SASB

Optimising energy usage

The expansion of our networks and the significant increase in data traffic volumes means we carried six times more mobile data in FY23 than we did in FY18, yet our total energy consumption has remained roughly consistent over the same period.

Our strategy to optimise energy usage and improve energy efficiency involves the latest technologies; high performance equipment for servers, storage and our network; highly efficient passive infrastructure for power conversion and cooling; and smart metering and controls using IoT technology and artificial intelligence (‘AI’).

When selecting and procuring equipment, we consider factors such as environmental footprint and availability of features which can modulate consumption. During the product lifecycle, we avoid overcapacity and resource surplus and also efficiently manage power and cooling. As an example, we use sophisticated AI-based algorithms to optimise cooling in more than 70 technology centres across Europe and Africa. We also use big data analytics to benchmark energy consumption against traffic and monitor any inefficiencies or opportunities to reduce energy consumption by putting mobile radio capacity layers into low power modes during low traffic periods. During FY23, we extended this functionality so that it operates 24 hours a day, 7 days a week where feasible.

In order to provide fast, reliable and secure connectivity services, we need to continue to invest in our network to increase capacity and deploy 5G, ultimately enabling an inclusive and sustainable digital society. As a result of the major trends shaping our industry, there will be an increase in energy consumption, however, we are committed to upgrading our networks in a way that maximises energy efficiency.

Many operators, including Vodafone, use Massive MIMO (‘M-MIMO’) antennas when deploying 5G on the 3.5 GHz band. M-MIMO provides very high traffic capacity but has high energy consumption needs. We are working closely with our network vendors to improve both hardware efficiency and software features that will enhance the energy efficiency of 5G M-MIMO antennas. We estimate that more efficient hardware will reduce energy consumption by 10%, while software features will enable a further reduction of 15%.

We also continue to upgrade our network and use more energy efficient hardware. We are deploying multi-band radio units that achieve greater energy efficiency by including multiple frequency bands in a single product (legacy radio units only supported one frequency band). On frequency bands that are upgraded, we estimate that energy consumption will be reduced by 30%.

Finally, we are making more capacity available for 4G and 5G by shutting down our 3G networks, and as of March 2023,  we have shut down 3G in four markets. 3G networks make less efficient use of our spectrum, and by shifting to the more spectrally efficient 4G and 5G technologies, our networks can better support large volumes of data. In turn, that translates into higher energy efficiency. 5G Massive MIMO is around 15x more energy efficient than 3G and 3x more efficient than 4G to deliver the same quantity of data.

Overall, by driving these efficiencies, we can significantly expand the amount of data managed by our networks, while ensuring only a relatively small increase in energy consumption.

Power usage effectiveness (‘PUE’) for data centres

The data centre industry uses the measurement PUE to measure efficiency. A PUE of 2.0 means that for every watt of IT power, an additional watt is consumed to cool and distribute power to the IT equipment. A PUE closer to 1.0 means nearly all of the energy is used for computing.

The trailing-twelve-month (‘TTM’) energy-weighted average PUE for all our owned and operated data centres is 1.58 in (FY22: 1.59).

Our privacy programme governs how we collect, use and manage our customers’ personal data to ensure we respect the confidentiality of their communications and any choices that they have made regarding the use of their data. Our privacy programme is based on the following principles:

• Accountability: We are accountable for living up to our commitments throughout Vodafone and with our partners and suppliers.
• Fairness and lawfulness: We comply with privacy laws and act with integrity and fairness when we obtain and handle customer data, including asking for the consent of the data subject where necessary. We also actively engage with stakeholders, including civil society, academic institutions, industry and government, in order to share our expertise, learn from others, and shape better, more meaningful privacy laws and standards.
• Choice and access: We give people the ability to make simple and meaningful choices about their privacy and allow individuals, where appropriate, to access, update or delete their personal data.
• Security safeguards: We implement appropriate technical and organisational measures to protect personal data against unauthorised access, use, modification or loss.
• Privacy by design: Respect for privacy is a key component in the design, development and delivery of our products and services.
• Openness and honesty: We communicate clearly about the data we collect, as well as our actions that may impact privacy. We ensure our actions reflect our words and we are open to feedback.
• Balance: When we are required to balance the right to privacy against other obligations necessary for a free and secure society, we work to minimise privacy impacts.

Responsible data management

We apply appropriate data management practices to govern the processing of personal data. We carefully select external partners and we limit disclosure of personal data to what is described in our privacy notices or to what has been authorised by our customers.

Some of our services require that we share customer data by their very nature. For example, when our customers are roaming abroad, we need to share communications metadata with other operators to ensure customers are billed the correct amount.

We also ensure personal data is not stored for longer than necessary or as is required by applicable laws and to maintain accuracy of data. Our European customer data is stored on servers in Europe and any transfers of personal data across national borders are subject to robust data transfers compliance procedures, including use of additional safeguards, such as encryption, anonymisation or pseudonymisation. These processes apply to both internal data transfers (such as with our shared service centres), as well as with suppliers and partners.

Key uses of customer data are outlined below.

• Provision of services: We process customer personal data to provide our customers with the products and services they have requested, to fulfil our contractual and legal obligations, and to provide customer care. To provide our services and to charge our customers the correct amount, we must process communications metadata regarding calls, texts and data usage. 
• Quality, development and security of services: We monitor the quality and use of our connectivity and other services so that we can continually improve and optimise them. We also use customer data to help detect and prevent fraud, as well as keep our networks and services secure. 
• Marketing and online advertising: Our customers may voluntarily consent to receive relevant offers and/or targeted advertising through various channels (website, MyVodafone app, email, messaging or post). Where permitted,  we will use customer data to market our products and services and provide more accurate and tailored recommendations. This means we can present our customers with offers when they need them most; for example, when they are about to run out of data. Customers may control their marketing permissions in a granular manner at any time, including opting-out from receiving targeted marketing. Third-party marketing is based on separate permissions. Use of cookies on our websites is based on end-user permissions for both first and third-party cookies, and we clearly indicate if a cookie belongs to first or third parties. We do not sell data tied to specific individuals to third parties. 
• Sharing of data: Where we rely on external suppliers and service providers to process data on our behalf, they are subject to security and privacy due diligence processes, and appropriate data processing agreements govern their activities. Ultimately, all third parties that we share customer data with are required to comply with our own Privacy Policies. New suppliers are subject to onboarding supplier security and privacy verification procedures to ensure our standards are met. We do not share customers’ personal data otherwise, unless required by law or with the consent of the customer.

We may also derive insights with algorithmic systems based on customers’ information. In that context, we have developed a comprehensive end-to-end framework of controls to ensure that customers’ personal information is only processed for purposes which have been agreed with our customers. We apply rigorous methods of anonymisation and de-identification to process the data in the least identifiable manner necessary for a given purpose. Use cases need to be approved from a security, privacy and, where relevant, AI governance perspective, with sensitive/high risk use cases also needing approval from a human rights perspective.

Permissions management platform

We provide our customers with access to their data through online and physical channels. These channels can be used also to request deletion of data that is no longer necessary, or for correction of outdated or incorrect data, or for data portability. Our customer privacy statements and other customer facing documents provide comprehensive information on how these rights can be exercised and how to raise complaints or contact the relevant data protection authority. Our frontline retail and customer support staff are trained to respond to customers’ requests.

Our state-of-art, multi-channel permission management approach, deployed across our channels (MyVodafone app, website, call centres and retail stores), allows our customers to control how we use their data for marketing and other purposes at any time. Permissions are synchronised across our channels. For example, customers can:

• Opt-in for processing of special categories of data;
• Choose what data we collect through the MyVodafone app and how it is used;
• Opt-out from marketing across different channels (call, SMS, notifications), or opt-in to the use of their communications metadata for marketing purposes or for receiving third-party marketing messages; and
• Opt-out from the use of anonymised network and location data (‘Vodafone Analytics’). More information on Vodafone Analytics can be found here: vodafone.co.uk/privacy/vodafone-analytics.

Vodafone’s global business consists largely of a group of separate subsidiary companies, each operating under a local licence (or other authorisation) issued by the government of the country in which the subsidiary is located. Each of these subsidiary companies is therefore subject to the domestic laws of the relevant country.

As a licensed national communications services provider, Vodafone must address the balance between our customers’ right to privacy and freedom of expression and the statutory requirements to provide law enforcement assistance to government agencies and authorities.

Law enforcement and national security legislation often includes stringent restrictions preventing operators from disclosing any information relating to agency and authority demands received, including the disclosure of aggregated statistics.

In a number of countries, the law governing disclosure remains unclear; it can also be difficult to engage with the relevant authorities to discuss these issues. Where we are unable to obtain any clarity regarding the legality of disclosure, we have refrained from publishing any statistics.

Vodafone first published statistics on the number of law enforcement demands in 2014 and our core principles and practices are unchanged. For those markets where disclosure is possible, we provide a breakdown of the number of demands received on a country-by-country basis. This covers the number of demands received to conduct lawful interception, or to disclose customer communications data.

Despite our transparency in this area, there remains no established reporting model to follow when compiling the information requested, nor a standardised method for categorising the type and volume of agency and authority demands. In addition, different governments, parliaments, regulators, agencies and authorities apply a variety of definitions when authorising or recording the types of demands made, as do operators themselves when receiving and recording those demands.

We continue to advocate that it would be much more effective if governments provided consistent and comprehensive metrics spanning the industry as a whole, as this would provide the public with a better understanding of the law enforcement activity being undertaken in their country.

Law Enforcement Assistance policy

Vodafone has a clear set of principles that are used to determine when communications data (which could include metadata such as names, addresses and services subscribed) should be disclosed:

We do not:

• Allow any form of access to any customer data by any agency or authority unless we are legally obliged to do so;
• Go beyond what is required under legal due process when responding to demands for access to customer data other than in specific safety or life emergencies (such as assisting the police with an active kidnapping event) or where refusal to comply would put our employees at risk; or
• Accept any instructions from any agency or authority acting beyond its jurisdiction or legal mandate.

We do:

• Require all agencies and authorities to comply with legal due process;
• Scrutinise and, where appropriate challenge the legal powers used by agencies and authorities in order to minimise the impact of those powers on our customers’ right to privacy and freedom of expression;
• Honour international human rights standards to the fullest extent possible whenever domestic laws conflict with those standards;
• Communicate publicly any threats or risks to our employees arising as a consequence or our commitments to these principles, except where doing so would increase those risks; and
• Seek to explain publicly the scope and intent of the legal powers available to agencies and authorities in all countries where it is lawful to do so.

In each of our operating companies, a small group of employees are tasked with liaising with agencies and authorities in order to process demands received.

Those employees are usually security cleared and are bound by strict national laws to maintain confidentiality regarding both the content of those demands and the methods used to meet them.

Conditions for disclosing customer data

We will provide assistance in response to a demand issued by an agency or authority with the appropriate lawful mandate and where the form and scope of the demand is compliant with the law. Each of our local operating businesses is advised by senior legal counsel with the appropriate experience to ensure compliance with both the law and with our own principles.

Notifying customers

Local laws will dictate whether operators are able to notify a customer in the event of being in receipt of a lawful demand to disclosure their data.
Law enforcement demands are sensitive in nature and we believe it is for governments to provide clear guidelines to operators on any risks associated with notifying a customer.

Country-by-country disclosure

We publish information regarding Law Enforcement Assistance on our website: vodafone.com/handling-law-enforcement-demands.
It is important to emphasise that attempts to compare one country’s metrics with those of another are essentially meaningless given there are no consistent points of common reference and there are very wide variations between legal frameworks, record keeping requirements, and reporting regimes. Similarly, it can be difficult to draw accurate conclusions from year-on-year changes in reported metrics within a country, as these can be influenced by a range of factors. These could include amendments to legislation or new laws; developments in agency or authority or accepted industry practices; or changes to the approaches used to log, aggregate and disclose lawful demands.

We have robust processes in place to manage and track each demand and the information collated and published on our website (wherever available and wherever publication is not prohibited) has been overseen by the relevant Disclosure Officer in each market.

Governance

The overall law enforcement assistance programme is overseen by the Chief External and Corporate Affairs Officer, a member of the Group Executive Committee.

Although the details of individual demands remain highly confidential and cannot be communicated, Vodafone’s security and audit teams conduct regular reviews of the overarching processes and policies that are in place to ensure the integrity of our law enforcement disclosure systems.

In February 2022, Vodafone Portugal experienced a network outage that was caused by a deliberate cyber attack that was intended to cause disruption. No malware or malicious software was installed, and the attack method would be described as a ‘living off the land’ attack because it did not use any specialist tools. The attack relied on sophisticated social engineering, and a deep understanding of IT systems and networks. Investigations revealed that no customer data was accessed or compromised. No other Vodafone markets experienced any disruption from this incident.

The outage affected the data network in Portugal. The impact was loss of some voice and data services, some TV services and enterprise and business applications across the country, as well as international connections. Home broadband and linear TV were unaffected by the attack. On detecting the incident, we utilised our global incident management framework and immediately took action to identify, contain further risk and restore services quickly. Mobile data services and interconnections with other operators were resumed within eight hours of the attack, with other services being recovered during the next 48 hours. The Vodafone Portugal CEO immediately and proactively communicated with customers, and the team used widespread online, social media and press information and articles to keep customers aware of our recovery progress. Our cyber security team is continuing the investigation of this incident and working with local law enforcement and security agencies.

During the incident, 4.7 million mobile and one million fixed line customers were impacted, with some customers having both services. While the network outage was significant, it was only classified as a severe network incident for 48 hours. The direct costs of the incident are estimated in the range of €5 million and are financially immaterial in the context of Vodafone Portugal’s operations and the wider Vodafone Group.

Controls can prevent, detect or respond to risks. Most risks and threats are prevented from occurring and most will be detected before they cause harm and need a response. A small minority will need recovery actions.

We use a common global framework called the Cyber Security Baseline and it is mandatory across the entire Group. The baseline is based on an international standard and includes key security controls which significantly reduce cyber security risk, by preventing, detecting or responding to events and attacks. We have effectiveness targets for the key controls that are monitored and reported to senior management for each market every month. The framework is regularly reviewed and new controls or new targets identified each year.

As well as monitoring control effectiveness within Vodafone, we oversee the cyber security of our suppliers and third parties with a dedicated team. At supplier onboarding, security requirements are written into contracts, and we determine the inherent risk of the supplier based on the service they are providing. We then assess their controls to understand the residual risk, which informs the frequency of review. We follow up on open actions and ensure security incidents are tracked and managed.

A dedicated assurance team reviews and validates the effectiveness of our security controls, and our control environment is subject to regular internal audit. The security of our global networks is also independently tested and benchmarked versus other telecommunications operators every year to assure we are maintaining the highest standards and our controls are operating effectively. We maintain independently audited information security certifications, including ISO 27001, which cover our global technology function and 15 local markets. In addition, our markets comply with national information security requirements where applicable.

Partnerships: Improving consumer awareness of product sustainability

In May 2021, we launched a new Eco Rating labelling scheme jointly with other major European operators. Eco Rating is a pan-industry initiative to help consumers identify and compare the most sustainable mobile phones on the market, whilst also encouraging suppliers to reduce the environmental impact of devices. Eco Rating evaluates the environmental impact of the entire production process, transportation, use and disposal of a handset, resulting in an overall score. 

In November 2022, Eco Rating expanded to reach 35 countries, supported by 22 manufacturers and eight telecommunications operators. Since its introduction, the rating has contributed to improving the environmental performance of mobile phones on the market, illustrated by the increase of the average Eco Rating score from 74 to 76 out of a maximum 100 since it was launched 18 months ago. We now operate this initiative in 12 markets with over 200 handsets assessed and available to our customers.

Customers can learn more about the initiative and see how the rating is calculated by visiting a new website at: ecoratingdevices.com

Partnerships: Extending the lifetime of devices

In partnership with Recommerce, our ‘Trade in’ campaign encourages customers to extend the lifetime of their device by trading it in to be refurbished and resold. Our digital trade-in platform, now live in four European markets, offers customers a guaranteed price to make the trade-in customer journey convenient, cost-effective and attractive.

We are also encouraging our customers to consider purchasing second-life devices. Purchasing a refurbished smartphone saves around 50kg of CO2e – making its contribution to climate change 87% lower than that of the equivalent, newly manufactured smartphone – and removes the need to extract 76.9 kg of raw materials.¹ We offer customers high quality and competitively priced refurbished smartphone ranges in the UK, Turkey, and Vodacom.

The telecommunications sector is characterised by a high level of competitive intensity, with many alternative providers giving customers a wide choice of suppliers. In each of the countries in which we operate, there are typically three or four mobile network operators (‘MNOs’), such as Vodafone, which own their own network infrastructure, as well as several resellers that procure network services from MNOs on a wholesale basis.

Operators face significant investment cycles in the context of ever-increasing levels of demand for network capacity and deflationary prices. Where industry costs are expected to increase, it is part of the competitive process that operators individually start to consider their options. Operators, including Vodafone, need to ensure they are able to keep up with the increasing need for further investment in network infrastructure to enable societies to remain connected, as well as the increasing prices being passed on from their vendors and suppliers (e.g. energy providers, network equipment manufacturers) in the current inflationary environment. The options available to operators include cost saving initiatives, such as entering into active and/or passive network sharing arrangements, acquisitions of attractive businesses belonging to other operators and adjustments to commercial practices, including pricing.

Fixed telecoms markets in most countries are still dominated by the historic incumbent operator (typically the former state-owned operator), in particular at the wholesale level. Access to many wholesale services from the incumbent, such as fixed access and leased lines, is still regulated in most countries.

Despite the inherently complex nature of the telecommunications sector and the rapidly changing market dynamics, there have been relatively few examples of anti-competitive behaviour or accusations made against Vodafone in recent years.

Historically, in cases where Vodafone was found to have engaged in anti-competitive conduct, penalties were relatively low.

Whilst there were no fines imposed by competition authorities against Vodafone in FY23, a complaint was lodged with the German Federal Cartel Office by 1&1 against Vodafone Germany. 1&1 is an MNO in Germany and a relatively new entrant. It entered into an agreement with Vantage Towers in December 2021 for Vantage Towers to supply a certain number of towers, including an initial target by end of 2022. For a variety of reasons, the initial target has had to be delayed to the end of 2023 and 1&1 has submitted a complaint to the German competition authority (Bundeskartellamt). 1&1 is arguing, in particular, that Vodafone Germany has leveraged its relationships with Vantage Towers to prevent Vantage Towers from delivering under its contract with 1&1 with the goal of frustrating 1&1’s rollout to gain a competitive advantage. The investigation is still at a very early stage.

During FY23, there were also a number of developments with regard to competition law matters (investigations and/or litigation) that had originated in previous years.

Portugal

Online search advertising (Google Adwords): In July 2020, the Portuguese Competition Authority (‘PCA’) issued a Statement of Objections to Vodafone and other Portuguese telecommunications operators. The PCA alleged that the operators had entered into an anti-competitive agreement to limit competition in advertising on the Google search engine which, in turn, restricted competition in various retail telecommunications markets. Vodafone Portugal is vigorously defending itself and submitted a written defence and evidence in support of its case to the PCA in October 2020. The investigation is ongoing and the PCA has recently notified Vodafone Portugal of its decision to extend the deadline for concluding its investigation until the end of 2023.

Pay TV advertising (TV adverts): In August 2020, the PCA initiated an investigation on the basis of news in the media regarding the joint commercialisation and implementation of a 30-second advertising spot before Pay TV content by Pay TV operators MEO, NOS, Vodafone Portugal and Accenture. Prior to launching the service, the parties had joint meetings with the PCA to present the project and to address possible competition issues. In December 2021, the PCA issued a Statement of Objections accusing the Pay TV operators of anticompetitive conduct. Vodafone Portugal is vigorously defending itself and submitted a written defence and evidence in support of its case to the PCA in March 2022. The investigation is ongoing.

UK

Phones 4U litigation: In December 2018, the administrators of former UK indirect seller, Phones 4U, sued the three main UK mobile network operators (‘MNOs’), including Vodafone UK, and their parent companies. The administrators allege a conspiracy between the MNOs to pull their business from Phones 4U thereby causing its collapse. The first trial on liability took place in May-July 2022. Vodafone vigorously defended the claim, and is waiting to receive the judgement, which is expected to be issued in 2023. Further information about this case is provided in the Group’s Annual Report for the financial year ended 31 March 2023 on page 199.

We use various tools and techniques to measure our customers’ user experience on our mobile and fixed access networks. Part of our approach involves the use of independent third-party benchmark providers who conduct regular active field-testing on our behalf in the markets where we operate.

Mobile networks

Vodafone uses the industry-recognised benchmark provider to perform annual testing of all our mobile networks in the markets where we operate. The testing tool is equipped with 5G-capable devices to measure the 5G network performance where available. In locations where 5G coverage is not deployed, the tests are executed using the 4G networks. The testing configuration is defined to represent the achievable customer experience.

The regional averages presented above are calculated by combining the results of the Vodafone markets in scope using the size of the customer base in each market as a weighting factor. The weighted average sustained download speeds for Europe include all our markets in Europe, as well as VodafoneZiggo and Turkey. The average sustained download speeds for Africa reflect data from Vodacom (South Africa).

Fixed networks

Similar to the Mobile measurement methodology, Vodafone engages with independent third-party benchmark companies to regularly test typical customer experience on our Fixed networks.

Active probes connected to Vodafone customers’ routers and internet switches perform regular speed tests to ensure a statistically valid sample across the most penetrated speed tiers/propositions in each market. Network performance is measured to the closest content delivery network for each customer.

Download speeds, defined as data throughput in Mbps, are observed over a 24-hour period and reported as an average according to the underlying access technology, either xDSL or FTTH/Hybrid Fibre Coaxial technologies.

The regional averages presented above are calculated by combining the results of the Vodafone markets in scope using the size of the customer base in each market as a weighting factor. The weighted average sustained download speeds for Europe reflect data for Italy, UK, Spain, Portugal, Greece and Romania only.

Zero-Rating

The practice of zero-rating is where an internet service provider does not ‘charge’ an end-user for access to specified content, applications or websites over the internet. In other words, where an end-user accesses zero-rated content, applications or websites, it does not count towards their data allowance.

Given the benefits it can bring to end-users, Vodafone does zero-rate certain content and services, but only if the zero-rating complies with the prevailing guidance, regulations and laws in the country it is offered. Vodafone offers zero-rating in two common use cases:

Zero-Rated Tariffs

In some markets, where many consumers are increasingly choosing unlimited tariffs, the use of zero-rating is becoming less common. However, for those customers choosing tariffs with finite data allowances, zero-rating offers on specific categories of application or use-case can provide more certainty, as they can use the covered applications without worrying about their data allowance.

Vodafone has therefore offered tariffs that include zero-rating since 2015. These offers were always designed with the prevailing net neutrality rules and guidance in mind. For example, to ensure we adhered to the principles of transparency and openness, any partner that met defined objective and transparent criteria was able to have their content zero-rated as part of our offer. Additionally, to ensure we did not restrict the ‘openness’ of the internet, end-users were only able to access the zero-rated traffic to extent they had a remaining data allowance, meaning they were never in a position where they could only access the ‘zero-rated’ traffic (i.e. there was never a ‘walled garden’ internet experience).

These offers were reviewed by multiple national regulatory authorities since their launch and, whilst certain adjustments were made over time to ensure compliance with the prevailing guidance, they were deemed compliant under the Net Neutrality framework in the EU.

However, in September 2021, the Court of Justice of the European Union (‘CJEU’) issued three judgements that stated that any price-differentiation practice, including zero-rating, that was not application-agnostic was not considered compliant with the EU’s Net Neutrality Regulation. Whilst the detail on how these judgements shall be applied in practice is still under review by the European Body of Regulators (‘BEREC’), it is accepted that, in the EU, all operators, including Vodafone, will ultimately be required to phase out zero-rated commercial offers in the EU.

The CJEU’s judgements and any associated guidance issued by BEREC are not directly applicable outside of the EU. For example, the UK regulator has indicated that Vodafone may continue to offer its zero-rating tariff in the UK on the basis that it was designed to comply with the key principles of net neutrality.

Public Good Zero-Rating

Zero-rating can also be a means to support social good, for example by allowing unrestricted access to content and applications that subscribers rely on. In this sense, zero-rating can be used to enhance data democratisation.

For example, DreamLab is an application that has been developed by the Vodafone Foundation and Imperial College London. The app helps support cancer and coronavirus research by using the processing power of smartphones to help analyse complex data while the device is charging but going unused (typically overnight). In recognition of the societal benefits that this sort of ‘crowd-sourced’ scientific research brings, this application was zero-rated by Vodafone.

In addition, Vodafone zero-rated a number of websites, applications and services for the public good during the COVID-19 pandemic – for example, in Ireland we zero-rated certain government-identified health and education resources, in Greece we zero-rated various education websites to facilitate the government’s online-learning policy during the pandemic, and in the UK we zero-rated access to health resources. In the Czech Republic, a public good zero-rated pass was introduced, called “Pass for Good”, which gave access to health resources, amongst other applications. In Turkey, we also zero-rated remote education and health applications and platforms, on request from public authorities. Post-pandemic, a number of these practices have –– been phased out following discussion with the relevant authorities, but a limited number of practices remain in place.

In some of our markets, the practice of zero-rating such public good services is something that is even becoming mandatory, where the authorities have determined that the zero-rating of essential state and emergency sites provides social benefits. For example, in South Africa, the assignment of high demand spectrum to Vodacom SA in 2021 came with social obligations, including zero-rating mobile content provided by designated Public Benefit Organisations, including gov.za websites. This obligation will apply from as and when the digital migration process in South Africa is completed and operators are able to access the acquired spectrum.

In light of the recent CJEU judgements on zero-rating, telecommunications operators are now waiting for further guidance on whether this will impact public good zero-rating withing the EU. We are actively engaging with our stakeholders and regulators (including BEREC) to emphasise that zero-rating for social benefits is a positive practice.

Content Blocking

As noted above, one of the key principles of net neutrality is that internet service providers should not unjustifiably discriminate against certain traffic, which would include blocking content.

However, operators are permitted to block content under certain circumstances, for example where required under law. This has been of particular relevance to operators in relation to the recent orders issued by the European Union to block content associated with specified Russian media operators. It was confirmed by BEREC that action to block such websites would not be in conflict with the net neutrality principles, and Vodafone has therefore taken action to block the content of these media operators, subject to safeguards required by our internal policies to ensure legality and proportionality of the requirement.

Innovation under Net Neutrality

We are committed to ensuring an internet that is open to all, and where end-users control their experience on the internet.

At the same time, we are seeing substantial changes across the internet value chain, and there is now a significant diversity in terms of the networks, devices, content and types of user. As a result, we are increasingly seeing demand:

• From consumers for different tariff options and packages that best suit their needs;
• From business customers in relation to specific business services, which require guaranteed speeds and quality;
• From content providers, who require their content (such as metaverse or connected mobility applications) to be delivered with a guaranteed quality; and
• From connected devices, which also rely on specific quality parameters.

This demand for differentiation will continue to increase, as end-users seek to make use of the opportunities presented by edge computing and 5G network slicing, which allow for differentiation within networks. Therefore, the ability to provide such differentiated services and commercial propositions will encourage operators to invest in their networks and offer innovative services to businesses and customers, which will in turn help bridge the digital divide.

Vodafone strives to ensure that new and existing services and propositions that take advantage of the latest technologies comply with the prevailing rules and guidance on net neutrality. However, whilst existing guidance, for example from BEREC, has indicated that use cases based on 5G and edge computing can comply with the net neutrality regulation, there remains a degree of uncertainty as the regulations were designed before these technologies were in active use. We continue to work with regulators and policymakers to ensure a clear, unambiguous and innovation and investment-friendly interpretation and application of net neutrality principles is applied across our markets.

The averages presented above are calculated by combining the results for the following Vodafone markets: Germany, Italy, UK, Spain, Portugal, Ireland, Czech Republic, Romania, Albania and Greece.

The number of customer interruptions was calculated by aggregating the number of customers impacted by an interruption to one or more service (Mobile: Voice [2G], Data [3G, 4G] or Fixed: Data and Voice) and for the 28 high-impact and critical incidents within scope. If any customers experienced more than one interruption to one or more services during the year, each individual interruption is reflected in the calculations.

System average interruption frequency

We calculate the system average interruption frequency by aggregating all the customer interruptions within the reported incidents and dividing this by the number of unique customer accounts with active service during the period.

Customer average interruption duration

The Standards suggest that the average interruption duration should be calculated by aggregating the total downtime (in hours) and dividing this by the number of customer accounts affected during the period.

As explained above, we do not consider this metric to be meaningful and we have therefore calculated and presented two alternative metrics which we believe provide a more meaningful view of typical disruption duration for affected customers and our entire customer base.

1. Weighted average disruption duration for affected customers; and
2. Weighted average disruption duration for entire customer base.

Our approach to managing the risk of technology failure is to ensure that we reduce the impact of disruptions within our risk appetite. This is achieved by categorising our operations and services according to business criticality and customer impact. Business continuity and disaster recovery plans are then created for critical operations and datacentres. These plans are reviewed at least annually and regularly tested.

Our Business Continuity program and related polices are aligned with the ISO 22301 international standard. In addition, seven markets and our shared services entities also hold equivalent local certifications. We also partner with the Business Continuity Institute (‘BCI’), ensuring that our Business Continuity professionals are aware of BCI’s Good Practice Guidelines and have access to specific training available through our global learning platform.

Our data centres are situated across multiple sites and our network infrastructure is designed to ensure that we can quickly and easily recover from any hardware faults. Data is replicated in real-time, backed-up and secured. Should a major technology failure occur, we are able to automatically transition to another datacentre to maintain service availability for our customers. We have a continuous process to learn from events and to apply necessary improvements across our footprint.

In the event of a major incident, we follow the Group’s global business continuity and disaster recovery plans, as well as our established emergency and crisis management plans and incident management processes. Communications processes are designed to escalate major incidents/disasters to key employees, as well as establish critical communications teams to manage the disaster. We strongly believe in the importance of prevention; however, we also believe that incidents should be treated as an opportunity for learning.

Our technology resilience policy is applied across all markets and business areas that operate technology. The technology resilience policy includes a number of key controls, such as:

• Physical site risk assessments: All our sites and business operations are regularly reviewed for environmental (e.g. flooding/climate change), physical security, infrastructure and technology risks. Mitigation plans such as flood defences, fire suppression systems or perimeter fencing, are then applied to ensure risks are appropriately managed.
• Service level targets: Critical business operations are identified and evaluated regularly to ensure they are recoverable within a specified timeframe (for example, requiring that 95% of services are recoverable within 4 hours). Service level targets apply to individual mobile sites, IT applications, data centres, and services such as video and payment services.
• Continuity testing: All our sites are required to complete simulated site-loss tests on an annual basis. This must include a live-traffic component and teams are required to produce detailed reports and reflect on lessons learned. Local markets are also required to test individual components, applications and services regularly.
• Outsourced Activity Control: Where critical assets in scope of the policy (sites, infrastructure, service or applications) are outsourced, our third-party providers are required to apply our policy requirements and controls.

To address new emerging technology failure scenarios, in FY23 the scope of our technology resilience policy was expanded to international and subsea networks, virtual infrastructure vulnerabilities and GPS resilience. Mitigation plans have been approved and are currently undergoing deployment.

Additionally, Vodafone Group holds insurance policies that cover the costs of damage to infrastructure and resulting network interruption, in whole or in part. Vodafone’s cyber liability insurance covers the costs for of technology failure through cyber attacks, viruses, or programming errors and any resulting data loss.

Our culture – the ‘Spirit of Vodafone’ – outlines the beliefs we stand for and the behaviours that enable our strategy and purpose. We foster our culture by developing individual habits that reinforce our Spirit, invest in leadership development to role model our beliefs, and ensure systems, processes and milestone activities are aligned with the Spirit of Vodafone. We measure our progress and identify where to take action via a bi-annual employee survey called ‘Spirit Beat’.

¹The employee engagement index is based on a weighted average index of responses to three questions: satisfaction working at Vodafone, experiencing positive emotions at work, and recommending us as an employer.

Our commitment to diversity and inclusion is reflected across our global policies and principles, such as our Code of Conduct and our Fair Pay principles. Our second Fair Pay principle – ‘free from discrimination’ – requires that our pay should not be affected by gender, age, disability, gender identity and expression, sexual orientation, race, ethnicity, cultural heritage or belief. We annually compare the average position of our men and women against their market benchmark, grade and function to identify and understand any differences and take action if necessary.

To improve gender diversity within our organisation, we have introduced a number of policies and programmes to ensure we are creating an inclusive culture. These include global parental leave policy, which supports families to share caring responsibilities in the home, flexible and hybrid working policies, our Domestic Violence and Abuse policy, and our ReConnect returner programme. Targets regarding women in management have also been embedded as part of broader Environmental, Social, and Governance (‘ESG’) measures in our Long-Term Incentive Plans for our Executive Committee and Senior Leadership Team. All of these initiatives aim to support the retention of women in our business as well as enable progression into more senior roles.

Race, ethnicity, and cultural heritage (‘REACH’)

To better understand representation across the organisation and inform our diversity and inclusion programmes, in November 2020 we launched the ‘#CountMeIn’ initiative which encourages employees to voluntarily self-declare their diversity demographics. These include race, ethnicity, disability, sexual orientation, gender identity and caring responsibilities, in line with local privacy and legal requirements. On this basis we were able to set ethnic diversity targets, which are summarised below.

• Group: By 2030, 25% of our global senior leadership team (encompassing 163 of our most senior leaders in Europe & Africa) will come from ethnically diverse backgrounds. This compares to 18% in March 2023 (FY22: 18%).
• UK: By 2025, 20% of UK-based senior leadership and management will come from Black, Asian, or other diverse ethnicities, with 4% to be Black. This compares to 16% and 2% respectively in March 2023 (FY22: 15% and 1% respectively).
• South Africa: By 2030, 75% of South African-based senior leadership and management will come from ethnically diverse backgrounds. This compares to 67% in March 2023 (FY22: 64%).

In addition to the above, 18% of senior leadership positions are from ethnically diverse backgrounds.