2017/2018 Sustainability Report
Vodafone Italy

Digital Vodafone’s contribution to Italy

€ 5.3 b DIRECT AND INDIRECT ECONOMIC CONTRIBUTION
€ 2.9 b To firms
€ 1.4 b To the Public Administration
€ 1 b To families

Direct impacts on families, firms and the Public Administration

First of all, Vodafone Italy’s activities have an impact on stakeholders directly interacting with the Company. Value created in Italy is distributed to employees’ families, firms supplying goods and services and the Public Administration—the parties with which the Company continuously interacts when performing its activities.

€ 4.5 b DIRECT ECONOMIC CONTRIBUTION
€ 2.9 b To firms, through investments in assets, purchase of goods and services, finance interest and expense, rental of sites.

€ 1.3 b

To the Public Administration through taxes and duties, investment in 4G and 4.5G frequency bands, costs of GSM and UMTS frequencies, sector contributions, social security contributions and rental of sites.

€ 300 m

To families through the net wages and salaries of Vodafone employees,
post-employment benefit payments and advances, reimbursement of medical expenses, welfare contributions and supplementary pension, rental of sites, Vodafone Italy Foundation’s investments in social projects.

Indirect impacts on families, firms and Public Administration

In addition to direct impacts, Vodafone Italy contributes to the creation of economic benefits which arise from the activities performed by the parties operating along its value chain.
Thanks to their relations with the company, employees, suppliers and customers generate, in turn, financial flows towards their families, firms and relevant public entities. With specific reference to the impacts identified and analysed for this study, the indirect contribution made by Vodafone Italy can be estimated at about 790 million Euro.

€ 790 m CONTRIBUTO ECONOMICO INDIRETTO
€ 130 m Alla pubblica amministrazione attraverso le imposte sul reddito dei dipendenti, Contributi previdenziali versati dai dipendenti di Vodafone Italia e tramite le Imposte sul reddito dei fornitori locali per attività svolte per Vodafone Italia.
€ 660 m Alle famiglie attraverso salari e stipendi netti corrisposti ai dipendenti dei fornitori locali per attività svolte per conto di Vodafone Italia.

Note: this only considers the impact generated on the main local suppliers.

The spillover effect

Besides generating positive effects along the entire value chain, Vodafone Italy contributes to the growth of other economic sectors in Italy. The spillover impact derives from the fact that part of the stakeholders’ wealth created by Vodafone Italy’s activities is used in other economic sectors, which then benefit in an indirect way. Therefore, the added value created and distributed by the Company is then transformed into consumption and investments flowing into other economic sectors, thus contributing to their growth. This is the so-called “spillover effect”. The total effect of company activities can be estimated in terms of generation of global gross domestic product by using some specific macroeconomic measures at a European level and for the telecommunications sector . During 2017-2018, Vodafone Italy’s total net contribution to Italy’s growth was about 2.6 billion Euro, of which 2.3 billion constitute the added value created directly and about 300 million Euro constitute the wealth created thanks to the spillover effect.

1 (Cebr), Centre for Economic and Business Research. The changing economic impact of the telecommunication sector in the EU, 2008

€ 2.6 b NET CONTRIBUTION TO ITALY’S GDP

Economic contribution and creation of value

Vodafone Italy’s economic and social contribution to the country is strictly linked to the trend of the Group’s overall economic performance. With a view to creating value for Italy, it is worth noting Vodafone Italy’s organic growth of revenue from services, amounting to 5,302 million Euro, up 1.2% compared to the previous year. Another positive indicator was EBITDA, reaching 2,329 million Euro, up 4.6% compared to 2016–2017, thanks to the excellent commercial performance and the cost optimisation process.

This result was achieved mainly thanks to the increase, during the year, of revenue from fixed-line network services, equal to 992 million Euro (+12.4% compared to the previous year). In turn, the growth in revenue was driven by the increase in the number of fixed-line customers, amounting to 2.74 million, of which 2.5 million for broadband services (+14%). More specifically, customers using fibre-optic services reached 1.1 million (+500,000 in the year). The number of 4G customers is also growing and has reached 12.2 million (+3.2 million compared to the previous year).

HIGHLIGHTS FOR THE YEAR
12.2 millions of 4G customers
16.7 millions of households and firms using Vodafone fibre-optic services
€5,302 million revenue from services
€2.329 million EBITDA 

Creazione e distribuzione del valore aggiunto

Con le proprie attività Vodafone Italia genera quotidianamente risorse economiche che vengono successivamente ripartite tra i principali stakeholder del Gruppo, sotto forma di acquisti di materie prime, stipendi ai dipendenti e contributi fiscali. In particolar modo, nel corso dell’anno, un’attenta gestione operativa da parte di Vodafone Italia, che ha portato nel corso dell’anno a una riduzione dei costi operativi, ha consentito a Vodafone Italia di aumentare il Valore Aggiunto creato, inteso come differenza tra il valore e i costi intermedi della produzione e determinato sulla base di una riclassificazione del conto economico consolidato.

Distribuzione del valore aggiunto

During the year, Vodafone Italy promoted several actions targeting the technological development of its network infrastructures; with specific attention paid to energy savings and the reduction of atmospheric emissions. More specifically, during the year, the Company continued the installation of SRAN Energy saving feature technology on all network equipment, for radio intelligent switch-off, and the development of SRAN Hardware and Software technology to optimise radio settings. Significant measures have also been introduced to make premises housing network equipment more efficient, by implementing Free Cooling 2.0 cooling technologies, dynamic air conditioning control systems and Direct Free Cooling solutions.

Thanks to network upgrades and the evolution of mobile technology Vodafone Italy has avoided 131 thousand tonnes of CO2 equal to the quantity of CO2 absorbed by about 184,000 trees in their entire life cycle

Besides direct actions on its infrastructure, Vodafone Italy contributes to the general reduction of emissions thanks to innovative services and solutions available to citizens and businesses. Mobile communication technologies are one of the most effective instruments to mitigate climate change as they allow to streamline activities and processes and make them more efficient. In this field, Vodafone Italy has more than 20 years’ experience in developing “Machine-to- Machine” (M2M) technologies and is one of the first operators to provide innovative Internet of Things solutions to firms, both in Italy and worldwide. Furthermore, according to a Vodafone Group study, in 2020 the contribution of mobile technologies to reducing emissions in Europe can be quantified as 110 thousand tonnes of CO2 equivalent for millions of wireless connections activated2. By applying this calculation to business mobile connections activated by the Company during the year, we can estimate that Vodafone Italy alone has contributed to achieving this target with a reduction of about 22 thousand tonnes CO2, allowing Italy to take advantage of most opportunities offered by wireless communications to reduce greenhouse gas emissions, like the dematerialisation and efficient process management.

131 thousand Tonnes of Co2 not emitted
129 thousand Tonnes of CO2 not emitted thanks to direct actions on network energy savings
22 thousand Tonnes of CO2 not emitted indirectly thanks to mobile technology

2 Vodafone Group Plc Carbon Connections: quantifying mobile’s role in tackling climate change. 2009

Vodafone Italy also plays an important role for Italy’s employment, both directly—the employees hired by the Company reached 6,625 people during the year, equal to 6,030 Full Time Equivalent—and indirectly, by favouring the creation of jobs at suppliers providing goods and services to the Company or supporting some company operations such as distribution, sales and customer services. Indirect employment is estimated as the supply chain workforce performing activities for Vodafone and it amounted to about 24,700 Full Time Equivalent in the year.

31,000 people Total employment
6,625 people Direct employment
24.7 thousand people Indirect employment