Vodafone Group Public Limited Company · LSE:VOD
Vodafone Group Public — Vodafone Group — Investor Day (June 2021)
67 slides from Vodafone Group Public's investor day presentation, June 2021
Slide 1: Vodafone Technology Investor Briefing
Vodafone Technology Investor Briefing June 2021
Slide 2: Agenda
Agenda Welcome & introduction p3 Johan Wibergh Chief Technology Officer 11 Our customer demand continues to accelerate p9 22 Scott Petty We have a strong technology roadmap Digital and IT Director p18 3 We allocate capital to drive returns John Otty Group Financial Controller p36 34 Johan Wibergh We
Slide 3: Vodafone Technology: A globally scaled operator
Vodafone Technology ⫶ A globally scaled operator >400 million >140 million 34 thousand 21 connected NGN homes employees countries devices passed Technology Investor Briefing June 2021 All data per FY21 3
Slide 4: Our customer demand continues to accelerate
1 ⫶ Our customer demand continues to accelerate Customer usage is growing rapidly Networks are critical for work Demand drivers Consumer Business Mobile data 9.0 Europe mobile smartphone data usage Post-pandemic (GB/customer/month)1 4K video Enterprise in the 8.0 Pre-pandemic >75% 4K streaming cloud
Slide 5: We have a strong technology roadmap
2 ⫶ We have a strong technology roadmap Vodafone Platforms MyVodafone | Marketplace | MPN | App-Invent | CPaaS | SD-WAN | IoT | MEC | DxL | TV | Comms | M-Pesa | Analytics | TOBi Microwave 4G / 5G Site Vodafone Private Cloud Network & IT NFV | SDN | Network services | Back-end systems Public Cloud I
Slide 6: We allocate capital to drive returns
3 ⫶ We allocate capital to drive returns Capital allocation review process built around ROCE Long range plan targets Strategy Macro investment envelope allocation ROCE > WACC Post-investment review Best practice identified and shared ROCE Long range plan approval Detailed initiative reviews Rigorous
Slide 7: We are transforming to deliver growth: Tech 2025
4 ⫶ We are transforming to deliver growth Tech⫶2025 What we’ll look like Our ambition Reliable, high-speed & efficient 60% 5G built-right population coverage, convergent networks AI/ML analytics >51m on-net gigabit homes in Europe Always-on & zero-touch operational 80% of network incidents automated
Slide 8: Our vision: The new generation connectivity & digital services provider
Our vision ⫶ The new generation connectivity & digital services provider We connect for a better future Our Purpose Inclusion for All Planet Digital Society Ensuring everyone has access to the benefits of Reducing our environmental impact and helping Connecting people and things and digitalising a d
Slide 9: Our customer demand continues to accelerate
1 ⫶ Our customer demand continues to accelerate Johan Wibergh Chief Technology Officer Technology Investor Briefing June 2021 9
Slide 10: Key messages: Our customer demand continues to accelerate
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Key messages ⫶ Our customer demand continues to accelerate A Our customer demand has accelerated over the last year B Cloudification of commu
Slide 11: Our customer demand has accelerated over the last year
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Our customer demand has accelerated over the last year Our network data traffic continues to accelerate Customer usage is growing rapidly
Slide 12: Our customer demand has accelerated over the last year
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Our customer demand has accelerated over the last year Peak demand has increased Networks are critical for work Customers are focused on
Slide 13: Cloudification of communication is driving data growth
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ Cloudification of communication is driving data growth Demand drivers Music streaming operating at scale Consumer Business Spotify Monthl
Slide 14: Device and service proliferation will drive further demand
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Device and service proliferation will drive further demand IoT connections forecast to grow rapidly Driven by expanding scope of business
Slide 15: Device and service proliferation will drive further demand
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Device and service proliferation will drive further demand Business Cloud - €40bn market; 12% CAGR Business IoT - €10bn market; 16% CAGR
Slide 16: Connectivity and digital payments are shaping demand in Africa
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ Connectivity and digital payments are shaping demand in Africa 4G is still underpenetrated M-Pesa volumes are growing rapidly Our financi
Slide 17: Summary: Our customer demand continues to accelerate
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Summary ⫶ Our customer demand continues to accelerate 1 Our customer demand has accelerated over the last year 2 Cloudification of communicat
Slide 18: We have a strong technology roadmap
2 ⫶ We have a strong technology roadmap Scott Petty Digital & IT Director Technology Investor Briefing June 2021 18
Slide 19: Key messages: We have a strong technology roadmap
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Key messages ⫶ We have a strong technology roadmap A Providing a leading mobile experience B Delivering gigabit fixed connectivity C Cloud na
Slide 20: Providing a leading mobile experience: how our mobile networks work
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience 2 How our mobile networks work Mobile Edge Computing Wireless devices Spectrum Radio base stations
Slide 21: One of the leading mobile operators in our markets
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience One of the leading mobile operators in our markets ‘Best’ ‘Very good’ 5G in London & 4G/5G network
Slide 22: Strong spectrum holdings
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience Strong spectrum holdings1 Across all three key bands Low Mid High Operators2 • Lots of bandwidth fo
Slide 23: Managing technology evolution effectively
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience Managing technology evolution effectively Focusing on more efficient technology Spectral efficiency
Slide 24: Future mobile data traffic growth served by 5G
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience Future mobile data traffic growth served by 5G Supported by Massive MIMO efficiencies Total mobile
Slide 25: Delivered through our 5G approach: Building it right
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience Customer and investor demands Delivered through our 5G approach: ‘Building it right’ High speed M
Slide 26: We are a European leader in 5G mobile private networks
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience We are a European leader in 5G mobile private networks Mobile private network key benefits 5G 5G st
Slide 27: We have established new network sharing models
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience We have established new network sharing models 2 Active sharing 14 Passive sharing (Active sharing
Slide 28: We are a founding partner of Open RAN
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Providing a leading mobile experience We are a founding partner of Open RAN Open RAN benefits Components can now be Single vendor Active
Slide 29: Delivering gigabit fixed connectivity
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ Delivering gigabit fixed connectivity Over 140m NGN homes passed1 Rapid upgrade to gigabit speeds 60 Self-built homes passed with gigabit
Slide 30: Building fibre deeper into our hybrid fibre cable network
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ Delivering gigabit fixed connectivity Building fibre deeper into our hybrid fibre cable network A demand driven fibre upgrade path • Fibr
Slide 31: A clear roadmap beyond 1 Gbps peak speeds
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ Delivering gigabit fixed connectivity A clear roadmap beyond 1 Gbps peak speeds A strong upgrade path for our hybrid fibre cable network
Slide 32: Cloud native digital architecture for radical change
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Cloud native digital architecture for radical change Legacy approach to architecture Tech2025 approach to architecture Customer Customer
Slide 33: Cloud native digital architecture for radical change
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Cloud native digital architecture for radical change Ability to rapidly scale up • Moved from single-market servers to shared TOBi standa
Slide 34: Advanced analytics allow zero-touch intelligent networks
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ Advanced analytics allow zero-touch intelligent networks Automate manual human processes Human with Reactive and Predictive and Human aut
Slide 35: Summary: We have a strong technology roadmap
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Summary ⫶ We have a strong technology roadmap Vodafone Platforms MyVodafone | Marketplace | MPN | App-Invent | CPaaS | SD-WAN | IoT | MEC | D
Slide 36: We allocate capital to drive returns
3 ⫶ We allocate capital to drive returns John Otty Group Financial Controller Technology Investor Briefing June 2021 36
Slide 37: Key messages: We allocate capital to drive returns
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Key messages ⫶ We allocate capital to drive returns A Investing efficiently in connectivity infrastructure B Allocating capital to drive retu
Slide 38: Investing efficiently in connectivity infrastructure
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Investing efficiently in connectivity infrastructure Usage has grown rapidly Capital intensity has absorbed this As Cost per GB has falle
Slide 39: Capital allocation breakdown
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Investing efficiently in connectivity infrastructure Capital allocation breakdown Capex by segment (€ billions) Capital additions Custome
Slide 40: Capital intensity varies across our segments
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ Investing efficiently in connectivity infrastructure Capital intensity varies across our segments Investing and partnering Illustrative c
Slide 41: Allocating capital to drive returns and growth
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ Allocating capital to drive returns and growth Capital allocation review process built around ROCE Capital allocation framework Capex Lon
Slide 42: Relentless focus on efficiency and simplification
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Relentless focus on efficiency and simplification Insource Standardise • Use shared services to • Standardise all systems and capability
Slide 43: Agreed network sharing across Europe
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Relentless focus on efficiency and simplification Agreed network sharing across Europe Illustrative phasing of FCF benefits from network
Slide 44: Relentless focus on efficiency and simplification: key examples
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Relentless focus on efficiency and simplification Key examples Vodafone global data ocean partnership with Google IBM Cloud partnership C
Slide 45: Flat energy consumption despite increasing demand
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ Relentless focus on efficiency and simplification Flat energy consumption despite increasing demand Accelerating our use of renewable ele
Slide 46: Investing in digital opportunities with attractive returns
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ Investing in digital opportunities with attractive returns Distributed Multi-access Edge Computing Customers Overview >180 companies in t
Slide 47: Pre-pandemic to post-pandemic capex elements
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ Investing in digital opportunities with attractive returns Pre-pandemic to post-pandemic capex elements €7.4bn High ROCE growth investmen
Slide 48: Summary: We allocate capital to drive returns
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Summary ⫶ We allocate capital to drive returns 1 Investing efficiently in connectivity infrastructure 2 Allocating capital to drive returns a
Slide 49: We are transforming to deliver growth
4 ⫶ We are transforming to deliver growth Johan Wibergh Chief Technology Officer Technology Investor Briefing June 2021 49
Slide 50: Key messages: We are transforming to deliver growth
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Key messages ⫶ We are transforming to deliver growth A We have transformed our operating model B We have the right team and capabilities to d
Slide 51: We have transformed our operating model
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ We have transformed our operating model Network efficiency Digitalisation EU 4G/5G data traffic (%) EU VoLTE voice traffic (%) TOBi month
Slide 52: Significant improvements in digital channel delivery in the UK
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ We have transformed our operating model Significant improvements in digital channel delivery in the UK Planning Efficiency Effectiveness
Slide 53: Legacy operating model vs new operating model
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth A ⫶ We have transformed our operating model Legacy operating model Unlocking efficiency Other Under our legacy operating model, technology Ge
Slide 54: We have the right team and capabilities to deliver
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ We have the right team and capabilities to deliver Matrix organisation to optimise blend of technical & functional expertise with deep lo
Slide 55: One global team – 34,000 employees
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth B ⫶ We have the right team and capabilities to deliver One global team – 34,000 employees Global capabilities • 17,000 employees working acro
Slide 56: We have a clear vision to drive growth
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ We have a clear vision to drive growth Cost per GB Standardised APIs Cost per GB # of Network and IT APIs standardised across markets 120
Slide 57: New product operating model and platform approach
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ We have a clear vision to drive growth New product operating model Platform approach New Generation culture New product framework • Globa
Slide 58: Growth areas for Consumer and Business
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth C ⫶ We have a clear vision to drive growth Consumer Business customer customer Emerging growth area Low latency focus M-Pesa merchant service
Slide 59: We are enabling new digital products and services: IoT
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ We are enabling new digital products and services Platform capabilities Business • Supports connections in >180 markets and 570 networks,
Slide 60: Financial services and M-Pesa
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ We are enabling new digital products and services 13m Financial Services users in South Africa 48m M-Pesa users In SA, we offer financial
Slide 61: Mobile private networks, edge computing and security
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth D ⫶ We are enabling new digital products and services >10 Mobile private networks live across 6 verticals Distributed Multi-access Edge Compu
Slide 62: Tech 2025 summary
1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Summary ⫶ We are transforming to deliver growth Tech⫶2025 What we’ll look like Our ambition Reliable, high-speed & efficient 60% 5G built-rig
Slide 63: Summary: We are transforming to deliver growth
⫶ We 1 ⫶ Customer demand is accelerating 2 ⫶ We have a strong technology roadmap 3 ⫶ We allocate capital to drive returns 4 ⫶ We are transforming to deliver growth Summary Summary ⫶ We are are transforming transforming to deliver to deliver growth growth 1 We have transformed our operating model 2 W
Slide 64: Appendices
Appendices I Definitions P65 II Importance notice p66 Technology Investor Briefing June 2021 64
Slide 65: Appendix I: Definitions
Appendix I ⫶ Definitions Term Definition Term Definition 2G/3G/4G/5G Cellular technologies that enable voice and data services. 2G stands for 2nd IRR Internal rate of return generation etc. MEC Multi-access edge computing: embedding compute servers closer to the edge of AI/ML Artificial intelligence
Slide 66: Appendix II: Important notice
Appendix II ⫶ Important notice By accessing these slides, you agree to be bound by the following conditions. You may not This presentation, along with any oral statements made in connection therewith, contains disseminate these slides or any related recording, in whole or in part, without the prior
Slide 67: Investor Relations contacts and upcoming events
Group investors.vodafone.com Upcoming events Investor Relations ir@vodafone.co.uk 1 Kingdom Street, London, W2 6BY 23 Q1 FY22 trading update July Matthew Johnson Director matthew.johnson@vodafone.com Group IR Daniel Morris Deputy Director Group IR daniel.morris@vodafone.com 27 Annual General Meeting