Interim Results - Part 1

RNS Number:0568U
Vodafone Group PLC
14 November 2000

PART 1

VODAFONE GROUP PLC                    
INTERIM RESULTS FOR THE SIX MONTHS TO 30
SEPTEMBER 2000

FINANCIAL HIGHLIGHTS

                                        Six months   Six months    Increase
                                                to           to  /(decrease)
                                                30           30           
                                         September    September           %
                                              2000         1999
                                                                           
Pro  forma proportionate basis - 
  mobile businesses  (1) (2)           
                                                                
Proportionate customers at period end   65,493,000   42,298,000           55
                                                                
Proportionate turnover                    #10,170m      #7,680m           32
                                                                
Proportionate EBITDA                                            
- before exceptional items (3)             #3,282m      #2,657m           24
                                                                
Proportionate Group operating profit                            
- before goodwill and exceptional                               
    items (3)                              #2,302m      #1,928m           19
                                                                
                                                                
Statutory basis (1)
                                                                
Total Group operating profit                                    
- before goodwill and exceptional                               
    items (3)                              #2,420m      #1,015m          138
                                                                
Profit on ordinary activities before                            
  taxation
- before goodwill and exceptional                               
    items (3)                              #1,823m        #879m          107
                                                                
Basic earnings/(loss) per share                                 
- before goodwill and exceptional                               
     items (3)                               1.70p        2.25p         (24)
- after goodwill and exceptional                                
    items (3)                              (7.85)p      (0.31)p
                                                                
Dividend per share                          0.688p       0.655p           5


(1)Pro   forma  proportionate  customer  and  financial  information   is
calculated    on    the   basis   that   the   merger    with    AirTouch
Communications,  Inc.  (now  Vodafone  Americas  Asia,  Inc.)   and   the
acquisition  of  Mannesmann  AG took place on  1  April  in  each  period
presented,   which   is  further  described  on   page   27.    Statutory
financial   information   is  calculated  on  the   basis   required   by
accounting    standards   and   includes   the   results   of    AirTouch
Communications,  Inc.  from 30 June 1999, the  date  of  closure  of  the
merger,  the  results  of  Verizon  Wireless  from  3  April  2000,   the
date  on  which  the  Group's  US wireless  assets  were  contributed  to
the  joint  venture  partnership,  and  the  results  of  Mannesmann   AG
from  12  April  2000,  the  date  that  clearance  for  the  acquisition
was received from the European Commission.

(2)Pro   forma  proportionate  customer  and  financial  information   is
presented   for   the   Group's   mobile  telecommunications   businesses
only,  excluding  paging  customers  and  businesses  sold  or  held  for
resale.

(3)Exceptional  items  comprise  exceptional  reorganisation  costs   and
profit   on   disposal   of   fixed   asset   investments.    Exceptional
reorganisation  costs  in  the current period  are  in  relation  to  the
formation  of   Verizon  Wireless   and  the  acquisition  of  Mannesmann
AG.    Exceptional  reorganisation  costs  in  the  prior  period  relate
to the merger with AirTouch Communications, Inc.



Group Highlights:

*  Excellent progress following the acquisition of Mannesmann  and
   formation  of Verizon Wireless in the United States,  reflected
   in  substantial  increases in mobile  pro  forma  proportionate
   turnover  (up 32%), EBITDA (up 24%), operating profit (up  19%)
   and customer numbers (up 55%).

*  Worldwide   customer   base  of  approximately   65.5   million
   proportionate  customers,  including  the  addition   of   12.2
   million  net  new  customers in the  six  month  period  to  30
   September 2000.

*  116.2  million  customers in ventures  the  Group  controls  or
   invests in.

*  Mobile  pro  forma  proportionate  EBITDA,  before  exceptional
   items,  of  #3,282m,  up 24%. Excluding D2  in  Germany,  which
   connected  over  5.4 million net new customers in  the  period,
   mobile pro forma proportionate EBITDA increased by 39%.

*  Mobile  data, which includes Short Message Service (SMS),  data
   and  internet services, accounted for 5.5% of Group ARPU during
   the  period, equivalent to annual proportionate revenue of over
   #1 billion.

*  Substantial  progress on the integration  of  Mannesmann,  with
   agreements  for  the sale of non-core assets for  an  aggregate
   value of approximately #35 billion.

*  Group   net  debt  at  30  September  2000  of  #13.2   billion
   represented  8.5%  of the Group's market capitalisation,  after
   payment  for  3G  licences  in  the  UK,  the  Netherlands  and
   Germany.

*  Acquisition  of an approximate 2% ownership interest  in  China
   Mobile  for  US$2.5  billion  and  agreement  of  terms  for  a
   strategic  alliance in mobile services, technology,  operations
   and management.

*  Strategic  partnership with Swisscom Mobile  announced  and  an
   agreement  to acquire a 25% equity interest in Swisscom  Mobile
   for  Swiss  francs 4.5 billion (#1.8 billion), to  be  paid  in
   cash or shares, or a combination of both.


Chris Gent, Chief Executive of Vodafone Group Plc, commented:

"These first half results clearly demonstrate that, even with  the
better  than  expected  growth  in  customer  numbers,  the  Group
continues to report strong increases in profitability in  all  its
operating regions. In addition, we are particularly encouraged  by
the  initial trends we are seeing with respect to mobile data  and
internet  usage, even prior to the introduction of the  more  user
friendly, enhanced technologies that we will be rolling out during
the course of the next year.

With the majority of UMTS licences now purchased, and our disposal
programme largely complete, the strength of our balance sheet will
enable  us  both  to  continue to fund the ongoing  needs  of  the
business  and at the same time take advantage of opportunities  to
expand strategically and geographically as they arise.

We expect significant improvements in the percentage growth figures
for both operating profit and EBITDA in the Group's full year
figures."

Regional Highlights:

Continental Europe

*  Pro  forma proportionate customers increased by 31% in the  six
   month period to over 37.4 million.

*  Record  customer  connections  by  D2,  which  remained  market
   leader  in  Germany,  with  an  approximate  49%  increase   in
   customers during the six month period to over 16.5 million.

*  Excluding  the  results of D2, mobile pro  forma  proportionate
   EBITDA,  before  exceptional items, increased by  approximately
   37% compared with the corresponding period.

*  3G  licences  awarded  in Germany, Italy, the  Netherlands  and
   Spain.

*  Vizzavi  Europe,  Vodafone's  and VivendiNet's  European  joint
   venture  multi-access  portal  company,  launched  the  Vizzavi
   brand in France, the UK and the Netherlands.

United Kingdom

*  Market leader with over 10.2 million customers, an increase  of
   16%  in  the  six  month period.  Share of UK corporate  sector
   increased to 54%.

*  Proportionate EBITDA increased by 10% to #495m.

*  Continued strong growth of SMS, with over 160 million  messages
   carried  on  the  network in September 2000, compared  with  49
   million last year.

United States

*  Successful  integration of the Group's US wireless assets  into
   Verizon  Wireless,  a  new joint venture partnership,  creating
   the  market  leader with a nationwide network serving  over  26
   million   customers  and  covering  almost  90%   of   the   US
   population.

*  Proportionate EBITDA, before exceptional items,  of  #815m,  an
   increase  of  41% over the corresponding period for  AirTouch's
   US wireless assets.

*  Introduction of a new national mobile internet access  service,
   Mobile  Web, with over 0.4 million active customers at the  end
   of the period.

Asia Pacific

*  Proportionate  customers of 4.9 million,  an  increase  of  19%
   during  the period. Proportionate EBITDA of #285m, a pro  forma
   increase of 128% on the corresponding period.

*  Revenues from messaging and web usage in Japan now account  for
   over  9%  of  total  revenues,  with  web  customer  ARPU   now
   exceeding SMS customer ARPU. 3G licence awarded in July 2000.

Middle East and Africa

*  40%  increase in proportionate customers during the  period  to
   1.7  million, reflecting continued strong growth of the Group's
   profitable operations in Egypt and South Africa.


CONTINENTAL EUROPE

Following  the  completion of the Mannesmann transaction  on  12  April
2000,   good   progress  has  been  made  in  integrating  Mannesmann's
telecommunications interests into the Group.   Proportionate  customers
in the Group's mobile telecommunications businesses in Europe increased
to  37,426,000 at 30 September 2000, representing pro forma  growth  of
70%  on the comparable period last year.  The region's total pro  forma
proportionate operating profit, before goodwill and exceptional  items,
increased to #1,093m and total pro forma proportionate EBITDA increased
by  10%  to #1,593m.  This includes the results of D2, where connection
costs  on  record  customer growth reduced EBITDA.  Excluding  D2,  pro
forma  proportionate  EBITDA  for  the  period  to  30  September  2000
increased by 37%.

D2 - Germany

Financial Highlights                   Six months   Six months     Increase
                                               to           to  /(decrease)
                                     30 September           30            %
                                             2000    September
                                                          1999
                                                               
Pro forma proportionate customers      16,400,000    8,128,000         102
                                                               
Pro forma proportionate turnover          #2,056m      #1,655m          24
                                                               
Pro forma proportionate EBITDA              #620m        #740m         (16)
- before exceptional items                                     
                                                               
Pro forma proportionate EBITDA                30%          45%          
  margin
                                                               

The period to 30 September 2000 saw rapid expansion of the mobile phone
market in Germany. D2 had a record 5,420,000 net connections during the
period, maintaining its market leadership and increasing  proportionate
customers  by  49%  to  16,400,000. Pro  forma  proportionate  turnover
increased   by   24%  to  #2,056m,  compared  with  #1,655m   for   the
corresponding period. Pro forma proportionate EBITDA before exceptional
items was #620m, a reduction of 16% compared with last year, and EBITDA
margin  decreased from 45% for the corresponding period to  30%,  these
reductions  being due to connection costs arising from the  exceptional
level  of  new  customers. The underlying trading  performance  of  the
business was very strong. The EBITDA margin excluding connection  costs
was 55% for the six months to 30 September 2000.

In  the  first half, total churn was 10.5% compared with 14.8%  in  the
year to 31 March 2000. This was due in part to the increased proportion
of  prepay  customers connected to the network.  At 30 September,  over
50%  of  the  total base was connected to the prepay tariff,  "CallYa",
compared  with over 30% at 31 March 2000.  Whilst ARPU has declined  to
EUR 487, as a result of the mix of customers, D2's ARPU is still above the
level of most comparable mature networks.  Cost to connect increased in
the  six  months  to  30  September 2000, as D2 maintained  its  market
leadership despite aggressive market activity by its main competitor.

During the period, D2 was the first mobile operator in Germany to offer
on-line services to its customers, enabling customers subscribing to D2
services to choose tariffs and access customer service information  via
the  Internet.  D2 offers its customers who roam to the major  European
holiday  destinations (such as Italy, Greece and France)  virtual  home
network functionality, enabling them to dial their customer service  in
the same way as when at home.

D2 was also the first mobile network in Germany to carry General Packet
Radio Service (GPRS) calls during the period to 30 September 2000,  and
commercial  service  is expected to be launched in the  first  calendar
quarter  of 2001, subject to handset availability.  D2 had over 250,000
active  WAP users at 30 September 2000 and, in early October,  its  WAP
portal  was judged by "Connect" magazine to be the best mobile internet
portal in Germany.

In  August  2000, D2 was successful in acquiring a licence  to  operate
UMTS  services  in  Germany for EUR 8.4 billion.   This  was  one  of  six
licences  awarded,  including licences to two new operators.   Vodafone
believes that D2 is better placed than its competitors to capitalise on
this  opportunity with the quality of its existing network.  D2 expects
to launch service in 2002, subject to handset availability.


OPI - Italy

Financial Highlights                  Six months   Six months           
                                              to           to   Increase
                                              30           30          %
                                       September    September
                                            2000         1999
                                                                        
Pro forma proportionate customers     10,349,000    6,784,000        53
                                                               
Pro forma proportionate turnover         #1,137m        #915m        24
                                                               
Pro forma proportionate EBITDA             #515m        #362m        42
                                                               
Pro forma proportionate EBITDA               45%          40%          
  margin
                                                               

In the period to 30 September 2000, Omnitel Pronto Italia (OPI), one of
four  GSM network operators in Italy,  also saw strong customer growth.
Its  total  customer base increased to 13,591,000, with net connections
in  the six month period of 2,369,000 customers, representing growth of
21%.  OPI reported growth in pro forma proportionate turnover of 24% to
#1,137m   in  the  six  months  to  30  September  2000.    Pro   forma
proportionate  operating profit before goodwill  increased  by  33%  to
#395m, whilst pro forma proportionate EBITDA increased by 42% to #515m.

OPI recorded total churn in the first half of 12% compared with 13%  in
the  year  to 31 March 2000.  Due to the relatively constant proportion
of prepay customers in the base (89% at 30 September 2000 compared with
87%  at 31 March 2000) OPI's ARPU, which was EUR 367 for the twelve months
to  30  September 2000, is less exposed to the mix dilution experienced
by many large European mobile operators.  OPI continues to benefit from
lower  cost  to connect than networks of equivalent size  elsewhere  in
Europe.

OPI is pursuing its strategy of offering increased data services to its
customers. SMS usage has steadily increased to average levels in excess
of  5  million outgoing messages per day. OPI launched the first  music
portal during the period, in addition to its voice portal services  and
its on-line shopping mall.
   
The  Italian  Government is in the process of issuing five licences  to
operate UMTS services.  Following completion of the auction process  on
23 October 2000, OPI has been assigned a UMTS licence for approximately
EUR 2.5 billion.
   
Mobile operations in the rest of Continental Europe

Financial Highlights                 Six months      Six months          
                                             to              to  Increase
                                   30 September    30 September         %
                                           2000            1999
                                                                
Pro forma proportionate customers     10,677,000      7,046,000        52
                                                                
Pro forma proportionate turnover         #1,454m        #1,249m        16
                                                                
Pro forma proportionate EBITDA             #452m          #343m        32
                                                                
Pro forma proportionate EBITDA                                  
  margin                                     31%           27%
                                                                

Libertel  NV,  the  Group's 70% subsidiary, is  one  of  five  cellular
operators in the Netherlands. In July 2000, Libertel was successful  in
acquiring  one  of  five  licences to  operate  UMTS  services  in  the
Netherlands,  obtaining one of the largest frequency allocations  (2x15
MHz) for a total of EUR 0.7 billion.

Libertel's  customer  base  at  30 September  2000  was  2,983,000,  an
increase  of 22% in the period. Libertel received a rating as the  best
network  in  the Netherlands in an independent study conducted  in  the
second  quarter  of  2000.  It has continued  to  upgrade  its  prepaid
service, which represented approximately 69% of its customer base at 30
September  2000, with the introduction in August 2000 of direct  top-up
by credit card, by phone or on-line.

In  early  September,  Libertel tested its GPRS capability,  the  first
mobile  network  to  do so in the Netherlands.  Commercial  service  is
expected  to  be  launched before the end of 2000, subject  to  handset
availability. Libertel's WAP facilities are being developed through the
network's co-operation with Vizzavi Netherlands, in which it owns a 20%
interest.

Panafon,  the  Group's  55% owned subsidiary in Greece,  increased  its
customer  base  by 16% to 2,060,000 in the six months to  30  September
2000,  consolidating its position as market leader in Greece.   It  has
the only portal in Greece to offer personalised services to all its WAP
customers and was the first to offer a search facility to WAP users.

Telecel,  the Group's 50.9% owned subsidiary in Portugal, reported  net
connections  of  225,000  in  the period and  a  customer  base  at  30
September  2000 totalling 2,020,000, of whom 72% are connected  to  its
prepaid tariffs. Telecel is one of three network operators in Portugal.
Telecel  consolidated  its internet activities  into  TelecelOnline  in
October  2000.   In  addition to strong growth in  SMS  usage,  Telecel
maintained  its  innovative position with the launch of  share  dealing
services for its WAP customers during the first half.

Europolitan, the Group's 71.1% owned subsidiary in Sweden,  reported  a
customer  base  at  the end of September totalling  957,000,  with  net
connections  of  72,000  since  31  March  2000.   In  September  2000,
Europolitan  submitted  an application for  one  of  four  licences  to
operate  UMTS services in Sweden. The Government is expected  to  award
the licences by "beauty contest" before the end of November 2000.

In  line with its innovative data strategy, Europolitan launched mobile
internet surfing capability for all its customers using WAP during  the
period and extended its unified messaging by launching a service  which
translates  e-mails  into voice messages by mobile.   Europolitan  also
signed  agreements  during the first half with a number  of  telematics
operators to develop improved services both in vehicles and for  remote
meter reading.

Since its launch in November 1999, Vodafone Hungary, in which the Group
has  a  50.1% ownership interest, has connected a net 134,000 customers
to  its  network, of whom 87,000 were connected in the six month period
to  30  September 2000.  Network rollout is progressing  well  and  the
company's  reliance on national roaming on existing  networks  has  now
been terminated in the Budapest area.

The  Group's  ownership interest in Societe Francaise du Radiotelephone
(SFR), one of three network operators in France, increased from 20%  to
an  effective  ownership interest of approximately 31.9% following  the
acquisition  of Mannesmann.  This additional ownership interest  arises
from  Mannesmann's  15%  shareholding in  Cegetel,  which  has  an  80%
shareholding in SFR. In the six month period to 30 September 2000,  SFR
increased  its  customer base by over 13% to 8,944,000.   Approximately
40% of SFR's customers are connected to its prepaid service.

Airtel  Movil, in which the Group has a 21.7% shareholding, is  one  of
three cellular network operators in Spain. Airtel connected 966,000 net
new  customers  during  the  six month period  to  30  September  2000,
increasing  its closing customer base to 6,590,000.  Approximately  59%
of Airtel's customers are connected to its prepaid tariffs.

Through  a  number  of  agreements entered into in  January,  July  and
September  2000 the Group has agreed to acquire an additional  interest
of  52% in Airtel, increasing its holding to a controlling interest  of
73.7%. Subject to the receipt of regulatory approvals, the transactions
are expected to complete by the end of 2000.

Other Operations

The  Group's  other operations in Europe mainly comprise  interests  in
Arcor,  the  German  fixed line business, which had  over  1.8  million
contract customers at the end of September, Telecommerce, the German IT
and  data services business and Vizzavi Europe, the Group's 50%  multi-
access consumer portal joint venture with VivendiNet.

Pro  forma proportionate turnover for these operations was 9% lower  at
#372m,   reflecting  the  impact  of  exchange  rate   movements,   and
proportionate EBITDA was maintained at #6m in the six months  ended  30
September 2000.  Pro forma proportionate operating losses reduced by 4%
to #92m, and included start-up losses of #10m in Vizzavi Europe.


UNITED KINGDOM

Financial Highlights                  Six months    Six months            
                                              to            to    Increase
                                    30 September  30 September           %
                                            2000          1999
                                                               
Customers                             10,240,000     6,865,000          49
                                                               
Proportionate turnover                   #1,662m       #1,350m          23
                                                               
Proportionate EBITDA                       #495m         #448m          10
                                                               
Proportionate EBITDA margin                  30%           33%          
                                                               

The UK mobile phone market grew by 7.4 million net new customers in the
six  months to 30 September 2000, resulting in a total market  of  34.4
million customers.  Market penetration is 58% compared with 46% at  the
beginning of the year.

Vodafone  UK  has  maintained  its  clear  leadership  in  this  highly
competitive  market  place with 1,449,000 net  additions,  closing  the
period  with a customer base of 10,240,000 and a market share  of  30%,
1.5 million customers ahead of its nearest competitor.  The company has
focused on high value customers, with its share of the corporate sector
increasing  to 54%. Proportionate turnover in the UK increased  by  23%
from  #1,350m to #1,662m, with proportionate EBITDA increasing  10%  to
#495m.

Strong  growth  in the contract customer base continued throughout  the
period,  resulting  in net additions of 232,000 and  giving  a  closing
contract  customer base of 3,944,000.  At 30 September  2000,  Vodafone
UK's  service  provider companies accounted for  61%  of  its  contract
customer  base. The addition of 154,000 contract customers in the  July
to September period was the highest since the quarter to December 1998.

The  contract  customer base continues to be profitably  managed,  with
ARPU  increasing from #421 (#554 before trade discounts) for the twelve
months  ended  31 March 2000 to #424 (#557 before trade discounts)  for
the  twelve months to 30 September 2000. Cost to connect rose  to  #115
for  the  six  months ended 30 September 2000 from #94 for  the  twelve
months  ended 31 March 2000, reflecting the competitive market and  the
connection of higher value customers in the period.

Prepaid products continued to drive the growth in the UK mobile market.
The  introduction of new tariffs and products stimulated  this  growth,
with  the  result that 1,217,000 net connections were made in  the  six
months  ended  30  September  2000. Pay as You  Talk  (PAYT)  customers
totalled  6,296,000  at  30  September  2000  and  represented  61%  of
Vodafone's UK customer base.

Prepaid ARPU has declined from #175 at 31 March 2000 to #165 due to the
impact of lower usage customers being added to the base.  PAYT cost  to
connect  for  the six months ended 30 September 2000 was  #56  compared
with  #50 in the twelve months to 31 March 2000, reflecting competitive
pressures.

Vodafone  UK continues to enhance the service provided to its customers
through  improved  call-centre facilities,  an  increased  high  street
presence  through  the  addition of 34 new  shops  during  the  period,
bringing  the  total  to 306 at 30 September 2000,  and  investment  in
network  quality.  In the six months to 30 September 2000,   #275m  was
spent on network infrastructure including the installation of 540  base
stations,  bringing  the total in operation to 7,240.   These  measures
have contributed to a reduction in network churn in the last six months
to  24.1%,  compared with 28.3% in the previous six months,  reflecting
improving levels of customer satisfaction.

SMS  experienced strong growth in the period.  The number  of  messages
being  carried on the network in September 2000 increased to  over  160
million  compared  with 49 million in September 1999. Successful  field
trials of GPRS have been undertaken and full customer trials started in
November, with live network rollout already under way. GPRS is expected
to be in commercial service during the first half of 2001.

Following  the  award of a 3G licence in April 2000, an  implementation
programme  has commenced with the commercial launch of 3G  services  in
the UK currently anticipated for April 2002.

The  UK  internet  portal experienced increasing  activity  during  the
period,  with  over  75,000 active customers  being  registered  at  30
September  2000.   Migration  to the new Vizzavi  multi-access  portal,
which  offers a range of services that will bring information from  the
Internet  to  the  PC,  mobile phone and  WAP  mobile,  took  place  in
September.  Over the next few months further new content services  will
be  added and the UK will adopt the Vizzavi platform by the end of this
year.

UNITED STATES

On  21  September  1999, Vodafone, Bell Atlantic and GTE  announced  an
agreement  to  combine their US wireless assets to create  the  largest
mobile  telecommunications operator in the United  States.   The  first
stage of the transaction, involving the contribution of the US wireless
assets of Vodafone and Bell Atlantic, was completed on 3 April 2000 and
the  combined  entity was launched as Verizon Wireless.  Following  the
completion  of  the  merger of Bell Atlantic and GTE  to  form  Verizon
Communications,  the second stage of the transaction was  completed  by
the  contribution of the US wireless assets of GTE to Verizon  Wireless
on  10  July  2000, creating a nationwide network on a  single  digital
technology, covering almost 90% of the US population and 96 of the  top
100 US mobile telecommunications markets.  Vodafone owns a 45% interest
in the new venture.

Verizon  Wireless is the leading mobile telecommunications provider  in
the  United  States in terms of number of customers, network  coverage,
revenues and cash flow.   At 30 September 2000, Verizon Wireless had  a
total mobile telecommunications customer base of 26,282,000.

Financial Highlights                  Six months    Six months            
                                              to            to    Increase
                                    30 September  30 September           %
                                            2000       1999(1)
                                                               
Proportionate customers               11,212,000    9,138,000           23
                                                               
Proportionate turnover                   #2,414m      #1,751m           38
                                                               
Proportionate EBITDA                       #815m        #576m           41
- before exceptional items                                     
                                                               
Proportionate EBITDA margin                  34%         33%          
                                                               

(1)     Proportionate customers, turnover and EBITDA for the period  to
30  September  1999 are presented on a pro forma basis for  the  merger
with  AirTouch,  and  comprise the pro forma proportionate  results  of
AirTouch's US wireless assets.


Pro forma proportionate EBITDA, before exceptional items, was #815m for
the  six month period to 30 September 2000, representing a 41% increase
over  the corresponding period for AirTouch's US wireless assets.   The
increase  in the pro forma proportionate EBITDA margin to 34%  reflects
the underlying profitability of the new venture.

Growth in the number of digital customers, which was stimulated by  new
digital  tariff  plans, SingleRate national pricing and bigger  bundled
minute  options,  has  met expectations.  Digital  customers  represent
almost half of the total customer base.

The average cost to connect for the six months to 30 September 2000 was
#132.  Although the costs to connect customers from analogue to digital
is higher, due to handset costs and subsidies, increased utilisation of
company-owned retail outlets has partially offset pressures on margins.
Sales efforts have actively focused on selling tri-mode handsets to new
customers  as well as existing customers.  The impact of an  increasing
number  of customers on the network with tri-mode handsets will improve
margins by providing an opportunity to reduce roaming expenses.

Average  monthly ARPU for the six months to 30 September 2000  was  #32
(giving  an annualised ARPU of #384).  Increased ARPU is expected  from
continued digital migration and the impact of a greater array of  value
added  services  such as Web access.  Higher monthly  recurring  access
charges are a function of increased digital customers. However, in  the
short term, per minute usage revenue has decreased due to large bundled
minute plans.

Annualised  churn on Verizon Wireless's networks during the six  months
to  30  September  2000 was 30%.  Innovative churn management  programs
such  as  "New  Every  Two" were launched to drive  increased  customer
loyalty  by  addressing  equipment upgrades.  Digital  subscribers  are
eligible  to  receive a free digital handset, or handset credit,  after
two years of service with a two year contract renewal.

A  national internet access service, Mobile Web, was introduced  during
the  period. Users are able to personalise the information they receive
directly  from their handset or via the MyVZW.com web site. Mobile  Web
customers  can  access  a variety of web sites  ranging  from  personal
finance  and shopping to news and entertainment. At 30 September  2000,
Verizon  Wireless had over 500,000 data customers, including more  than
400,000 Mobile Web customers.

Verizon Wireless has indicated its intention to make an initial  public
offering of a minority stake in the partnership. It will monitor market
conditions to assess the optimal timing for such an offering.


ASIA PACIFIC

Financial Highlights                   Six months    Six months             
                                               to            to     Increase
                                     30 September  30 September            %
                                             2000       1999(1)
                                                                
Proportionate customers                 4,904,000     3,421,000           43
                                                                
Proportionate turnover                    #1,234m        #582m           112
                                                                
Proportionate EBITDA                        #285m        #125m           128
                                                                
Proportionate EBITDA margin                   23%          21%          
                                                                

(1)    Proportionate customers, turnover and EBITDA for the period to  30
September  1999  are presented on a pro forma basis for the  merger  with
AirTouch.


The  Group's  interests in the Asia Pacific region  primarily  comprise
Vodafone Pacific and the J-Phone Group. At 30 September 2000, the Group
had  4,904,000  proportionate customers in  the  Asia  Pacific  region,
representing  an increase of 19% in the six month period. The  region's
pro  forma proportionate turnover and EBITDA increased by 112% and 128%
respectively,  compared with the corresponding  period,  including  the
effect  of  increases in the Group's shareholdings in the nine  J-Phone
companies  in  Japan  during the six months ended  30  September  1999.
Eliminating  the  impact of these stake increases, the  growth  in  pro
forma  proportionate customers and EBITDA compared with the  six  month
period to 30 September 1999 is 37% and 49%, respectively.

Vodafone Pacific

Vodafone Pacific, comprising the Group's 91% interest in the Australian
operations, 100% interest in New Zealand operations and a 49%  interest
in  Vodafone Fiji, experienced a period of strong customer, revenue and
EBITDA  growth. Proportionate customers increased by 24%  to  2,233,000
during  the  six  month period, with significant  increases  in  market
penetration  for each business.  Proportionate EBITDA margin  increased
to  25% for the period to 30 September 2000, compared with 21% for  the
corresponding  period, on proportionate turnover of  #320m  and  #243m,
respectively.

Australia  and  New  Zealand have strongly enhanced their  services  to
contract  and  prepaid  customers with  the  introduction  of  a  fully
integrated  mobile  and fixed line internet portal, "My  Vodafone".  My
Vodafone   is  a  new  mobile  data  and  internet  service   providing
personalised  information and entertainment services,  as  well  as  e-
commerce  capabilities.   SMS  service  was  also  introduced  to  both
contract and prepaid customers, enabling customers to send and  receive
SMS  text messages across networks.  Since launch, My Vodafone and  SMS
have led to dramatic growth in data traffic, with more than one million
text messages carried on peak days in both Australia and New Zealand.

With   the  Globalstar  fully  integrated  GSM/satellite  service   now
operational  in  Australia,  Vodafone  provides  100%  coverage  across
Australia with its mobile phone service - the only carrier to do so.

Vodafone Pacific did not launch its proposed initial public offering in
the  first  half  of this financial year due to market  conditions  and
volatility   in  the  global  equity  markets,  particularly   in   the
telecommunications sector. The Group will continue  to  monitor  market
conditions in order to assess the optimal timing for any such offering.


Japan

During  the period, Vodafone and its partners undertook a restructuring
of their ownership interests in the J-Phone Group of companies.  The J-
Phone  Group encompassed nine operating companies, together offering  a
nationwide  service  in Japan.  On 1 October 2000, the  nine  operating
companies  were merged into three regional companies, creating  further
opportunities  for  the  J-Phone Group to increase  its  share  of  the
rapidly  changing  Japanese  market and for potential  cost  synergies.
Following  completion  of  the  restructuring,  the  Group's  ownership
interests (both direct and indirect) were broadly unchanged.

Despite  intense competition, J-Phone added over one million  customers
in  the  six  month  period to 30 September 2000,  bringing  its  total
customers to 9,108,000, up 12%, with wireless penetration reaching  49%
at 30 September 2000.

J-Phone is taking advantage of the spectacular Japanese mobile internet
boom,  pioneering  developments  in  multi-media  messaging  and  youth
oriented  information services.  It is well placed  to  move  into  the
third generation era. Revenues from messaging and web usage now account
for over 9% of total revenues, with web customer ARPU now exceeding SMS
customer ARPU.

J-Phone's  data and internet services include "SkyWalker",  its  multi-
media  messaging  and e-mail service, and "SkyWeb", which  incorporates
navigational  tools and download capability from the Internet.  J-Sky's
new  multimedia handset features a normal sized handset with integrated
digital  camera and multi-media enhancement through clearer colour  and
improved  imaging.  J-Phone has recently launched "J-Sky  Station",  an
adaptation   of   GSM  cell  broadcast-based  local   information   and
advertising service, a unique service offering in the Japanese market.

In  July 2000, J-Phone was awarded one of three 3G licences available  in
Japan. No licence fee is required by the Japanese government.

MIDDLE EAST & AFRICA

Financial Highlights                   Six months    Six months            
                                               to            to    Increase
                                     30 September  30 September           %
                                             2000       1999(1)
                                                                
Proportionate customers                 1,711,000       916,000          87
                                                                
Proportionate turnover                      #213m         #178m          20
                                                                
Proportionate EBITDA                        #100m          #63m          59
                                                                
Proportionate EBITDA margin                   47%           35%          
                                                                

(1)     Proportionate customers, turnover and EBITDA for the period  to  30
September  1999  are  presented on a pro forma basis for  the  merger  with
AirTouch.

At  30  September  2000, the Middle East & Africa  region  had  network
operations in three countries; Egypt, South Africa and Kenya. The Group
sold  its  investment  in Celtel (Uganda) for a profit  of  #5  million
during the period and acquired a 40% stake in Safaricom in Kenya.

Customer growth was particularly strong in Egypt where the Group's  60%
subsidiary, Misrfone, is the country's second GSM operator.   Operating
under the Click GSM brand name, Misrfone's customer base almost doubled
during  the  period, with net customer additions of 385,000  increasing
the  total  customer base to 790,000.  New prepaid offerings stimulated
this growth in the market.

In  South Africa, Vodacom, in which the Group has a 31.5% shareholding,
increased  its  customer base from 3,069,000 at the  beginning  of  the
period to 3,895,000 at 30 September 2000, representing a 27% growth  in
customers  in  the period.  Approximately 74% of the customer  base  is
connected to the Vodago prepaid product.


OTHER BUSINESS  DEVELOPMENTS

Internet and mobile data

Vizzavi  Europe  is  the Group's 50/50 joint venture  with  Vivendi  of
France  which  has  been  created to develop  and  implement  a  common
European multi-access portal throughout the parties' respective mobile,
fixed  and cable television networks in Europe.  Vizzavi Europe,  which
is  based  in  London,  has  embarked upon its  major  portal  platform
development  programme, in conjunction with internet portal  businesses
which  already exist in many of the Group's networks.  The  aim  is  to
provide  a common platform, with a unique feel to customers in  all  of
the  main  European  mobile networks, within the  next  twelve  months.
Although the general format and branding ('Vizzavi') will be the  same,
content  will be specifically tailored to local conditions,  needs  and
interests.

Vizzavi Europe received clearance from the European Commission, in July
2000,  to  operate its proposed services in Europe.  The Vizzavi  brand
for the multi-access portal has been launched in France, the UK and the
Netherlands, and is expected to be launched in Germany and Italy by the
end  of the year.  The UK will be the first country in Europe to  adopt
the  Vizzavi platform by the end of this year. Launch in other European
markets will then follow throughout the next financial year.

The global internet platform and Vizzavi brand is also being introduced
in  regions  other than Europe, with its launch in New  Zealand  during
November 2000 to be followed by Australia in January 2001.

Synergies

Initiatives  have  been  developed during the  period  to  realise  the
synergy  benefits quantified at the time of the Mannesmann transaction,
both  in respect of cost (infrastructure, handset and overhead savings)
and revenues. Projects currently under way, each encouraging a stronger
organisational  integration of the Group, are the introduction  of  the
Vodafone name as a global brand, pan-European product development,  the
roll-out  of new technologies, the introduction of Vizzavi to the  main
European  markets  and the consolidation of global purchasing  volumes.
Organisational   changes  resulting  from  these   projects   will   be
implemented  during  the current financial year, and  are  expected  to
deliver  enhanced revenues, a quicker time to market for  new  products
and a reduction of purchasing costs in the Group's operations.

Commencing  in  January  2001, the Vodafone  name  will  be  introduced
alongside  European subsidiaries' existing brands, starting a migration
process to a single global Vodafone brand positioned to complement  the
Group's product strategy.


Sales of businesses

In  April  2000,  Mannesmann reached an agreement with Siemens  AG  and
Robert  Bosch GmbH for the sale of 50% plus two shares of its  interest
in  Atecs Mannesmann, its engineering and automotive business,  valuing
Atecs at approximately EUR 9.6 billion. On 29 September 2000, Siemens  and
Bosch  made  a payment of approximately EUR 3.1 billion plus  interest  to
Mannesmann  in exchange for the pending transfer of 46%  of  the  share
capital of Atecs.  Siemens and Bosch will also acquire additional Atecs
shares  from  a capital increase, bringing their total shareholding  in
Atecs to approximately 50.1%, and upon closing will assume EUR 2.8 billion
of  pension and non-trading financial liabilities.  Further proceeds of
between EUR 3.7 billion and EUR 3.8 billion may be realised upon the exercise
of  certain  options over Mannesmann's remaining stake between  closing
and 30 September 2002.

The  sale of Orange to France Telecom was completed on 22 August  2000,
following   the  receipt  of  conditional  approval  by  the   European
Commission  and  approval by the shareholders of France  Telecom.   The
consideration  comprised a cash payment of approximately EUR 21.4  billion
(#13.2  billion),  a  EUR 2.2 billion (#1.3 billion) France  Telecom  loan
note,  redeemable  no later than 31 March 2001, and 113,846,211  France
Telecom shares, representing 9.87% of the outstanding share capital  of
France Telecom.  The non-cash consideration, comprising the shares  and
the loan notes, is underwritten by France Telecom at #8.4 billion.   In
addition,  France  Telecom assumed Orange's  existing  debts,  and  its
financial  obligation  regarding its  UK  3G  licence,  totalling  #4.1
billion.

Mannesmann   has  also  reached  agreement  to  sell  Les  Manufactures
Horlogeres, its luxury watches business, to Richemont S.A. for  a  cash
consideration  of  approximately  EUR 1.8  billion.   The   agreement   is
conditional  on  certain  regulatory  approvals.  On  9  October  2000,
Mannesmann completed the sale of its tubes business to Salzgitter for a
nominal consideration.  In the period prior to the completion of  sale,
Mannesmann  made capital contributions to the tubes business  totalling
EUR 271 million.

On  11  October  2000,  Mannesmann announced that  it  had  reached  an
agreement  for  the sale of its interest in Infostrada to  Enel  S.p.A.
The  consideration for the equity will be EUR 11.0 billion, consisting  of
EUR 5.5  billion in cash, EUR 2.5 billion of one-year unlisted bonds and EUR
3.0 billion  of  three-year listed bonds.  The bonds will be guaranteed  by
Enel.  The consideration is subject to an upward or downward adjustment
by  a  maximum of EUR 0.6 billion for a period of approximately  9  months
following the signing of the agreement, depending on the performance of
certain  agreed  stock market indices.  In addition, Enel  will  assume
Infostrada's net debt of up to EUR 1.1 billion at closing.  Subject to the
receipt  of regulatory approvals, the sale is expected to be  completed
in the first quarter of 2001.

Recent transactions

On  4  October  2000,  Vodafone and China Mobile  (Hong  Kong)  Limited
announced  that  they  had entered into a memorandum  of  understanding
setting  out  the  principal  terms for a strategic  alliance  and  co-
operation  between  the  two  parties in mobile  services,  technology,
operations  and  management.   The  arrangements  contemplated  by  the
memorandum  of  understanding are subject to entering  into  definitive
agreements by 28 February 2001.  Vodafone and China Mobile also  intend
to  explore  opportunities for joint ventures  and  other  equity-based
strategic  alliances  in  areas such as  research  and  development  of
wireless  data  services,  international investment  opportunities  and
regional and/or global alliances.  Concurrent with the signing  of  the
memorandum  of  understanding, Vodafone agreed to  purchase  an  equity
interest  in  China Mobile.  In an offering that closed on  3  November
2000,  Vodafone acquired newly-issued shares representing approximately
2.18%  of  China  Mobile's share capital for a  cash  consideration  of
US$2.5 billion.

On  8  November  2000,  Vodafone and Swisscom AG  jointly  announced  a
strategic  partnership  between Vodafone and  Swisscom  Mobile  and  an
agreement  for  Vodafone to acquire a 25% equity interest  in  Swisscom
Mobile  for Swiss francs 4.5 billion (#1.8 billion).  Swisscom  Mobile,
which is the mobile telecommunications business of Swisscom AG, will be
separated  from its parent prior to completion of the transaction.  The
consideration  for  the  25% stake represents an  enterprise  value  of
approximately #7.3 billion for Swisscom Mobile, including net  debt  of
#0.2  billion, and assumes that Swisscom Mobile will have obtained  and
paid for a UMTS licence.  The consideration for the equity will be paid
in  cash  or  Vodafone Group Plc shares, or a combination of  both,  at
Vodafone's  discretion.   Payment will  be  in  two  instalments.  #0.9
billion will be paid at closing and the remaining #0.9 billion will  be
paid  within twelve months of closing.  The transaction is expected  to
be completed by the end of March 2001 and is subject to the approval of
Swisscom shareholders as well as regulatory approvals.


FINANCIAL UPDATE
Acquisition of Mannesmann AG
At 31 March 2000, the Group's interest in Mannesmann AG was included in
fixed asset investments.  The results and net assets of Mannesmann have
been  consolidated in the Group's financial statements with effect from
12 April 2000, the date the acquisition was completed, except for Atecs
Mannesmann,   Mannesmann's  watches  and  tubes   businesses,   Orange,
Infostrada  and  other  businesses held for resale.  These  businesses,
except  Orange,  are included as assets held for resale within  current
asset investments in the balance sheet, and the profit and loss account
excludes  their  results. Current asset investments  also  include  the
France  Telecom loan note and 113,846,211 France Telecom shares arising
from the disposal of Orange, which was completed on 22 August 2000.

The goodwill arising has been provisionally calculated as #79.9 billion
and  is being amortised primarily by reference to the unexpired licence
period  of the underlying acquired network businesses. The amortisation
periods determined range between 5 and 10 years for the acquired mobile
operations.

Formation of Verizon Wireless joint venture

The  Group's interest in Verizon Wireless, which was formed on 3  April
2000, has been accounted for using equity accounting. The assets of the
US  businesses contributed to the Verizon Wireless joint  venture  have
been treated as having been disposed, including attributed goodwill  of
#19.6  billion arising from the  AirTouch transaction, and the  Group's
interest  in  the  new  venture  is  included  within  investments   in
associated undertakings.

Exceptional reorganisation costs

Exceptional reorganisation costs of #137 million have been incurred  in
the period as a necessary part of realising the synergies from each  of
the above transactions.  Exceptional costs of #54 million relate to the
restructuring of the Group's operations in Germany and the US, and  the
balance  represents  the  Group's  share  of  the  restructuring  costs
incurred by Verizon Wireless.

Measurement of prepaid churn

The Group's global policy for the measurement of prepaid customer churn
by  subsidiaries  is  to  adopt the local  market  practice  agreed  by
operators  for the purposes of market share comparisons.   If  a  local
policy  is  not  in  place,  the Group policy  is  to  exclude  prepaid
customers who have been inactive for over six months.

Exchange rates Movements in exchange rates had a net adverse effect  of
#64m on the growth in pro forma proportionate EBITDA for the six months
ended 30 September 2000.  At constant exchange rates, the growth in pro
forma  proportionate EBITDA compared with the corresponding  period  is
27%.

Interest

The  net  interest charge of #597m was up from  #136m  for  the
comparable period, and includes interest on Mannesmann's debt which was
assumed at acquisition on 12 April 2000.  Group interest, excluding the
Group's  share  of  interest expense in joint ventures  and  associated
undertakings, is covered 4.8 times by Group EBITDA (before  exceptional
reorganisation  costs  and  excluding  dividends  received  from  joint
ventures and associated undertakings).

The  ratio  of  Group EBITDA to interest is expected to increase  in  the
second  half of the financial year, reflecting the anticipated  reduction
in  Group net debt.

Taxation

The effective rate of taxation for the period,
before goodwill and disposals, increased to 34.5% from 32.5% in the  year
ended  31  March  2000,  primarily due to the higher  rates  of  taxation
attributable to the acquired AirTouch and Mannesmann operations.

Dividend

The  interim dividend is increased by 5% from  0.655p  per  share
last year to 0.688p per share.

Shareholders' funds

Total  equity  shareholders' funds at 30 September 2000 decreased  from
#140,833m  at 31 March 2000 to #136,559m at the end of the period.  The
reduction primarily comprises the loss for the period of #4,662m (after
goodwill  amortisation of #5,593m) and a declared  dividend  of  #423m,
offset by net currency translation gains of #582m.

Funding

Net debt at 30 September 2000 was #13,178m, representing an increase of
#6,535m from net debt at 31 March 2000.  The increase is primarily  due
to   the   consolidation  on  acquisition  of  Mannesmann's  net   debt
(#12,526m),  the  purchase  of  intangible  assets  (#11,470  million),
primarily  3G licences in the UK and Germany, offset by, cash  receipts
from  the  trade  sale  of  Orange  and  the  disposal  of  certain  of
Mannesmann's  non-mobile assets (#14,924m), a debt reduction  following
the  closing of the Verizon Wireless joint venture (#2,544m)  and  cash
generated  from operations.  Net debt represented 8.5% of  the  Group's
market capitalisation at 30 September 2000.

As  a  result of the sale of Orange to France Telecom, the  Group  owns
113,846,211 France Telecom shares and a France Telecom loan  note.  The
Group also expects to receive approximately EUR 5.5 billion of cash during
the  first  quarter of 2001, and ENEL loan notes in the  form  of  EUR 2.5
billion  one-year  unlisted  bonds and EUR 3.0 billion  three-year  listed
bonds,  on  the  assumption  that the sale of  Infostrada  to  ENEL  is
completed.   Further  cash proceeds of between EUR 3.7  billion  and  EUR 3.8
billion from the disposal of the remaining minority stake in Atecs  may
be realised in 2002 or 2003 if certain options are exercised.

The  Group remains committed to maintaining a strong financial position
as  demonstrated by its credit ratings of  P-1/F1/A-1  short  term  and
A2/A/A  long term from Moody's, Fitch Ratings and Standard and  Poor's,
respectively. The credit ratings reflect the financial strength of  the
Group  after taking into account the acquisition of Mannesmann  AG  and
payments for 3G licences.

The Group's preservation of its credit ratings has enabled it to access
a  wide  range  of debt finance including commercial paper,  bonds  and
committed  bank  facilities.  The Group has dollar and euro  commercial
paper  programmes for US$15 billion and #2 billion respectively,  which
it  uses to meet its short term liquidity requirements.  The commercial
paper  facilities  are  backed  by a US$14.55  billion  (#9.8  billion)
committed  bank facility, which expires in September 2001, with  a  one
year  term-out  option.  This facility replaced  the  Group's  previous
EUR 17.0  billion and US$7.5 billion committed bank facilities. The  Group
also has #13.7 billion (sterling equivalent) of capital market debt  in
issue, with maturities from March 2001 to February 2030.

The combination of strong operating cash flows, proceeds from disposals
and  good credit ratings leaves the Group well placed to take advantage
of value creating opportunities as they arise.


MORE TO FOLLOW


IR KKNKNNBDBQDD 
                                                                                              
x