219          14
                                      -------       -------

Proportionate   Verizon Wireless       6,111         5,686           7       18
turnover(2)     Other Americas            31           116         (73)
                                      -------       -------
                                       6,142         5,802           6
                                      -------       -------

Proportionate   Verizon Wireless        35.9%         35.2%
EBITDA          Other Americas          (9.7)%       (20.7)%
margin(2)

Key performance indicators (Verizon Wireless only)

Customers ('000)(4)                   38,909        33,324
ARPU(4)                                 $604          $584
Churn                                   20.5%         26.5%

Acquisition and retention costs net
of equipment revenues, as a
percentage of service revenues(4)       13.4%         13.2%

(1) before goodwill amortisation and exceptional items
(2) see pages 31 and 32 for details of proportionate turnover and EBITDA
(3) local currency percentage change
(4) refer to definitions on pages 36, 38 and 40

Verizon Wireless

In a highly competitive US market, Verizon Wireless continues to outperform its
competitors and ranked first in customer net additions for the year ended 31
March 2004. The total customer base increased by 17% over the year to
38,909,000. At 31 March 2004, US market penetration and Verizon Wireless' market
share were approximately 56% and 24%, respectively.

On a local currency basis, proportionate turnover increased by 18%, driven by
higher service revenue from the larger customer base and an increase in ARPU.
Data products, such as picture messaging, positively contributed to an increase
in data revenue of 172%, which represents 2.7% of service revenue for the
current year. The rise in ARPU was primarily due to a higher proportion of
customers on higher access price plans.

Churn rates continued to improve and are among the lowest in the US wireless
industry despite the introduction of local number portability in the largest 100
metropolitan service areas from 24 November 2003, which allows customers to keep
their phone numbers when switching providers. The low churn rate is attributable
to the quality of Verizon Wireless' network and the success of retention
programmes such as the Worry Free GuaranteeSM, which includes the New Every
TwoSM plan.

The EBITDA margin increased to 35.9% reflecting increased cost efficiencies
being partially offset by increased acquisition and retention costs net of
equipment revenues, as a percentage of service revenues, resulting from higher
gross additions and upgrade activities. In local currency, the Group's share of
Verizon Wireless' operating profit before goodwill amortisation increased by
20%.

Verizon Wireless continued to expand its product base, with the launch during
the period of the first graphics based instant messaging application and a
picture messaging service to complement its data products. Additionally, Verizon
Wireless began to expand its BroadbandAccess service nationally. Powered by its
Evolution-Data Optimized wide-area network, BroadbandAccess commercial service
will be available in many major US cities later this year.

On 23 May 2003, Verizon Wireless completed a transaction with Northcoast
Communications L.L.C. to purchase 50 Personal Communications licences and
related network assets for approximately $762 million in cash. The PCS licences
cover large portions of the East Coast and Midwest, serving approximately 47
million people.

Other Americas

On 29 July 2003, the Group completed the disposal of its stake in the Mexican
mobile operator Grupo Iusacell.

ASIA PACIFIC

Financial highlights                 Year ended 31 March            % change
                                     2004           2003
                                       £m             £m           £       Y(3)
Turnover      Japan:
              - Voice services      4,788          4,776           -          2
              - Data  services      1,350          1,216          11         12
                                   -------        -------
              - Total service
                revenue             6,138          5,992           2          4
              - Equipment and
                other               1,607          1,547           4          5
                                   -------        -------
                                    7,745          7,539           3          4
              Other Asia
              Pacific               1,040            825          26
                                   -------        -------
                                    8,785          8,364           5
                                   -------        -------
Total Group   Japan                 1,045          1,310         (20)       (20)
operating     Other Asia
profit(1)     Pacific                 167            111          50
                                   -------        -------
                                    1,212          1,421         (15)
                                   -------        -------

Proportionate Japan                  28.9%          31.3%
EBITDA        Other Asia
margin(2)     Pacific                40.6%          40.2%

Key performance indicators (Japan only)

Customers ('000)(4)                14,951         13,912
ARPU(4)                           Y80,695        Y87,159
Churn                                23.0%          23.3%

Acquisition and retention costs net of
equipment revenues, as a
percentage of service
revenues(4)                          21.0%          21.9%

(1) before goodwill amortisation
(2) see pages 31 and 32 for details of proportionate turnover and EBITDA
(3) local currency percentage change
(4) refer to definitions on pages 36, 38 and 40

Japan

This financial year has been challenging for Vodafone Japan due to the strength
of competitor offerings.

Turnover increased to £7,745 million for the year ended 31 March 2004,
representing 4% growth when expressed in local currency. The customer base
increased by 7% over the year, with the proportion of lower value prepaid
customers increasing to 9% from 6%. ARPU reduced by 7%, as a result of higher
value contract customers migrating to competitors, the effect of new price plans
and the increased prepaid customer base.

Vodafone Japan's market share, at 31 March 2004, was marginally lower, at 18.4%,
than at 31 March 2003. Overall mobile penetration levels in Japan remain low
compared with the other markets in which the Group operates, increasing over the
year from 64% to 68% at 31 March 2004. 20% of Japanese mobile users were
connected to 3G network services at 31 March 2004, compared with 9% at 31 March
2003. The lack of suitable 3G handsets available for the Vodafone Global
Standard W-CDMA network, compared with the range available through other
operators using different 3G technologies, amongst other factors, has limited
Vodafone Japan's ability to compete effectively in the 3G market. Vodafone Japan
held less than 1% of the customers in the 3G market at 31 March 2004. To
counteract these competitive pressures, Vodafone Japan implemented measures in
October 2003 including new price plans, additional investment in the upgrade of
existing customers and improved loyalty schemes and introduced a new range of
2.5G handsets.

The EBITDA margin fell as expected, particularly in the second half of the
financial year, due to increased marketing expenditure, higher network operating
costs and an increase in provisions for slow moving handset stocks. Acquisition
and retention costs, net of equipment revenues, fell from the previous financial
year, though the trend reversed in the second half of the financial year
reflecting a high volume of upgrades. Operating profit, before goodwill
amortisation and exceptional items, further reduced as a result of a higher
depreciation charge due to launch of the 3G network in December 2002.

The Group is developing a full range of 3G handsets which are expected to be
available in the quarter leading up to Christmas 2004 and are expected to put
Vodafone Japan in a better competitive position. However, until these handsets
are introduced, the necessary focus on retention and upgrades is expected to
keep margins depressed. A plan is in place to improve Vodafone Japan's
performance and competitive position, focusing on cost reductions through
leveraging the Group's global scale and scope, improving the efficiency of the
distribution structure, enhancing customer propositions, including new product
offerings, and focusing on business customers and refining the organisational
structure to ensure Vodafone Japan is more agile and commercially driven. Please
see 'Forward-Looking Statements' on page 34.








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