Vodafone Japan Shiro Tsuda, Executive Chairman Bill Morrow, President 19 September 2005 The following presentation is being made only to, and are 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 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 securities in any company within the Vodafone Group (the “Group”). The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions. The presentation contains forward-looking statements which are subject to risks and uncertainties because they relate to future events. Some of the factors which may cause actual results to differ from these forward looking statements are discussed in the last slide of the presentation and others can be found by referring to the information contained under the headings “Cautionary Statement Regarding Forward Looking Statements” and “Risk Factors” in our Annual Report for the year ended 31 March 2005. The presentation slides and our Annual Report can be found on our website (www.vodafone.com). 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. Although these measures are important in the management of the business, they should not be viewed as replacements for, but rather as complementary to, the comparable GAAP measures such as turnover and reported items on the consolidated profit and loss account or the consolidated statement of cash flows. Vodafone, Vodafone live!, Vodafone Mobile Connect, Vodafone Wireless Office, Vodafone Simply and Vodafone Passport are trademarks of the Vodafone Group. Other product and company names mentioned herein may be the trademarks of their respective owners. 2 Vodafone Analyst and Investor Day 2005 19 September 2005 Agenda • Market Overview • Commercial Strategy 3 Vodafone Analyst and Investor Day 2005 19 September 2005 Japan remains an attractive mobile market Relatively low marketAs of June 2005 penetration1 Share of mobile voice traffic increasing Mobile to mobile 116.8% 120% 115.5% 100% Mobile to fixed 80% 100% 92.7% 89.9% 60% Fixed to mobile 40% Fixed to fixed 80% 69.0% 20% 60% 0% UK Italy Spain Germany Japan FY01 FY02 FY03 FY04 FY05 Relatively high ARPU2 Market share and EBITDA share3 (£) 500 70% 411 367 60% Scale is important driver for profitability 400 NTT DoCoMo 302 300 284 50% 300 243 40% 199 200 30% au Vodafone EBITDA share EBITDA 20% 100 10% TUKA 0 0% Ireland Japan Nether- UK Spain Italy Germany 0% 10% 20% 30% 40% 50% 60% 70% lands Market share 1 As at June 2005 2 12 months ended June 2005 3 EBITDA of Vodafone, au and TUKA = Japan GAAP; of NTT DoCoMo = US GAAP; market shares for FY05 Source: Company and public data 4 Vodafone Analyst and Investor Day 2005 19 September 2005 Key trends in Japan’s mobile market development beyond Multi toward IP Device evolution infotainment -access Mobile handset • SIP-compatible • Approaching PC • FeliCa chip • Wi-Fi • GPS chip • IrDA • IMS (IP –CPU – Memory/HDD • Digital TV chip • Bluetooth Multimedia • MP3 player • RF-ID Subsystem) apps – Fuel cell • MPEG4 player • QR code – Digital camera Service platform • IMS platform • Large-volume • FeliCa • Authentication – Presence capacity – WAP/MMS authentication server – Push-to-Talk • GPS Server • Billing server –VoIP – Streaming • Digital TV-WAP – Rich Voice link • Digital Rights Management Server Convergence Network • All-IP • HSDPA • Beyond 3G (4G） with Wi-Fi New business model • Low cost • Upgrade user • Retain customer • Authentication • Control equipment • New billing method complexity (speed) • Flat-rate (usage ≠revenue) 5 Vodafone Analyst and Investor Day 2005 19 September 2005 Regulatory environment New entrants Spectrum • Obliged to launch service within 2 years NTT DoCoMo au 800MHz • Obliged to reach coverage of 50% within 5 29M x 2 15M x2 years (within 3 years for major metropolitan NTT Vodafone TUKA areas on 1.7GHz) 1.5GHz DoCoMo 11.5M x 2 10M x 2 5.5M x 2 • Additional 5MHz spectrum for first operator to reach 2.5 million subscribers • 15M x 2 nationwide spectrum available • 20M x 2 Tokyo, Osaka, Nagoya Metropolitan Max 3 new entrants: spectrum available 1.7GHz • Official application process expected to start late 2 on 1.7GHz August 1 on 2.0GHz • Initial spectrum allocations expected to be announced by December 2005 IP Mobile NTT New au Vodafone 2.0GHz DoCoMo entrant 15M x 2 15M x 21 15M x 2 15M Existing operators Potential new entrants 1 The Ministry has decided to allocate guard bands of additional 5M x 2 to MNP each of the incumbent operators • Anticipated introduction in autumn 2006 • Provides opportunity to shift market share Source: Company and public data 6 Vodafone Analyst and Investor Day 2005 19 September 2005 Agenda • Market Overview • Commercial Strategy 7 Vodafone Analyst and Investor Day 2005 19 September 2005 Review of our May 2005 presentation • Identified areas of improvement and milestones Turnaround Growth FY05 FY06 FY07 FY08 Terminals Improve 3G handset functionality, new PDC design offerings Improve content offering (esp. music), Services introduce Felica Pricing Encourage usage with competitive price plans Improve indoor coverage and suburban Network area coverage/capacity Customers From net loss to net gain • Turnaround: Part of long term overall strategy 8 Vodafone Analyst and Investor Day 2005 19 September 2005 Aligning our employees and partners Vision • Messaging leadership • Community focus • Easy to use Segment focus Core consumer segments, core business customers and selective wholesale/partnerships Competitive advantage Easiest to deal Innovative Lowest Efficient and with for customers products operating speedy processes & business partners and services cost position and execution Strategic priorities Terminal and service Always easy, Grow the Execution Targeting T Revenue business development based at every touch break out strength and value share on segment needs point customer speed in consumer options base 9 Vodafone Analyst and Investor Day 2005 9 19 September 2005 Terminals and services – terminals Number of 3G terminals shown in catalogue Vodafone NTT DoCoMo au • Drive industrial design initiative and 19 18 introduce segment tailored terminals 13 12 8 • Around 10 further terminals to be 6 introduced in FY06 • Improve 3G terminal repair rate Jul Sep Jul Sep Jul Sep 3G 702NK 802SE 902SH 802SH 802N 902T 903SH 703SH 803T 903T V703N 702NKII 703SHf Dec Jan Feb Jul Aug Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 New for Q3 FY06 Oct Aug Sep PDC V602T V603SH V603T V501SH V501T V302SH V302SH V604SH Ferrari Edition Source: Company and public data 10 Vodafone Analyst and Investor Day 2005 19 September 2005 Terminals and services – services and pricing Services Pricing • Improve Vodafone live! portal • Offer simplified tariffs appealing to usability to drive mobile web usage personal communities • Expand 3G content portfolio – Family Call Flat-rate – Positive impact on churn so far –Comics – Mail Flat-rate – Full track download service started in – Launched in June 2005 August: holding 30,000 songs in 20 – Reinforce Vodafone KK as “messaging” company sites – Dual Packet Flat-rate – 8,500 mobile games available in 334 – Launched in June 2005 (the original Packet Flat- sites (incl. PDC-enabled games) rate launched in November 2004) – Popular, nearly 30% of 3G customers as of – More online and network based games to be August 2005 added • Introduce innovative messaging products • Develop enterprise-specific services 11 Vodafone Analyst and Investor Day 2005 19 September 2005 Terminals and services – network • Improving network performance • Offer comfortable 3G experience to – Investment plan on track: Base station roll- customers out of 5,400 in FY06 – 3G drop call rate better than PDC • Indoor coverage significantly improving – Drive tests indicated good network performance vs competitors – Indoor: to above 90% in FY07 Residential indoor 3G availability1 3G drop call rate 3.5% 100% Vodafone PDC2 80% 3.0% 60% 2.5% 94% 96% 40% 2.0% Vodafone 20% 1.5% (Indicative vendor) 0% 1.0% 1nd survey 2nd survey Jan Feb Mar Apr May Jun Jul Q4 FY05 Q1 FY06 1 % of customers surveyed who had coverage at home 2 Values of Vodafone PDC are 7-month average Source: Company and public data 12 Vodafone Analyst and Investor Day 2005 19 September 2005 Revenue breakout options – significant opportunity • Wholesale – “Retail price minus” business model Handset – Selective partnerships to drive value for customers Service platform: Billing, customer care, VAS Increasing – Demand higher than expected: level of – Cable TV providers partnership –ISPs Mobility management – Data services providers – Content providers Network – System integrators