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Company AssessmentVodafone Carrier ServicesJJ(Continued)PerspectiveCurrent Perspective: PositiveWe are taking a positive stance on VCS’ wholesale activities, because the company has made solid progress integrating its internal organizational structure and is now tightly focused on relevant product areas such as voice, IPX,SMS hubbing and intelligent IP routing. Group synergies are a major strength for the company, with global operations, network assets and skill sets all established, and tremendous buying and selling power to obtain the best dealsand to extend to its partners and customers compelling offerings. VCS has good presence in key markets, includingEurope, the Middle East, Africa, Asia and Australasia. It has a differentiated partnership approach to wholesalecustomers, which focuses on getting to know their businesses and their product and service needs and providingtailored customer sales and service propositions. VCS is also experienced with supporting C7 ISUP v2 and otherprotocols such as calling line identity (CLI), original called number (OCN) and redirected number (RDN) information within its international mobile-to-mobile offering. The company has a solid MPLS offer and has credibleAsian customer references as a result of extensive network investment in the region. VCS has a compelling managedwholesale IP VPN offering and is innovative with product bundling. The operator is accelerating its wholesale datacentre and cloud services strategy, which will help it open up a new revenue stream.VCS faces many challenges from external sources, namely competition and pricing pressure, and internally in termsof integrating back-office systems. Competition is intense from European providers such as Colt, BICS, TSIC andInteroute. Meanwhile, in Asia, VCS faces Tata Communications, PCCW Global and Chinese carriers as well aslongstanding players such as Verizon, AT&T and BT. In the UK, companies with growing network footprints suchas Virgin Media Business and TalkTalk Business are challenging in the areas of basic voice and data services, EFMand superfast broadband, while BT Wholesale is difficult to match for its breadth of ePositivePositivePositivePositivePositiveIP ServicesManaged ServicesMobile Wholesale sitivePositiveVery PositiveVery PositiveVery PositiveVery PositivePositiveStrengths and WeaknessesStrengths VCS has emerged with a new integrated business division and a concrete focus on relevant product areas. Twentysix operating companies give tremendous synergies and a large local access footprint. The integration of the former CWW into VCS creates a single consolidated entity with strong global network assets and a substantial presence in Europe, Africa, the Middle East and Asia-Pacific. VCS is embarking on a new pathwith very solid backing from global and national assets, existing client bases and skilled staff. For example, Asian 2014 Current Analysis Inc. All rights reserved.For more information, please call 1 703 404 9200, toll-free 1 877 787 8947Europe 33 (0) 1 41 14 83 15. Or visit our Web site: www.currentanalysis.com4

Company AssessmentVodafone Carrier Services(Continued)assets include its backhaul network in Hong Kong, an extensive Indian MSP-based network, investment in EIG andBBG, and NNI agreements with leading Chinese operators. VCS can benefit from an established, fruitful partnership approach and objective of tailoring products and servicesto the specific needs of high-value customers in managed services deals with Tesco and Morrison in the UK. VCS’managed services portfolio, skill sets, track record and Global Markets Solutions Centre put it in a good positionto build a successful and leading-edge managed services business, targeting further domestic as well as internationalcarrier customers. VCS is well positioned to meet growing cable requirements. The operator already has a substantial undersea cablenetwork and is investing in greater capacity, including an innovative in-situ upgrade on the Apollo cable from 2Gbto 10.5Gb, which gives the company a potential future capacity of 24 Tb over this cable alone. The carrier is amongthe world’s top four providers of global connectivity, which it is extending with investment in the WACS, a regionalmarket in which the company is historically strong, and the EIG. VCS’ multi-service platform targeting UK facility-based carriers enables it to offer a single SLA and guaranteedbandwidth regardless of access technology. VCS also has opportunities to capitalize on its presence in emergingmarkets where there are operators looking for all-IP transformation partners.Weaknesses The integration of the former CWW’s international wholesale activities into VCS is complex and it will take timeand attention to integrate networks. Meanwhile, competitors will seek any openings to approach customers withtheir portfolios and messages that the integration may cause confusion and difficulties. VCS faces stiff competition from service providers that have established brands in the carrier-to-carrier segment. VCS has yet to announce a clearly defined product set with backing product specification sheets. The carrier needsto move rapidly to present its range in the main product areas of mobile, data, cloud and carrier outsourcing. Incontrast, BICS has a clear menu of services within its ‘Global Mobile Village’ concept, and several other rivals areahead with strictly defined portfolios. VCS does communicate several services, but there is a lack of laser-focus detailabout each tier at this stage.JJRecommended ActionsRecommended Vendor Actions VCS can bring to the fore in its marketing messages the positive attributes that can be derived from new synergiesof scale and solid financial backing (e.g., Vodafone Group invests around GBP 6 billion each year in the network,and an additional investment of GBP 7 billion is underway through ‘Project Spring’). VCS can develop a broad and threatening service range for mobile providers to challenge BICS’ strong positionin this field. IPX, M2M, security, full outsourcing and international LTE roaming are all hot product areas thatVCS can pursue to bring innovative and differentiated products to market. Leveraging the Vodafone Group mobilesubsidiaries around the world to understand what MNOs really need is an excellent springboard to make a pushinto this segment against existing competitors. VCS should promote its deep access networks in countries such as Germany, Turkey, India, New Zealand andSouth Africa alongside its strong UK footprint and advanced next-generation service portfolio, including Ethernetservices, wholesale broadband and wholesale IP VPN, to ensure that carriers with international enterprise customersto serve understand its attractions as an alternative to BT Wholesale and other incumbents. 2014 Current Analysis Inc. All rights reserved.For more information, please call 1 703 404 9200, toll-free 1 877 787 8947Europe 33 (0) 1 41 14 83 15. Or visit our Web site: www.currentanalysis.com5

Company AssessmentVodafone Carrier Services(Continued) Vodafone is in an ideal position to offer smaller MNOs fully managed consulting and mobile voice and backhaul.Vodafone Partner Markets has a very strong level of experience here, and the provider can develop compelling suitesfor smaller MNOs that operate in niche and emerging markets where Vodafone is not present.Recommended Competitor Actions Competitors should emphasise that VCS will continue to be spending time and attention on integrating disparatesystems, and in the meantime, buying a number of products from the company might not give the most convenientuser experience – for example, no single online portal across multiple product sets. Colt and Interoute can highlight their more extensive European networks, their strong Ethernet and softswitchVoIP services and their strategies for wholesale data centre/cloud services to customers looking for partners witha pan-European reach. Ethernet, in all its guises, and cloud services are growing in interest among corporate datausers, and Colt and Interoute are in a good position to fulfil the need at either the retail or wholesale level. Level 3 should point out that it is a match for VCS’ wholesale activities in the UK and international markets; plus,it has a strengthened overseas and US footprint via Level 3. With an extensive UK network and US, Latin Americanand Asian reach; a strong VoIP offering; advanced managed services; and content delivery strategies, Level 3 is astrong competitor for VCS. Tata Communications and other Asia-Pacific players can promote their network footprint in Asia-Pacific as well astheir increasing breadth of capabilities, particularly in the voice, Ethernet managed services and content delivery segments. Tata and BT have strengthened their economies of scale in the wholesale voice market through their recentpartnership agreement. TSIC can point to far greater IP network assets and traffic volumes compared with CWW and note that the TSICrollout of 100 Gbps services in the US and available in parts of Europe provides differentiation. BT Wholesale should promote its IP exchange capabilities, which provide customers (and especially mobile operators) with a convincing TDM-to-IP migration strategy, and its Wholesale Broadband Connect services and strategyas an alternative to the more limited, though uncontended, speeds available from VCS. BT Wholesale can presentits strong abilities and operations resources to deliver managed and outsourced services.Recommended End-User/Customer Actions Global and regional carriers looking for a partner with a strong national and regional presence in Europe, theMiddle East, Africa, Asia, New Zealand and Australia can evaluate VCS’ footprint and expansion in key marketssuch as South Africa, India, Hong Kong and Singapore, where it is investing in its own next-generation facilities,and its partnerships in China, Oman, Vietnam and the Philippines, as well as with Telekom Malaysia. Tier 2/3 Asian operators seeking to differentiate themselves in their domestic markets should talk to VCS about itsability to provide them with an international network footprint as well as a strong portfolio of managed services thatcan be tailored for their local needs. Carriers considering IP transformation should investigate VCS’ capabilities in this area, since it has won a majorNGN build and operate contract for National Grid and gained its own transformation experience on which todraw. UK facility-based carriers looking to broaden the portfolio of services they can offer to their enterprise customersshould evaluate other operators and seek reassurance from VCS that wholesale will remain an area of focus. 2014 Current Analysis Inc. All rights reserved.For more information, please call 1 703 404 9200, toll-free 1 877 787 8947Europe 33 (0) 1 41 14 83 15. Or visit our Web site: www.currentanalysis.com6

Company AssessmentVodafone Carrier ServicesJJ(Continued)Fast FactsCompany DescriptionCompany NameVodafone Carrier ServicesCompany TypeGlobal network operatorHeadquartersVodafone Group: LondonPublic/PrivatePublic; LSE: VOD. NASDAQ: VODRevenueVodafone Group: GBP 43.6 billion (year ending 31st March 2014)Primary MarketsEurope, Africa, the Middle East, the US and Asia-PacificEmployeesVodafone Group 91,000 employees. Over 300 people are dedicated to VCS.Target CustomersCommunications service providers, Internet companies, OTT players, mobile network operators, carriers (Tier1s seeking route diversity, Tier 2/3 carriers looking for international networking partner) via the wholesale divisionKey CustomersWholesale customers include BT, Amazon, Artel, AT&T, Bharti, BSNL, Completel, Deutsche Telekom,Etisalat, Google, Hellas Online, KPN/iBasis, MTN, Orange Business Services, Rostelecom, Seacom, Skype,SoftBank, Sri Lankan Telecom, Tata Communications, Telefonica, Telekom Malaysia, Verizon, Virgin MediaSales StructureVCS operates a global account management structure for its top 50 customers with dedicated local accountmanagement teams serving the remaining 1,000 named communication service providers. Customer service and support is structured in a similar way.Service LinesCarrier voice/VoIP, voice transit, IP transit, IPX, bandwidth, Ethernet, IP VPN with five classes of service,MPLS, WLR, indirect access, directory inquiry services, local access, hosting, managed applications. VCS offers four wholesale voice offerings: GVI, mobile to mobile, TDM switched interconnect and route access.Network DescriptionGeographic NetworkCoverage1 million km global network (including submarine and terrestrial), 562 PoPs across 76 countries.Fixed/Wireline NetworkIP/MPLS multi-service platform (MSP) network based on Alcatel-Lucent 7750 Service Router and 5620Service Aware Manager products. Plans to move to a multi-vendor environment.Mobile/Wireless NetworkWireless footprint that includes more than 80 countries (including its own equity interests in more than30 operating companies, affiliates, and joint ventures, as well as more than 50 partner networks)Expansion or UpgradePlansMajor plans include integrating networks in Africa, Europe and India together with the expansion of thenetwork in India and participation in the EIG upgrade.Network Operation Center(NOC)Europe (the UK, Germany, Portugal) and India (Bangalore, Pune, Chennai)Data Centers14 data centres in the UK and Ireland as well as South Africa and expansion into Germany; plus accessto 100 data centres globallySupport CentersIndia (Pune & Bangalore), 24x7 multi-lingual support centre for global carrier customers; Hong Kong, a24x7 multi-language (North Asian languages) centre for Asian customers. Global service delivery teamsin India (Bangalore) and the UK manage the backend processes and handle all customer requests centrally.Investor in 80 cables globally, including Apollo, EPEG, Europe India Gateway, APCN2, West AfricaCable System and BBG (Bay of Bengal Gateway). 2014 Current Analysis Inc. All rights reserved.For more information, please call 1 703 404 9200, toll-free 1 877 787 8947Europe 33 (0) 1 41 14 83 15. Or visit our Web site: www.currentanalysis.com7

Company AssessmentVodafone Carrier Services(Continued)Select Customer WinsDateCustomerCommentaryJune 2013Numeric FuturesA focus on inbound voice traffic both nationally and internationallyJuly 2013DigicelBilateral contract for international termination of traffic in 39 countriesJuly 2013TelusAgreement for bilateral international voice traffic, terminating traffic between NorthAmerica and the UKMay 2014SFR FranceExpansion of existing partnership, which includes IPX Interconnect agreementJune 2014Telenor Global ServicesIPX Interconnect agreementKey Partnerships and AlliancesPartnerDescriptionEPEG ConsortiumVodafone is an investor in the EPEG Consortium, which is the first terrestrial high-capacity cable betweenEurope and the Middle East that avoids the Suez Canal and Egypt. The 150 million project was completed in December 2012.BBG ConsortiumVodafone is a member of the BBG Consortium. The submarine cable system, spanning 8,000 km, willprovide a low-cost, low-latency route for communications traffic between Southeast Asia, India and theMiddle East.MPLS NNI partnershipsThese include China Telecom and China Unicom for MPLS coverage across 200 Chinese cities;Telefonica; Vimpelcom in Russia; Batelco and Tawasul in the Middle East; SoftBank in Japan; andTelekom Malaysia.MEETS consortiumMiddle East-Europe Terrestrial System – subsea capacity and capacity via a power cable. 2014 Current Analysis Inc. All rights reserved.For more information, please call 1 703 404 9200, toll-free 1 877 787 8947Europe 33 (0) 1 41 14 83 15. Or visit our Web site: www.currentanalysis.com8

dedicated Internet access, SIP trunking, wholesale broadband and a managed application/SaaS portfolio, and hosted Exchange. IP Centrex and managed fixed/mobile convergence products are in the pipeline. Marketing/Sales Strategy: Very Strong Vodafone Carrier Services combines the carrier services businesses of Vodafone's operating companies and CWW