Vodafone Group Plc Annual Report 2025 57
Strategic report
Governance
Financials
Other information
Principal risks and uncertainties continued
Risk factors
Scenario
Emerging factors
Data management and Privacy Data breaches, misuse of data, data manipulation, inappropriate data sharing, poor data quality or data unavailability could lead to fines, reputational damage, loss of value, loss of business opportunity, and failure to meet our customer expectations. Risk ranking movement: No change Risk owner: Group Chief Financial Officer/Group General Counsel and Company Secretary Disintermediation Failure to effectively respond to threats from emerging technology or disruptive business models could lead to a loss of customer relevance, market share and new/existing revenue streams. Risk ranking movement: Decreased Risk owner: Executive Chairman Vodafone Germany and CEO European Markets/CEO Vodafone Business IT resilience and transformation Failure or disruptions of IT systems and infrastructure or the inability to modernise and manage the IT environment could negatively impact operations, services, customer experience, or financial performance.
An unauthorised change in a business process may result in the excessive collection and storage of sensitive customer information without their consent. This could lead to increased regulatory scrutiny, potential fines, reputational damage, and significant customer churn.
The proliferation of AI and related regulatory and legislative action across our footprint requires a robust ethics and compliance approach. Geopoliticisation of data will continue to negatively impact cross-border data transfers. New European data regulations, such as the Artificial Intelligence Act and the Cyber Act, will introduce significant new legal requirements around data management of our business activities.
Increasing ‘softwareisation’ of connectivity services combined with the growing ecosystem power of Big Tech companies could see the emergence of competitors and distribution channels with the potential to disintermediate our customer relationships.
In our consumer business, alternative technology solutions may enable new intermediaries to sell communication propositions, while our TV customers may switch to ‘over-the-top’ video-on-demand services. In our corporate business, the ‘softwareisation’ of services may enable new competitors in the value chain. In our infrastructure markets, supplier concentration within the satellite connectivity market and hyperscaler investment in orchestration and network capabilities may present additional challenges in the future.
A major outage in a data centre or cloud provider hosting key IT systems could severely disrupt our operations. Additionally, significant delays in resolving incidents due to the unavailability of end-of-service-life components can exacerbate the situation. Furthermore, legacy IT systems that are unable to adapt and provide the features our customers require can hinder our ability to meet their expectations and maintain a competitive edge. A major network outage or an uncompetitive infrastructure could hinder expected network performance and fail to meet customer expectations. Both issues could negatively affect market share, revenue, and customer trust.
As with other companies who rely on global IT services, the impact of any outage could have wide implications, however, the likelihood of such events are significantly reduced. Additionally, extreme weather events, such as hurricanes and floods, can disrupt our operations and IT infrastructure. Deliberate attacks on critical national infrastructure, like power grids and communication networks, could also increase the risk of disasters.
Risk ranking movement: New/change in scope Risk owner: Group Chief Technology Officer
Network resilience and infrastructure competitiveness Major network outages or ineffective execution of the technology strategy could lead to dissatisfied customers and/or impact revenue. Risk ranking movement : New/change in scope Risk owner: Group Chief Network Officer Supply chain disruption Disruption in our supply chain could mean that we are unable to execute our strategic plans, resulting in increased cost, reduced choice, and lower network quality. Risk ranking movement: No change Risk owner: Group Chief Financial Officer
Extreme weather events and external threats will continue to pose significant risks to our network resilience, especially with the heightened global security threat to critical infrastructure. Securing new spectrum for 5G and future technologies before 2030 is crucial for growth and to prevent customer dissatisfaction. Additionally, Fibre-to-the-Home (‘FTTH’) competitors’ commercial offers threaten our business in the areas where we provide only Digital Subscriber Line or cable services. Changes in the political landscape outside Vodafone’s control may significantly impact the upgrade and maintenance of our network. For example, US and China tensions resulting in a ban of high-risk vendors, long-term impacts from the war in Ukraine, a potential open conflict between China and Taiwan, the additional tariffs from the new US administration and the response from other countries, could impact product availability. Disruption may lead to an increase in our costs in areas such as raw materials, energy, and shipping, while at the same time triggering shortages or extended lead times for critical components.
Political decisions affecting our ability to use equipment from specific vendors could cause trade and supply chain disruptions.
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