Good morning. Welcome. Thank you for coming to today's year-end presentation for Vodafone. Before getting into the presentation, I have to ask for a couple of minutes to comment about the other announcement that we made this morning. In October, I will step down as CEO of Vodafone after 10 years, and I will be succeeded by Nick Read, who is well known to all of you. Nick Read, himself, will be succeeded by Margherita Della Valle, who is probably also well known to most of you. Of course, a difficult decision to step down from a company where you have been CEO for 10 years, on the board for 14 and inside or near for more than 20, but this is the right decision. Vodafone is getting -- as I said to the journalists, we are in a new chapter of our book of history. We will be, in October, starting to write the new paragraphs of the new chapter, a converged chapter, a chapter with India, being in a different space, Digital Vodafone starting to get traction, transformation of the company. It's a very healthy thing that you have a team, which is dedicated for the next 5 years and beyond, really beyond, Nick, to make these things happen. And I have to say, I'm very happy that the board, after due process, has selected Nick. Nick is a tremendous person. He's been 17 years with the company. He has worked -- actually, not many people know, more time and known in finest than in finest, that is not to say that finest is a bad thing, but he has done a lot of jobs. I have to say he's also not only broad and deep. He has an incredible resilience. He is the only person on this…

Thank you, Vittorio. Good morning, everyone. So it's a very proud moment for me to have the opportunity to lead the group after Vittorio and take it into its next phase of growth going forward. So I'd like to take the opportunity, I know it's a little early, but to personally thank Vittorio, not only for transforming Vodafone into the great company it is today, but actually being a great mentor to me over those 12 years. I'd also like to congratulate Margherita. She will be an outstanding CFO for the group and has been a joy to work with. So this is the last time I get to do the inspiring part of the presentation. So I think, on Slide 11, as highlighted by Vittorio already, our financial performance in the year was strong and as we translate to that modest organic service revenue growth into strong EBIT and free cash flow growth. In absolute terms, our fiscal year revenues declined, primarily due to the deconsolidation of Vodafone Netherlands and a drag from FX. On an organic growth basis, we grew 1.6%, or 2.6%, excluding the impact of regulation and the interruption of handset financing in the U.K. Adjusting organic, EBITDA grew 11.8% or 7.9% on an underlying basis, which removes the impact of handset financing, large settlements in Germany and the U.K. and the drag from roaming regulation. As a result, our EBITDA margin expanded by 190 basis points to 31.6% or by 130 basis points on an underlying basis. D&A declined year-over-year, partly reflecting a longer assume life for our German cable assets, further amplifying EBIT, which increased by 47% organically. Free cash flow, pre-spectrum and restructuring, was €5.4 billion compared to €4.1 billion in the prior year driven by higher EBITDA growth and lower capital credits…

So update on the strategy and execution. Let me first start from strategic capital allocation. If you look at what we said, we wanted to do the three geographic areas of the world. We said we wanted to be converged leader in Europe. With the Liberty transaction, we are adding 17 million households. And we clearly are becoming the biggest infrastructure owner in Europe. We were already there in mobile. Now we will become that also in fixed. We said we wanted to be data leader in Africa, but wanted to have a simplified structure. It has been a good year of transactions between rationalizing and simplifying the relationship between Safaricom, Vodafone and Vodacom with the interest we have announced during the year, the Tanzania IPO and the sale of Qatar, which was a little bit out of the strategy at this point. And then the third statement we made said we want to be a scaled leader in India. I am pleased to say that the merger of Idea and Vodafone India is on track. And as I said before, we agreed everything. Don't forget, $10 million of synergies will start coming to us as soon as we can complete. We completed the -- we had a standalone tower sale for €1 billion. And I have to say, it was very important also to get the Indus-Infratel deal not just to make the main transaction happen, but also because this gives not only synergies, again, but also a monetizable asset, which can help making India self-supportive. So from a strategic point of view, I think we did what we said we would do, and I'm very pleased that everything was in time -- on time with today. Where does this lead? This is a slightly already short last week…

Going to have a lot of questions to answer.

It's Jonathan Dann from RBC in the blue suit. I've got two questions. One is on the LTIP. If we dissect Slide 21, it sort of implies that year plus one and year plus two, we would start to expect the sort of substantial increase in free cash flow. Could you just walk through whether that's revenue, OpEx, CapEx driving that? And then my second question is more existential. It seems very easy to disrupt in broadband, so you know yourself, in the U.K. [indiscernible], whereas it would seem to me that 5G has greater barriers to entry. So I mean, how do you see the pricing environment and competitive landscape in, say, the consumer broadband market?

Yes. Why don't you take the LTIP while I am...

Yes. I mean, I would say on the LTIP, what I was really trying to highlight is there's good progression, I would say pretty much EBITDA-driven. so it's sort of core-performance driven. You need to bear in mind here, we were doing organic service revenue of 1.6% this year. A good proportion of that had high margin because it's monetizing data. So build a network, we monetize it. And also, we have now an extensive on-net footprint, which has high margins. So those 2 factors go through to our bottom line. And then on top of that, we have digital. And digital start ramping up. So it's a bit of an investment year next year, it's been a bit of an investment year this year, but then it starts to really contribute going forward in terms of transforming that business model.

Yes. And on the existential question, is it easier to be [indiscernible] disruptor or not. Let me say, of course, you have a point, but of course, you have to put it in context. So is it easier to attack in fixed line from behind? Yes, but we don't do it exactly in the same way everywhere. So you might be influenced bin the U.K., where we have literally 0 legacies. So yes there, to build scale over time, you need to be more aggressive. But if you look, for example, at Italy, our pricing is, if anything, more cautious than the pricing of others. If you look at Spain until Friday, actually, we were at a premium in certain segments. Now at a premium versus Orange, not versus Telefónica. If you look at Germany, the cable pricing is more or less has always been the same, and we're not -- so yes, it is in a way easier because you have all the high-level revenues, but we are not really being particularly aggressive across the board. 5G will be different, 5G will be more complicated, and that's why MVNO's are nervous. That's why MVNO are nervous, because they know that there will be a surge in traffic which will be very high. There will be technical requirements in terms of latency and quality of service which will be higher. And it will not be easy as an MVNO to really kind of do that. Of course, some of them will be there, others are less comfortable. Capacity management and quality management will be more important over time. But it's already a little bit of case in 4G. And I have to say, even in 4G, you see a -- it is a little bit more complicated. Not for serving Netflix, of course. Netflix is -- yes. So shall we? Yes. Let's go there. Robert? Oh, yes. Okay. Yes.

San Dhillon here from Exane. Two questions. Firstly, on digitalization. Nick, you mentioned that there were investments this year and in FY '19 in preparation for the benefits of digitalization. Could you quantify kind of the of those investments and how much are nonreccurring? And secondly, on service revenue growth progression. As we kind of go into the 2Q and the second half of the year and you revert to normalization in Italy, so to speak, do still expecting the underlying organic service revenue growth to be between that 2% and 2.5% percentage that you have been delivering?

So I would say, on the first one, in terms of digital, I would say that the costs this year have not been so great, so in FY '18. I'd say FY '19, we'll put in investments to the tune of up to €100 million that we think we can do and still lower absolute operating cost while we do that. So a little bit to Vittorio's team of investing in that business continuously, Fit for Growth gives us capacity to then reinvest in the business. I'd say on service revenues, sort of trajectory rather than break down by quarter, which of course, we're not going to do, what I would say is we're growing, if you like, the headline 1.4% in Q4 and 2.4% underlying. If you look at the 1.4%, I'm really calling out the fact that we're going to slow up in Q1 80 basis points. It's really a bit of a one-off in Italy for timing on the repricing. Then the question is Q2 onwards, what's going to happen from a competitive dynamic with Iliad coming into the market? And frankly, there are a lot of different scenarios, a lot of different potential pricing plans. We have to see what they are. So I don't think we're in a position to give an outlook. We'll just have to see. I think we're very well prepared. At Spain will be a small impact in going negative into Q1, and then let's see how we evolve. I think the second half will be more positive for Spain, given those investments that we're doing in the first half.

Yes. Robert? Where? Here. This? Yes. Okay. Okay. You're not Robert. You don't look like Robert.

Not Robert. So two questions, please. Firstly, I guess, just a big picture question around the EBITDA growth that you've delivered last year and as we look to this year. So I guess tying up a few of the things we've talked about. If we look at the underlying EBITDA growth in March '18 it's about 8%, adjusting for oneoffs and everything else. The midpoint is 3% this year, obviously, there's going to be an Italian impact, you've assumed that. But I guess, can you walk us through what are the other moving parts that we should think about? I guess top line cost cutting, digitalization. What are the things that kind of explain that slower growth? And I guess with that, one of the things I'm quite interested in is the -- in the H2 EBITDA that you generated, the margins were up nicely, but actually, OpEx didn't improve in your market in terms of OpEx cuts. They were very good in H1, not so much in H2. So maybe it's commercial investments, too. It's just the general message around that. And then the second one is just on spectrum...

Can go up to three. Carry on.

Yes, sorry. And my second one is really around spectrum, which is, you made an interesting point about maybe being able to refarm spectrum and not necessarily having to compete so agressively for future auctions. I guess what I was trying to tie together is if you were to look at the volume of auctions coming up, we could probably be thinking of €5 billion to €5.5 billion of spend in the next 2 years. I understand the point about maybe not needing to buy so much, but I guess what I'm trying to understand is how much of it is important just to future-proof? Because I guess there's not a lot of visibility around future 5G demand. Is it really strategic as you think about safe to not pit for that auction?

So let me rattle through your list. So just in terms of EBITDA growth, the 7.9% down to midpoint of 3%, the biggest swing factor is Italy because Italy contributed to growth this year and is obvious you're going to be negative next year. So that's the sort of bigger shift down. There's a degree in Spain. And the main degree of Spain, we need to invest in Spain. We'll reposition pricing, but we'll also invest below the line. That will involve some selective subsidies, et cetera, to basically compete with MÁSMÓVIL, not in a overtly aggressive way. We're just saying, in retention, in reaction, we want to be able to complete. So there's an investment going in there. I would say these are the 2 main movements. The rest of the profile looks, I would say, pretty similar to what we've been delivering. To your point of H2 operating cost. Yes, they did not reduce. We could have had a reduction, but actually, we felt with the performance we were doing, now was the moment to invest in the business. And there were a number of markets that we felt -- on the commercial cost, we felt we had really strong momentum in a number, we wanted to invest behind that momentum to give us more growth in FY '19 and before. And just in terms of spectrum, I suppose the big one on the refarming opportunity is low band. And sort of do we need to participate? And to what extent we need to participate? More around 700, given the low band that we already have in some of our countries. That's not to say that we're not going to. Clearly, we have to evaluate, we have to see the pricing, but the pricing has to be, if you like, a compelling price point for us. And so we're doing a strategic review in each of the markets to see where the opportunity is.

Yes?

Yes, it's Maurice from Barclays. So a question on your next-generation access. I mean, you referred to it as being in a super-strong position, fastest-growing of your European peers, et cetera. I guess the question relates to the pace of growth going forward. There are many who doubted Open Fiber's business plan, there are many who doubted whether CityFibre, alternative fiber investments in the U.K. would take place, there seems to -- and commentary on BT, they're regimen moving slowly regarding, giving you the right wholesale terms. So you seem to have some tailwinds to fixed line growth in that respect. Do you think net adds can actually accelerate going forward, given the greater footprint in Italy? I think Open Fiber is talking about 2.5 million net adds, I think. in terms of homes passed this year. Should be lots of money coming in from infrastructure funds on U.K. fiber. Can we see accelerating growth in fixed line?

Well, let me give you the broader answer, and then maybe, Nick, you can talk more about the expectations. The broader answer is there's no doubt that new-generation networks are coming. They are coming either because incumbents are investing in them or because we -- and now I say we upgrade cable to DOCSIS 3.1 or because private equity is investing on a regional basis. And the beauty of the Vodafone strategy is that we always said we are going to be capital-smart. We're going to use the 3 models, can do ourself, we can buy, we can work with incumbents or we can work with local companies to do it. Now there's no doubt that this will happen. This will imply that a lot of people will upgrade, as I told you in my speech, and then there will be an opportunity to acquire customers from incumbents. Incumbents have the problem of having high prices for old products, products that don't deliver. If I look at how much I pay in my home. I mean, honestly, every month, many forget, but every month I say, "Why am I getting this for this price?" So it's a tremendous opportunity for us when we are -- prove to be right strategy and the right assets going ahead. You want to be more specific on...

No. I mean, the only I would say is I think we covered this when we had our sort of open office down in Italy. Where we were focused on the fixed, was that we're in a window at the moment where people are leaving off slow-speed DSL, whatever products and moving on to Class B gigaspeed which we can offer. And so it is a little bit of landgrab moment, I mean, to your point. And if other incumbents, et cetera, are not rolling out a product that can really compete with our infrastructure, we have an advantage. I think there's a balance between not overpromotion and reducing ARPUs and the level of growth. But you clearly see in our quarterly performance the momentum we have as a business, and we're taking share.

Yes. Difficult to choose. Let's move a little bit here, John and James. And then here, Paulo and then Jay. And then we can go there. Yes, okay. Yes, I see you. Robert? I'm sorry. They all call themselves Robert.

Right. If I may, just one question to do with India. So if we set aside the fact that you're just about to kick off a major self-help program when you merged with Idea, can you help us consider whether the markets and you would have been at the bottom now, and you would be slowly but surely recovering, now that all the bloodletting seems to have sort of run its course?

Yes. It's very hard to call the bottom of the market, especially when pricing is not in your hands, hands of three different people. I would say, for sure, we are very well positioned for a recovery on the market when it happens. In the meantime, as I said, we have €10 billion of synergies that we need to get. So the whole work that we have been doing with the -- as much as we can, because you cannot completely do things. The clean team is to first set up the plan for getting the synergies in terms of network synergies, most of them; and in terms of commercial planning for the joint brand. And then clearly, be responsive to all price moves of the competitors. For the time being, we have never triggered a same pricing down, it's either Jio or the other guys. We follow and we defend our base. It's going to be an incredibly elastic situation because a 10% increase of pricing, which sounds like after the collapse, it's nothing actually can contribute immensely to the bottom line. Can I call it now? I don't know. I mean, it depends. Well, I mean, you have an effect on the base which of course will be there, but keep in mind that our 22% decline, 1/2 of it is MTRs. So also that, at some point, we'll lap. So is this enough to call it the bottom? Probably not. But we are clearly being closer to the moment of the bottom than 1 year ago.

Yes. I mean, I think it is also fair to say that since, what, early January, prepaid market has been pretty stable. Yes. I mean, obviously, there's new postpaid pricing going into market, but prepaid has...

Yes. Which is inevitable. Then when you have prepaid, very low, why would you take a contract? I mean, up to a point. So is this the end of it? I cannot say. And for sure, it is not for me to say. But clearly, we're getting into a three-players market. That's the story. James? James. And then we move here to Paulo, okay? James? Is your name James?

It's Polo Tang at UBS. Just have two questions. So the first question is really a clarification in terms of cost savings. So I'm just really trying to get an understanding in terms of how big the opportunity is left. You've obviously called out lower OpEx for this year. Is there a lot more to go for -- from next year onwards? So any commentary around that would be very helpful. And then second question is really just for Vittorio. So this 10 years as CEO, what's the achievement that you're most proud of? And how do you view your legacy?

I vote that you do yours first because it's more interesting.

Sure. Listen, in theory, it's not today. In theory, it's AGM, it's Q1 in the moment. But let me say, first thoughts, the real achievement that I think is lasting in life is the people you leave behind. And not just the people, Margherita and Nick, but people who are sitting here on the first row, and they are the 200 there behind. It's a real lasting legacy. And I think, for investors, this is also the most important thing, a company that displays leadership succession, good management practices and solid management structure in the long term. I might not sometimes hit the peak, but we never really be in big trouble. So to me, that's the most important thing. Then if you look back, I'm very proud of this big transformation. So I remember in my early tenure days, people saying, "Vodafone is doomed. You are only mobile, the worlds can't converge and you guys don't have content." And so now the content guys, I think they are hiding someone now because it's probably not a great investment. But we have transformed the company into a different beast. We have distributed a lot of money, I divestments for €115 billion. I gave €120 billion to shareholders. But we invested in €150 billion between CapEx, spectrum and acquisition. So I think we managed a pretty massive transformation in an effective way. But if you ask me what really remain, and for me, it's people, the quality of the people.

And on cost. [indiscernible] Much more exciting. Well, it's -- yes. What I would summarize is that Fit for Growth has really gone through three phases. First phase as around the things like ramping up shared service centers. So that was a lot of activities moving out of Europe into our captives, our own shared service centers, and getting the benefits from that. We have things like procurement, we centralized all our procurement, adding categories too. So if you like, being a true global company in terms of size and scale and advantages. So the second phase was then starting to get into standards, like network standards, IT standards, how do we buy IT more efficiently? What's insourced versus outsourced? So if you like, more around the productivity phase, and we've been driving that. The third phase we're about to go into, digital goes up. So we haven't really had digital advantage. So if you look at it previously, sort of 2/3 of the benefits were in the OpCos, 1/3 in the group-led activities. Now it's moving more into 1/3 will be across-the-group digital; 1/3 is in the OpCos; and then 1/3 is group-led, further initiatives that we're doing. So the profile constantly changes. It's my way of really saying this is a multiyear ambition of how we're really reshaping the cost base and the operating model. Don't see it as we are flashing and burning cost in areas and then we run out of room. We are reengineering, in a considered way, our business.

Yes. Dhananjay?

Two questions related to network quality and capacity. So firstly, in the near term, you've closed the gap versus the incumbents as it pertains to quality across your core markets, and yet -- and this just might be an issue in terms of how you account for this, they seem to be outperforming you in terms of relative market share momentum. Firstly, how accurate is that observation? And how do you intend to address that? And mid- to long term, I mean, there's 300 megahertz at a minimum of reasonable spectrum coming to market on 5G, which implies a massive expansion in capacity across networks, even for the smallest-scale operators. To what extent should we be concerned about the deflationary pressures these will exert on pricing? So I'm not talking about unit repricing, I'm talking about your real like-for-like ARPUs that customer pay.

Well, on your first observation, I think, is directionally right. On consumer mobile, we have probably a little bit underperformed here and there. I think it's part of the other side of the story versus convergence. Of course, we are focusing a lot of that. We will need to do a little bit of a better job on customer base management. However, we also hate when some old customers are squeezed, if I might use it, or the customer bases are managed in ways that we think, in the long term, don't create big value. I mean, the 28 days example in Italy is very telling. We adhere to the law in a strictest possible way, our competitors didn't. But now of course, we're going to have some financial cost coming from that. Is that right? I don't think it is. It work well -- better for us in the longer term, probably. But of course there are these things that unfortunately make some differences. On spectrum, yes, what you say is right, but don't forget, again, that still will be more and more converged. There will be more and more on not just the few I gave in Netflix, kind of Netflix on a phone type of experience, but we will give more. So my impression is that it's more what Nick has said. I think we are getting to a point where we will spend probably less than what people think of spectrum. We'll use spectrum in a more efficient way. Does this mean that governments probably will start making less money on spectrum? I think over time, this will the case. But Jury's out. Let's see.

Could just do one build on the -- or from a -- so I think what you said on the spectrum side would be more valid if we had not dumped Spring. So I think opening up that sort of two-tier quality, because in the end, 5G is coming on top of a 4G infrastructure. And so in the end, as Vittorio showed in his chart, you're building on that 4G quality. So if you're a second-tier quality player, you're already behind before then you start densifying on top. So it doesn't necessarily mean, yes, that suddenly, there's a quality gap check.

Yes. James.

Yes. James Ratzer, New Street Research. Well first, Vittoria, congratulations on you've achieved over the past decade. And Nick and Margherita, congratulations, you two, and good luck for the future. So kind of two specific questions. One just on digitalization, which has been a big kind of topic for this morning. I mean, as that ramps up and accelerates, how do we think about kind of personnel cost in particular going forward? I mean, BT announced last year a major restructuring program, restructuring costs involved with that. I mean, you've been spending around €250 million per annum on restructuring. Is that something that goes up as the pace of digitalization increases? And then the second question was around the kind of dilemma between microwave versus cable and fixed wireless. And you were talking quite positively there about microwave backhaul, at the same time, you're investing significant amount in cable. And I think to date, have been more skeptical around the fixed-wireless-broadband business model. How do those statements around microwave sit alongside kind of the other comments around cable and fixed, wireless? Is that not a potential threat.

Shall I take the second one? Okay. You take the first.

So I would say on digital first, I mean, the first thing I would say is the focus of that transformation is not about cost cutting and headcount reduction, it's about giving a fantastic customer experience. And let's face it, telecoms as an industry is not known for giving outstanding service. So we really want to differentiate on that business. We've got a fantastic quality of network, whether it's mobile, whether it's fixed. And now we want to put that great service layer on top. At the same time, you get efficiencies. Yes, fine, we get efficiencies and we will work those efficiencies. But we've been working efficiencies for all these years. To your point of restructuring, FY '19, similar level of restructuring cost, €200 million. We've factored that in our thinking sort of as a -- sort of long-term average.

Yes. On the second point, let me clarify what I really mean. One thing is the backhauling story. So do you need fiber to backhaul back from sites that will be more and more loaded with data? And the answer is not necessarily. With progress of microwave, we -- and the problem with microwave as always the hops. The more hops you have, the more you have latency. You accumulate the latency, the service becomes bad. With the new microwave, latency on the hops is actually really reduced. So as long as you can have straight-shooting with microwave, we will depend less, not more, on fiber in the future, which is good. That does not mean that if a motorway company or a CityFibre ring has, "Hey, I have a CityFibre ring, do you want to use it?" We'll not use it. But it's another make, smart-capital type of deployment decision that Johan and his people will have models. And again, with a lots of analytics and lot of analysis, we just decide which one is the best. Different story, let's talk about last-mile access and fixed wireless into the homes. Now what I said is, while there is some story about this being appealing in the U.S., we haven't found that the density of most situations in Europe, with -- together with the low price of getting fiber or an NGN access in most places make this solution viable in most of our situations. In other words, when you pay €80 versus €16 or €17 or €20 or €25, clearly, the room to have radio deployment is more limited because people say, "I get another one." Plus, we have the density thing that is very important that creates more of an issue in places like this. That does not mean, again, in some situations, more rural, more kind of spread, we might actually look because the cost of building fiber becomes higher and higher with the distance, the meters of distance. And the density is lower, so wireless might make sense. But I'm saying it's two completely different things. One is backhauling, the other one is access to the nodes. Was I right, Johan? Yes, thank you. I always look at him because when he talk about events smart events, these things. I think we need to come to this side.

It's Andrew Lee from Goldman Sachs. Just wanted to echo everyone else's congratulations and best of luck for the future for all of you. I had question on returns, first of all. So you sold well, you streamlined your business, you bought the position of convergence, as you laid out in your presentation. And you are growing faster than your peers. Your returns are below the cost of capital. And so now you're set up, it seems, for the future. What's the opportunity to get those returns above the cost of capital? How quickly can you do that? And what are the key obstacles to that? And then just a second question on B2B and barriers to entry have cropped up a lot in the questions you've had so far. But just wondered on your views on the changing barriers to entery in B2B. Do you think the barriers to entry are coming down as ICT becomes a bigger chunk of the pie and as cloud maybe gives the access, great scope for competitors? Any comments you have on that...

The what is coming down? I didn't get the word.

The barriers to entry. Yes. So is it easier for new players to come in the ICT campus?

Barriers. Okay. So first of all, let me say I would love to say that return on capital will grow immensely now. But I think it's your answer, not mine, but Markus [ph] here.

Well, I mean, I think you've seen a focus on EBIT over the last couple of years. And that was one of the changes I made. That's on saying, "Okay, look, we're going to drive EBIT." We've put it into our bonus schemes, so we changed from EBITDA to EBIT. I know you all love EBITDA, but we're very focused on improving returns. I think over the last 2 years, we have started improved returns. And I think you can see it in the numbers here. What I would say is what effectively, moving forward, if you fate that returns will improve, is we've done some big transformational steps on reshaping the group. India, obviously, the Liberty transaction. Off the back of that, leverage stands at 3x. It's going to be a very organic-focused execution over the next three years. We need to drive the top line, we've talked about all the opportunities we have with the assets that we have to drive that top line. We're going to stay very, very disciplined around cost, lowering cost through digital. And you've heard it, whether it's spectrum or whether it's CapEx, we're really driving the optimization. And there's is more science in how we are deploying CapEx. And I think there are opportunities. So if you get EBITDA growing and holding your CapEx down with spectrum and amortization, you're going to get returns moving in the right direction.

Yes. On B2B. I think on B2B, I want to be very clear and honest with analysts and investors because it's very important that B2B does not -- and cloud does not become the next content thing. The answer to question is yes and no at the same time. So yes, we think there is an opportunity coming from cloudification, and there is an opportunity if we leverage on the assets that we have, which is why I made comment about the assets that we have. If we leverage on the assess that we have, we have reasons to believe Vodafone can continue to grow, even when others are actually going backward. And it's easy to say why because they have legacy services, which were, let's face it, overpriced versus the technology possibilities of today. We didn't. If we deploy, in an intelligent way, communication services on top of cloud in a smart way with the right salesperson, the right international footprint, it's an opportunity for Vodafone. But I want also to say we have to be very honest in saying it's a bit like with content. We need to do what we're good at. So can we be better at cloud, at hardcore cloud, than Microsoft? Than Google? Than Amazon? The answer is no. Therefore, we will need to partner and work with them. Therefore, our opportunity will be exactly what I said, the integration of communication services on cloud services, which would be mostly given by others, and we will integrate with them. If then, telcos start thinking, "Oh, I'm going to go into cloud," it's a huge market. You look at this kind of reports from industry specialists. It's €30 billion, €40 billion, €50 billion, then you inevitably have to retrench at some point because it's too big. So again, another area where I think Vodafone is deploying the right strategy, playing where we are strong and cooperating with others where they have better assets.

And just to build, that's in a CapEx-light execution. Just in case you were...

Yes, which is exactly, yes. Yes. Because otherwise, you can spend all the money. It's like in content. You can spend all the money that you want in the world of cloud without really being competitive. Emmet? And then we come back because Robert -- can you make sure the guy with the beard has the microphone? [indiscernible] Otherwise, he will think I have something against him. You've been very patient. Please go ahead.

Okay. It's Emmet Kelly at Morgan Stanley. Just two questions, please. First question is on Slide 23, where you highlighted pro forma leverage of 8x on the Indian JV with Idea. And Nick, can you just say a few words on what makes you so confident that the JV can support the leverage during the 3- to 4-year integration period? Maybe just say a few words about the long-term plans for your stake in the enlarged Bharti Infratel group? And then second question, again, Nick. If you look at Vodafone over the last 10 years under Vittorio, he's definitely left his stamp on the portfolio, the network and cost cutting. Just any early thoughts you have on what stamp you would like to leave on the company as you enter the position of CEO? In particular, maybe any opportunities you see for the sector because the sector looks quite unloved by the stock market at the moment. And where you see the greatest opportunities going forward.

Emmet, this is the earliest question on legacy that I've [indiscernible]. It's not even started.

No pressure, then. Right. I mean, just on leverage, what I'd say is, obviously, we've had a chance to form a team, obviously, within the right boundaries, if you like. So look at all of the integration plans, synergy potentials, et cetera. We're very positive on the synergy opportunities and where there can be some fast starts. So network rationalization, duplication of sites, I think we can have some really quick wins on that. Procurement, I think we can have some quick wins. So there's a number of areas. I think the team are very positive about how we can make an impact quickly. What I would say is I did put on that chart a dotted line. 80% is to the government on future spectrum payments. You would like to think that both the government and banks, associated, want a healthy, three-player market going forward. And therefore, I'd like to think that they will all work with us to make sure it's a good, rational market. So what I'd say is good synergies, brand's doing well, spectrum, network, and then the profile of the debt is at normal bank covenant debt, if you like. In terms of the stake. Well, as you know, we have dropped down agreements effectively with Birla going forward. So he can increase his stake so can equalize. And therefore, there is optionality for us. I think that's the best way of saying it. I mean, the India market has great long-term potential, it's had a very difficult time. I know we've said that in the past. We've had highs, we've had lows, let's see how it develops. But I would call it optionality for us. I was really pleased with the transaction that we did for Indus Towers. I think converting what was an illiquid stake into a liquid stake, with again, optionality to sell down our position while still effectively having a good degree of control of the asset. And then finally, I think it's a bit too early to say what my legacy will be. I just think we have a fantastic foundation, and Vittorio talked about the next chapter for Vodafone. Vodafone has always being a fantastic business and always been transforming. And I think we've done some big things over the last 5, 10 years in terms of transformation. It's a great foundation now also going forward. We've collected some fantastic assets. We've got a great team. And I really think that probably the one thing, if we look back 3, 5 years from now, being a real digital telco, where others might talk about it, the speed at which we are moving, I think, is really impressive. And we want to keep that speed, and if anything, accelerate.

I think we over to you. And then I will come back this side, Robert, then here, Stephen.

It's Robert from Deutsche Bank.

The real Robert.

The real Robert. Two questions for me. One on tax, actually. One of your competitors has flagged higher cash tax because of IFRS over the next couple of years. Is your guidance tax IFRS 15 free, Nick, already, so you've got some wiggle room there. Does it even affect Vodafone? And then secondly, coming back to 5G. I took onboard your reassuring comments on the fiber and the microwave. On the re-using the grid, the cell site grid, I assume your comments are based on using full-fat 5G at the higher frequencies, and that you can achieve that within your CapEx guidance rather than some refarming plan. This is a proper 5G 3.5 gigahertz that you can reflect in your guidance?

The second answer is yes. And the first one is?

And the first one is -- so we have a slightly -- whether it's unique, a different profile in the U.K. We carry a lot of capital allowances. And so where it might be an issue for others, having as S-15 with a higher profitability, effectively, it's not an issue for us. So we don't have any sort of cash tax impact over the next couple of years.

Let's go back here, and then we move this side. Yes.

It's Stephen Howard at HSBC. I wanted to ask you about tech-lash, the backlash that's underway against the OTT players and formed a central part of your address in Barcelona a few months ago. So first, a general question. What are the opportunities here that might be available to Vodafone, and indeed, the broader industry, now that the tech giants are coming under a lot of scrutiny? And then as a follow-up to that, it's a subset of the above. Can we talk about privacy? What do you think Vodafone's track record is on privacy? And is that something that you can leverage to your advantage? Or alternatively, do you think that there are potential pitfalls in that direction?

Yes. Both very good questions. And actually, it's one single question, really. So tech-lash, what is the opportunity for Vodafone? I think our opportunity is really on identity and security. These are the two things that, historically, Vodafone -- and I would say all telcos have been good at, and that customers value. And they are the things where the business model of the OTT, no matter how much they adjust and they have all the [indiscernible] that we are receiving these days with VR and so on, it's intrinsically difficult for them to do it because their business, most of the times, not Netflix, but the others, is based on advertising and on monetizing something about ourselves. So that is where we can have, I think, the biggest opportunity, which means that we potentially have -- and we are looking at it, but this is really for Nick to talk about it in the future, also, the potential advertising opportunity. Do we have a way to sell our data in a healthier way or to manage our data in a healthier way, contribute them to data sets of third parties in a way that is more consistent with what legislation and customers feel? Again, here, I -- the jury is out, and I give it to the future meetings to discuss. Privacy is linked, quite frankly, to identity and security. So I believe -- first of all, I believe that we are more sensitive than the average person in the street who -- so we should be careful in not overemphasizing. I always ask, when I go around our operating companies, I always ask to our guys, who has stopped using Google Maps? And by the way, who has stopped using Google Maps in this room? Because Google knows…

Last one?

Who wants to get the last one? Well, the second-last one. The last to Nick Delfas. The last to Nick Delfas. First, you. Yes.

I'll be brief. It's Guy Peddy from Macquarie. This is probably a question for Nick as much as anything. Looking at your EBITDA range, there's basically a €0.5 billion delta between the top and the bottom. And we seem to have focused on all the negatives this morning. Like Italy and Spain, where they are potential headwinds coming. What are the positives that you are looking at? Or which particular geographies have you got where you see that you might be able to deliver towards the higher end of your EBITDA range, rather than talking constantly about the bottom end of the range?

I think if you were talking to all the CEOs of the markets, they all feel like they will contributing to the top end of the range. So how we've set targets is that we push more stretch targets to each individual operating company, and then we take a view of the level of like combined risk at the group level. And you sort of basically get a feel for what we think is an acceptable. So what I'd say they're all targeting stretches. I would say the top end is more to do with how did Italy play out? Does Spain, through its repricing and actions, have a stronger second half? And so we've already got good plans, for instance, the U.K., Nick's in the front row here, contributing more, Germany continuing to contribute. And so I would say most of the portfolio is performing well. It's just more about where those two markets, how favorable or otherwise, they come out.

Nick.

Nick Delfas from Redburn. So I'm afraid it's quite a boring two questions for me. One question is just on Spain. Could you be a little bit more specific? We should expect, I guess, some kind of reinvestment in Spain in H1. And therefore, presumably, profits might go backwards. EBITDA might go backwards. Just want to...

The answer is yes.

Yes.

Yes. And then secondly, on South Africa, which we haven't spoken about at all. There seem to be quite a wide range of regulatory pressures on bundle pricing. Could you talk a little bit more about how you will respond to that? And what the impacts could be?

Yes. Bundle regulation that's come up. We're feeling that there are a number of items. Actually it's sort of -- it was a lot more extreme and has moderated. That's not to say that there aren't important changes coming. I'm not too sure we're looking them being a big hit, if you like, to the service revenue performance. I think there are things that we can put in place to moderate.

So no big impacts. Okay. All right.

You want the last, last one? I'm looking somebody who has not -- behind. Yes. Whatever. Anybody behind who is always disadvantage.

It's Georgios at Citi. I've got two questions. The first one on Italy. It's probably 2 years to early, this question. But there's been talk of NetCore and Open Fiber getting together. And I know there's a lot of between but you have some contractual agreements. I was wondering first to get your perspective of what you think about a combination? Secondly if your contractual agreements mean you'll get a sit on the table when the negotiation start? And my second question is on EBIT. There was an earlier question about being a key target and return on capital unemployed. Was a reduction I believe in the amortization this year? I just wanted to know if this, you believe, is aligned with the way Liberty is amortizing its own cable network so I want to understand what the performance of this.

There's a very simple answer to the -- I called it out in my presentation, which was in Germany, we basically felt that the cable [indiscernible]. We have very conservative accounting all lights with assets. And we've got to the point where that cable asset had a lot longer useful life than we were so we had to reset it. So that had the benefit.

Yes. And thank you for allowing me to conclude the session with the question on Italy. Listen, on a first of all, we're not comment on what's going on at the Italian business it is not our business. Our loyalty is to the Open Fiber project. So yes. We have a commitment there. But as soon as they deploy in areas where we are, we moved to them our lines. So we are completely committed to that, we are completely committed to Open Fiber. I met the CEO last week, we are -- they are on track to deploy and we will continue to work with them. And that's messae number one. Message number two, in case that there is a spinoff of network from Telecom Italia, first of all, we have to see whether it's a true spinoff or just a legal separation. Legal separation, as we have here functional even worse in the U.K., it is really not -- doesn't make any difference. If it is a true, true separation different shareholders to different thing. But the in that point, Open Fiber, we start talking to them. And whether it's possible to separate the network from Telecom Italia, I don't know. Maybe the fiber network, yes. Could the fiber network of Telecom Italia go together with Open Fiber? That will be fantastic for us. Any other combination, we will have to look and see it at the table as you say. And if you like it good, otherwise we will go to the trust table. But our main loyalty is to Open Fiber, and we will work with them until something changes in Telecom Italia.

I thank you all very much. It's always been a pleasure to interact with. We have one more interaction over phone for Q1. But let me tell you, I really enjoyed working with you, hearing your questions, being challenged. Been a great pleasure. So thank you. You have an important role in the market. And please keep doing it very well as you are. Thank you.