This demerger of BT's mobile communications businesses was part of a plan to strengthen the capital position of its shareholders following declining telecommunications industry valuations in the late 1990s. The companies involved in the demerger were BT Cellnet, which became O2 UK; Esat Digifone, which became O2 Ireland; Viag Interkom, which became O2 Germany; Telfort, which became O2 Netherlands; Manx Telecom (Isle of Man); O2 Airwave (UK); and Genie Internet, which split into O2 Online and O2 Asia.
After a five year period of independence (during which it disposed of its subsidiary in Netherlands to a private equity company, which reverted it back to the Telfort brand) the O2 group was acquired by Telefónica of Spain on 23 January 2006 in what was described at that time as the biggest all-cash takeover in the history of the telecommunications industry.
Following the £17.7 billion cash purchase by Telefónica the company was renamed Telefónica O2 Europe plc. At the same time (March 2006), Telefónica merged its Český Telecom and Eurotel businesses into Telefónica O2 Europe plc. Additionally, in 2006 O2 UK acquired a UK-based DSL broadband startup called Be Unlimited and the O2 group won a tender to become the 3rd mobile phone operator in Slovakia, forming a company trading as Telefónica O2 Slovakia. In 2007, the group disposed of O2 Airwave to a subsidiary of Australia's Macquarie investment group.
In June 2008, the company was renamed Telefónica Europe plc. The company has its group headquarters in Slough, UK, with its Irish Headquarters in Dublin, German headquarters in Munich, Czech headquarters in Prague, Slovak headquarters in Bratislava and Manx headquarters in Douglas on the Isle of Man. It has several hundred national retail outlets across these countries offering mobile phone, fixed telephony and broadband DSL products. By 31 July 2008 the company had 43.8 million customers in the UK, Germany, Ireland, Czech Republic, and Slovak Republic.
Originally launched in 1985 and trading as Cellnet, Telecom Securicor Cellular Radio Limited was a joint venture between BT Group (then called British Telecommunications) (60%) and Securicor (40%). In 1993 it launched GSM services in UK, and its analogue eTACS service was discontinued in 2000 as part of changes to the regulation of spectrum in the UK. In 1999 Securicor sold its remaining shares to BT and the company was renamed BT Cellnet and became a part of the BT Wireless family of companies within BT.
After demerger from BT in 2001, BT Cellnet became O2 UK, a subsidiary of mmO2 plc.
This subsidiary of Telefónica Europe is currently named Telefónica O2 UK.
Out of all the major UK network operators, Telefónica O2 UK has the largest number of subscribers.
Viag Interkom was created in 1995 as a joint venture of the German power supply firm VIAG (45%), British BT Group (then called British Telecommunications) (45%) and Norwegian Telenor (10%) in order to compete for official licence to provide services in the rapidly-liberalising German (fixed and mobile) telecommunications market at that time. In 2001 BT acquired VIAG's share (owned by German energy company, E.ON) for EU€11.4 billion following the German UMTS licence auction the previous year. Viag Interkom's mobile operations were transferred into the BT Wireless family and the fixed business became BT (Germany) GmbH & CO.
After demerger from BT in 2001, Viag Interkom became O2 Germany, a subsidiary of mmO2 plc.
This subsidiary of Telefónica Europe is currently named Telefónica O2 Germany.
Created in March 1997 as a 50:50 joint venture between British Telecommunications (BT) and Nederlandse Spoorwegen (the Dutch national railways operator) and headquartered in Amsterdam, Telfort was awarded a licence by the government of Netherlands to provide fixed telecommunications services in November of that year, and a mobile licence was awarded the following year. In 2000, the mobile operations of Telfort became a part of the BT Wireless family.
After demerger from BT in 2001, Telfort became O2 Netherlands, a subsidiary of mmO2 plc.
In 2003, O2 group sold the company to Greenfield Capital Partners which reverted the company back to the Telfort name. Telfort eventually became a wholly-owned subsidiary of KPN.
Digifone was created in 2000 as the demerged mobile business of the prior Esat Digifone which had just been purchased by BT. Esat Digifone was originally a joint venture between Esat Telecom and Telenor. After the acquisition of Esat Telecom by BT the Telenor share in Esat Digifone was also acquired by BT. Subsequently the fixed operations, Esat Telecom later became BT Ireland and the demerged mobile operations, rebranded without the Esat name as Digifone, became a part of the newly formed separate company, mmO2 plc.
After demerger from BT in 2001, Digifone became O2 Ireland, a subsidiary of mmO2 plc.
This subsidiary of Telefónica Europe is currently named Telefónica O2 Ireland.
Genie Internet Ltd and Genie Asia were created as an autonomous but wholly-owned subsidiaries of BT in 2000. By the time it became a part of the BT Wireless family of companies in 2001, Genie had mobile portal operations UK, Germany, Spain, Italy, Netherlands, Hong Kong and Japan and an Internet MVNO operation in UK called Genie Mobile. Prior to the demerger of O2 from BT, Genie scaled back its global operations in order to align with the mobile businesses demerging with it; namely UK, Germany, Ireland and Netherlands. The Genie Asia business continued portal operations in Asia.
After demerging from BT in 2001, the European Genie business became the basis of a central products and services division called Products O2 and the Genie Mobile business was re-branded to O2 Online which continues in the UK as a mobile communications service provider tied to the O2 UK network. The Genie portal properties were re-branded O2 Active in UK, Germany, Ireland and Netherlands, and the Genie Asia became O2 Asia where the operation shifted focus to developing own-brand PDA and smartphone devices (branded O2 Xda) for both the Asian and European markets. For governance purposes following divesture in 2001, O2 Asia was parented on O2 UK. In 2008, it is believed that O2 Asia was sold to a private consortium as part of a management buy out transaction.
Manx Telecom was demerged from BT as part of the mmO2 flotation in 2001. Unlike some of the company's counterparts, the fixed and mobile arms of Manx Telecom were not split prior to the demerger, which meant that Manx Telecom was the mmO2 group's only fixed operation at the time.
After the demerger from BT in 2001, Manx Telecom continued to trade under its brand as a subsidiary of mmO2 plc.
In February 2004, the company was subject to rumours of take-over bids from KPN, the Dutch telecommunications group though these never came to fruition. In 2005 rumours of KPN (and several other international network operators) bidding for the various branches of O2 persisted, though following the company's posting of better than expected results so soon after demerging some speculation shifted to O2 itself making bids for other businesses.
In March 2005, the company underwent a corporate reorganization, that saw mmO2 plc being de-listed from the London Stock Exchange and acquired (via a share swap) by a new company, O2 plc, which was listed on the LSE in its place. The summer of 2005 saw the company under threat of crippling strike action by Communication Workers Union members following disputes over pay and remuneration, though unrelated to earlier job losses as part of the reorganization. This was resolved without strikes taking place after several months of negotiations between the company and the trade union.
October 31, 2005, O2 plc agreed to be taken over by the Spanish telecommunications giant Telefónica with a cash offer of GB£17.7 billion (EU€26 billion) or GB£2 per share. According to the merger announcement, O2 plc retained its name and continued to be based in the UK, keeping both the brand and the management team. The merger became unconditional on January 23, 2006 and O2 is now a wholly owned subsidiary of Telefónica.
Following the completion of the acquisition of O2 group by Telefónica in February 2006, the new parent undertook a corporate organisational change that saw the merging of its fixed and mobile businesses in Spain, and the transfer of the Telefónica's non-Spanish European telecommunications properties into the O2 family. Thus, the Český Telecom and Eurotel operations in the Czech Republic as well as the Telefónica Deutschland business in Germany were brought into the governance of the O2 group, which retained its UK-registered public company status with its own board of directors and corporate governance structures and processes.
Telefónica chose to keep their pre-existing cell phone operations in the rest of the world under the name Movistar. This name is used in Spain and in most of Central and South America, worked by a separate management team.
Český Telecom was the new name given to a company previously known as SPT Telecom which was formed from the splitting off of the Czech Ministry of Posts and Telecommunications into postal and telecom sides in 1993. The company was renamed to Český Telecom in 2000 and remained a government-controlled company until its complete privatisation in 2004. Along the way, rapid modernisation of the network occurred with the help of funding and expertise of the Dutch and Swiss consortium called TelSource.
In parallel to the evolution of Český Telecom, the Eurotel mobile phone business was established in 1990 in a joint venture between what was then known as the Czechoslovakian telecom ministry, Bell Atlantic and US West. In 1996, GSM services were introduced, and in 2003 Český Telecom acquired full control of Eurotel.
The Czech Republic government sold its remaining stake in Český Telecom (along with its Eurotel subsidiary) to Telefónica in 2005 which renamed it to Telefónica O2 Czech Republic.
In May 2006, the introduction of "My Europe" was announced by O2 and Telefónica. It will represent the first joint venture between O2 and Telefónica to lower roaming charges in Europe, however it does not eliminate charges for receiving calls, and as stated by the site, other charges "comparable with domestic call rates". Despite its name, the service is only available to customers of Telefónica or O2, within the EU, who also stay within the EU, as opposed to a geographical Europe. Since it applies to the EU only, it has been speculated that this is probably a response to Viviane Reding's plans to ban roaming charges by mobile networks within the EU, or more specifically, "require that international [within the EU] roaming charges are not higher than national roaming charges."
In the summer of 2006 O2 was awarded the contract to manage and supply the network and data networks for the Automobile Association's 3600 strong mobile patrol force. This contract was previously handled by Vodafone and is currently O2's largest corporate contract.
In August 2007, O2 launched their own branded music handset O2 Cocoon, gaining favourable reviews across the market.
In July 2007, it was reported by numerous papers that O2 had won the contract to exclusively supply network services for the iPhone in the UK. This was confirmed on 18 September and the iPhone became exclusively available on the O2 network on 9 November 2007.
O2 Asia, headquartered in Singapore, operating in Far East, South Asia, Middle East, and Australasian countries, used to develop and market a range of wirelessly connected PDA and smartphone products branded Xda. This subsidiary has been taken over by its CEO in a buyout per 2007. It continues to develop and market such products under the "MWg" brand, short for Mobile & Wireless Group.
The following table shows the current scope of operations for the companies in the O2 group:
|O2 Business||2G licences||3G licences||Fixed||DSL||Devices|
|Telefónica O2 UK||GSM/GPRS/EDGE 900/1800||UMTS and HSDPA (1.8 Mbit/s & 3.6Mbit/s)||ADSL 2+ via Be Unlimited||XDA range and own-brand ODM|
|Telefónica O2 Germany||GSM/GPRS 900/1800||UMTS and HSDPA (3.6 Mbit/s)||ADSL+ via Telefónica Deutschland||XDA range|
|Telefónica O2 Ireland||GSM 900/1800||UMTS and HSDPA||XDA range|
|Telefónica O2 Czech Republic||GSM 900/1800||UMTS, HSDPA and CDMA2000||Incumbent||ADSL+|
|Telefónica O2 Slovakia||Awaiting Info||Awaiting Info|
|Manx Telecom||GSM 900||UMTS and HSDPA||Incumbent||ADSL+|
|O2 Asia||XDA Range|
Telefónica Europe's turnover for the year ended 31 March, 2005 was GB£6.683 billion. They have strong strategic partnerships with companies such as Apple, manufacturer of the iPhone, Research in Motion, manufacturers of the BlackBerry email product, and HTC, manufacturers of the O2 Xda, Xda II, and Xda Exec Pocket PC devices.
Telefónica O2 is the sponsor of the Irish rugby team. The partnership went interactive in 2006, when Ireland fans were offered access to daily updates from head coach Eddie O'Sullivan. It also is a sponsor of the England rugby team. In 2003 Telefónica O2 launched a mobile video service in that allowed customers to download or stream video content related to the 2003 Rugby World Cup. Telefónica O2 extended their involvement with rugby union in 2005, signing a new deal with the England rugby team and the Rugby Football Union, as well as O2 rugbyclass and Premier Rugby Ltd for the English Premiership. Telefónica O2 also had a long standing relationship with Arsenal F.C., being their shirt sponsor until the start of the 2006/07 Premiership season. In 2005 a three-year deal was signed that saw Telefónica O2 as exclusive Mobile Communications Partner. In June 2006 O2 Ireland were represented on the jerseys of the Irish rugby team as they played the All Blacks, replacing previous sponsors Permanent TSB. In addition, they also sponsor Amateur Rugby League club, Runcorn Vikings as well as the Cork Gaelic Athletic Association teams. Also sponsors the O2 wireless festivals in London and Leeds each year.
Telefónica introduced the O2 brand in the Czech Republic, to brand its mobile service (Český Telecom and Eurotel became Telefónica O2 Czech Republic). This has led to speculation that the O2 brand may replace Telefónica's movistar brand. In 2005 the company acquired the naming rights of the UK's Millennium Dome which is now a large entertainment and leisure venue specialising in music and sports operated by Anschutz Entertainment Group and is officially known as The O2.
Notably the company also sponsors the "O2 Cheerleaders" team in the company's Czech unit .
Isle of Man (as Manx Telecom)