Vodafone Group Plc Annual Report 2025 229
Strategic report
Governance
Financials
Other information
History and development Unaudited information
Regulation Unaudited information Introduction
The Company was incorporated under English law in 1984 as Racal Strategic Radio Limited (registered number 1833679). After various name changes, 20% of Racal Telecom Plc share capital was offered to the public in October 1988. The Company was fully demerged from Racal Electronics Plc and became an independent company in September 1991 at which time it changed its name to Vodafone Group Plc. Since then we have entered into various transactions which impacted the development of the Group. The most significant in the year ended 31 March 2025 are summarised below. – On 31 May 2024, after receiving the final approval from the Spanish authorities on 14 May 2024, the sale of Vodafone Holdings Europe, S.L.U. (‘Vodafone Spain’) to Zegona Communications plc (‘Zegona’) completed for €4.1 billion in cash and €0.9 billion in the form of redeemable preference shares. On 15th May 2024, Vodafone commenced an initial €500 million share buyback programme as part of the plans to return €2.0 billion over 12 month following. – On 3 July 2024 Vodafone UK and Virgin Media agreed to extend and enhance their existing mobile network sharing agreement for more than a decade, bolstering quality mobile coverage across the country and delivering improved services for customers. – On 5 December 2024, following the previous announcement on 14 June 2023 of the combination of Vodafone Group and CK Hutchison Group Telecom Holdings Limited (‘CKHGT’) UK telecommunication businesses, respectively Vodafone UK and Three UK (the ‘Transaction’), after 18 months of detailed and thorough analysis, the UK’s Competition and Markets Authority (‘CMA’) approved the combination of Vodafone UK and Three UK.
On 29 July 2024, Vodafone confirmed that the Transaction was classified as a significant transaction and Vodafone shareholder approval was no longer required. On 30 September 2024, Vodafone UK and Three UK responded to the CMA’s Notice of Possible Remedies. – On 2 January 2025 Vodafone Group Plc (‘Vodafone’) announced that it completed the sale of its Italian operations (‘Vodafone Italy’) to Swisscom AG (‘Swisscom’) for €7.9 billion in cash. The transaction valued Vodafone Italy at a multiple of 7.6x consensus Adjusted EBITDAaL and c.26x OpFCF for FY24, representing a premium to the Group’s trading multiple and the highest OpFCF multiple of any Vodafone market transaction in the last 10 years. As part of the transaction, Vodafone and Swisscom entered into an agreement whereby Vodafone will continue to provide certain services to Vodafone Italy for a period of up to five years post deal completion. Proceeds from this sale will be used to reduce Vodafone Group net debt and the Board will target to return to shareholders up to €2.0 billion, as already expressed in the announcement of the transaction dated 15 March 2024, once the current buyback programme has completed. – On 10 January 2025, further to the announcements on 4 December 2024 and 19 June 2024, Vodafone Group Plc (‘Vodafone’) announces that it has successfully completed the placing of its remaining 79.2 million shares in Indus Towers Limited (‘Indus’) representing the remaining 3.0% of Indus’ outstanding share capital through an accelerated book build offering (the ‘Placing’) on 5 December 2024. – Subsequent event: On 31 May 2025, Vodafone UK completed it’s merger with Three UK. Click here to view a simplified holding structure for the Vodafone Group: investors.vodafone.com/ VodafoneGroupHoldingStructure
Supporting the EC’s work, reports by Enrico Letta and Mario Draghi considering the EU Single Market and European Competitiveness, were published in April and September 2024 respectively. These reports push for an urgent overhaul of the sectoral regulatory framework. Draghi’s report not only endorses the European Commission’s telecoms problem statement but elevates telecom as a top priority for the upcoming mandate, suggesting an EU Telecoms Act as a key framework overhaul. Letta’s conclusions advocate for an updated EU single market to secure Europe’s economic resilience. These reports provide political guidance and will feed into the work of the new EC. Additionally, on 11 February 2025 the European Commission published its Work Programme for 2025, which builds on its Competitiveness Compass, published on 29 January 2025. The Competitiveness Compass outlined the Commission’s strategy through 2029, to achieve EU’s competitiveness, economic security and industrial decarbonisation, while the Work Programme focuses on the immediate initiatives for 2025. Key priorities for Vodafone from both documents include (i) the Digital Networks Act, scheduled for presentation in late 2025, which aims, inter alia, at improving market incentives to build the digital networks of the future, at creating an integrated Single market for connectivity, and a more coordinated EU spectrum policy, and (ii) the revision of the Horizontal Merger Guidelines, which currently does not have a set publication date. This revision is set to ensure that companies can scale up in global markets and that innovation, resilience and the investment intensity of competition in certain strategic sectors are given adequate weight in light of the EU economy’s acute need. Other relevant initiatives include, the Apply AI Strategy, the 28th regime, the New State Aid Framework, the Single Market Strategy, the Digital package, and the several Omnibus packages on sustainability, investment simplification and defence.
Our operating companies are generally subject to regulation governing their business activities. Such regulation typically takes the form of industry-specific law and regulation covering telecommunications services and general competition (anti-trust) law applicable to all activities. The following section describes the regulatory frameworks and the key regulatory developments at national and regional levels and in the European Union (‘EU’), where we had significant interests during the period ended 31 March 2025. Many of the regulatory developments reported in the following section involve ongoing proceedings or consideration of potential proceedings that have not reached a conclusion. Accordingly, we are unable to attach a specific level of financial risk to our performance from such matters. EU In June 2024, EU citizens were called upon to elect the new European Parliament. This also resulted in a pause for new legislation. With the start of the new Commission, in December 2024, a new legislative cycle began. Telecommunications regulation In February 2024, the European Commission (‘EC’) adopted a digital connectivity package aimed at fostering innovation, security and resilience of digital infrastructures. The package includes (i) a White Paper on ‘How to master Europe’s digital infrastructure needs?’, and (ii) a Recommendation on the security and resilience of submarine cable infrastructures. A public consultation on the White Paper ran until 30 June 2024. The contributions to the White Paper will inform the work of the new EC, which is expected to propose a revision of the telecommunications framework by the end of 2025.
R ead more in our financial statements, note 12 ‘Investments in associate and joint arrangements’
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