Vodafone

• Date Founded: 1991
• Industry:Telecommunications
• Corporate Headquarters: Newbury, United Kingdom
• Type: Public

Vodafone Group Plc (Vodafone), headquartered in Newbury, United Kingdom, is a multinational telecommunications company. Vodafone provides mobile voice, messaging, data, business, and entertainment services to its customers worldwide. It is among the largest mobile telecommunications companies in the world in terms of connections. By 2024, the company counted more than 330 million mobile customers worldwide and operated its own fixed networks in fifteen countries, with partner networks forty-six other countries.

The company’s operations are divided into two geographic regions: Europe and The Rest of the World. Vodafone's Global Enterprise Division is divided into five geographical divisions: Central Europe, Southern Europe, and Africa are geographical divisions of Vodafone Global Enterprise, while Northern Europe is headquartered in London, United Kingdom; the Middle East and Africa is headquartered in Dubai, United Arab Emirates; and Asia Pacific is headquartered in Singapore.

Emerging markets in Asia and Africa account for approximately one-third of the company’s revenues. In 2024, Vodafone ranked twenty-seventh in the world for market capitalization. The company is consistently rated the number one or number two mobile operator in most of the countries in which it operates, typically with a market share of between 20 and 25 percent in each country. For example, in 2020 Vodafone had a 28 percent mobile market share in India and a 32.3 percent mobile market share in Italy. According to Forbes, in 2022, Vodafone employed 105,000 people worldwide, and Forbes ranked it number 347 on its list of World's Best Employers in 2024.

In addition to its standard telecommunications services, Vodafone operates a money transfer service, M-Pesa, which has enabled people in emerging markets with limited access to banking to send and receive money through their mobile phones. The company has also provided financial services such as international money transfers, access to savings accounts and loans, payroll services, and access to insurance products in different markets. Vodafone provides consumers and businesses with cloud computing and backup services to secure personal data and to store such personal digital content as photos and videos on their network, as well as to access this data from any connected device while on the move. The company’s Global Enterprise division provides a range of telecommunications services to about 1,700 of the world’s largest multinational companies in over a hundred countries.

Vodafone got its name from the combination of three words: voice, data, and phone. In 1997, Vodafone introduced its Speechmark logo of a quotation mark suspended in red within a white circle, a symbol that both suggests conversation and emphasizes the power of the user’s communication reach.

History

Vodafone's predecessor company was founded in the early 1980s by Ernest Harrison and Gerry Whent as a subsidiary of the British firm Racal Electronics, and it was granted the UK’s first commercial cellular network license. Vodafone Group, Plc was officially founded in 1991, having evolved from a series of partnerships and mergers that began in 1980 between Racal Electronics, General Electric Company (the UK’s defense, electronics, communications, and engineering firm and not the American conglomerate GE), and Millicom Inc. By 1992, Vodafone was the largest mobile phone service provider in the world.

Throughout the 1990s, Vodafone expanded its network and consumer base through acquisitions, culminating in the 1999 merger in the United States with Bell Atlantic to form Verizon Wireless. Early in 2000, Vodafone launched a successful bid to buy Mannesmann, the German telecommunications company, for more than $180 billion. At the time, this was the largest purchase price ever paid in a business acquisition, and the combined company formed the first pan-European mobile phone service provider. In 2001, through acquisitions and partnerships, Vodafone expanded its business first into Ireland by buying Eircell and then into Japan through the purchase of J-Phone. Through a partnership agreement with TDC Mobile of Denmark, Vodafone gained access to the Danish mobile market.

Vodafone has historically operated in emerging markets, notably including Kenya (through its subsidiary Safaricom) and India (through its acquisition of the Indian Essar Group in 2011). It also has had a significant presence in South Africa, Egypt, and Turkey. A leader in mobile payment systems, Vodafone’s M-Pesa was the world’s first large-scale mobile payment service. (The name was derived from the Swahili word Pesa, which means "money," and the letter M came from mobile.) The service was launched in Kenya in 2007. Within five years of the start-up of M-Pesa, over 17 million Kenyans, more than two-thirds of the adult population, were using the service, which enabled people to transfer cash using their phones. The service was so popular that by 2012, a quarter of the country’s gross national product flowed through M-Pesa transactions. By 2014, Vodafone had rolled out mobile payment systems in over ten countries, including India.

The 2011 acquisition of British consultancy firm Bluefish strengthened Vodafone’s Global Enterprise arm. It was Global Enterprises that aimed to advise multinational companies on how to maximize their mobile, fixed-line, and IT services. It also offered guidance on the adoption of cloud services.

Although primarily a mobile communications company, Vodafone acquired the British firm Cable and Wireless Worldwide in 2012, which gave the company global fiber infrastructure and a presence in sixty-two countries. The following year, it acquired Kabel Deutschland, Germany’s largest cable services provider. These two acquisitions strengthened Vodafone’s broadband network considerably.

In 2013, Vodafone also announced the sale of its 45 percent share in Verizon Wireless to Verizon Communications for $130 billion, essentially exiting the US market. The deal was one of the largest in industry history up to that point. Vodafone announced it would reinvest much of the funds raised in the deal in its networks in Europe and important emerging markets, an initiative that was dubbed Project Spring.

The 2014 $10 billion purchase of the Spanish cable operator Ono expanded Vodafone’s cable holdings and furthered its transition from a strictly mobile carrier to a unified communications provider. Later that year, the company announced a partnership with US mobile provider T-Mobile to establish a mobile virtual network operator (MVNO) in the United States.

Through the remainder of the 2010s and 2020s, the company remained one of the world's leading telecommunications companies. In 2019, facing pressure from various Western governments, the company stopped buying 5G network hardware manufactured by Chinese telecommunications giant Huawei for its European markets, citing security concerns raised by the company's connections to the Chinese government. While this marked a major setback for Huawei in the European market, Vodafone continued to use Huawei technology in other markets, particularly in Africa.

In part due to a global economic downturn following the COVID-19 pandemic in 2020 and 2021, in 2022, Vodafone announced it was restructuring its Global Enterprise Division after overestimating profits. Vodafone began restructuring to focus on growth markets and digital services, involving asset sales, cost-cutting, and organizational changes. The company sold Vodafone Italy to Swisscom for €8 billion and Vodafone Spain to Zegona Communications for €5 billion. A global cost-cutting initiative will eliminate 11,000 jobs, including 2,000 in Germany, saving €400 million over two years. By April 2024, Vodafone operated under five divisions: Germany, European Markets, Africa (via Vodacom), Vodafone Business, and Vodafone Investments.

Impact

Vodafone made history as a groundbreaking mobile communications provider and continued to be influential as an industry leader for decades. The company has a significant economic impact both through its own business operations and its provision of financial services to customers. In particular, the role of its M-Pesa fund transfer service in the economies of developing countries has been considerable. Vodafone has also had a substantial social impact, both due to the nature of its business in connecting people and due to its status as a high-profile corporate presence and major advertiser.

Vodafone has striven to establish a reputation for corporate social responsibility, particularly through the Vodafone Foundation. That organization has leveraged the company’s innovation ability in developing emergency, stand-alone communications technology to assist aid agencies and victims of disasters. The foundation’s Instant Network and Instant Network Mini provide emergency mobile communications capability to remote regions and areas that have sustained damage to communications infrastructure and lack cellular coverage. Vodafone Foundation’s Instant Network program was awarded the 2013 GSMA award for Emergency and Humanitarian situations by Groupe Speciale Mobile (GSM).

In 2015, Vodafone topped Forbes magazine’s Change the World list of companies, with the publication noting the positive social and economic impact of initiatives such as M-Pesa. The company has also been viewed as a leader in striving for gender equality in its management team and was praised for its 2015 announcement that it would provide new mothers with a minimum of sixteen weeks of paid maternity leave and allow returning mothers to work thirty-hour weeks at full salary and benefits for the first six months after they returned to work.

Vodafone has also seen its share of criticisms and controversies, however. It faced protracted legal battles stemming from allegations of nonpayment of taxes from the acquisitions of companies in Germany and India. In 2010, street protests in London stemming from the German case succeeded in closing down Vodafone stores. Vodafone also came under heavy fire for its compliance with Egyptian authorities who had ordered the company, along with other network providers, to switch off mobile phone service during the January 2011 protests against Hosni Mubarak. Despite its strong market position, the company struggled with general customer dissatisfaction with the quality of its customer service into the 2020s, and in 2024, Vodafone faced a significant lawsuit from a group of its UK franchisees who claim the company breached their franchise agreements by drastically cutting commissions, imposing excessive fines, and causing financial hardship, resulting in a legal claim worth over £120 million.

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