Matáv – The Beginning
Matáv Hungarian Telecommunications Company Ltd. was established on December 31, 1991 as the successor of the telecommunications company established when Hungarian Post that was split into three in December 1989. Until the end of 1993 the company remained a fully-owned state company.
On July 1, 1993 the Telecommunications Act entered into force; it qualified public telephone, mobile telephone and public pager services as concession services. So Matáv’s privatization tender could be invited both for obtaining national telephone concession right and buying Matáv shares. According to the contracts concluded on December 22, 1993 MagyarCom, a consortium of two telecommunications companies, Deutsche Telekom and Ameritech International acquired 30.1% ownership of the national telephone concession transferred on a mandatory basis to Matáv and the increased equity – for USD 875 million.
Regional Concession Tenders, Further Privatization
In February 1994 after the announcement of the regional concession tender results, local telephone operators were established. Matáv’s service area covering about 70% of the territory of Hungary and 72% of the population included 36 primary areas where the company provides local telephone service. In the second round of Matáv’s privatization MagyarCom obtained majority ownership of Matáv. According to the contract concluded on December 22, 1995 the ownership share of the two consortium companies increased to 67.3% for USD 852 million. On the basis of the combined value of the two rounds, Matáv’s privatization was up to then the largest privatization in the Central and Eastern Europe region and the largest foreign investment in Hungary.
Share Subscription, Deutsche Telekom obtains majority ownership
On November 14, 1997 Matáv share trading started simultaneously in Budapest and New York with 26.31% of the shares offered on the market, up to then the largest share subscription in Hungary. With this transaction Matáv became the first company in Central and Eastern Europe whose shares are listed on the New York Stock Exchange. In the summer of 1999 ÁPV Rt. (State Privatization and Holding Company) sold the remaining 5.75% share packet of the Hungarian state, but still kept the Golden Share.
According to a shareholder agreement between SBC and Deutsche Telekom on July 3, 2000 Deutsche Telekom bought SBC’s 50% ownership share in MagyarCom. As a result of the change in MagyarCom’s ownership structure, Deutsche Telekom’s ownership share in Matáv increased to 59.52%, the remaining 40.48% are held by the public, while the Golden Share is held by the Hungarian state.
Telecommunications Group, Liberalization, New LoBs
In 2001 Matáv could become an international telecommunications group when the consortium led by Matáv acquired majority ownership in Macedonia’s national telecommunications company Makedonski Telekomunikacii (MakTel), so MakTel became a consolidated subsidiary of the Group. As another step in the strategy Matáv purchased the remaining 50% ownership share in Emitel Rt., so in July 2001 Emitel became a fully-owned consolidated Matáv subsidiary that provides residential and business telecommunications services in the South Alföld region. On the basis of a contract concluded with Deutsche Telekom, in December 2001 Matáv acquired the remaining 49% of Westel and Westel 0660.
From 2001 Matáv introduced tariff and service packages tailored to the requirements of residential and business customers and from 2002 introduced new reduced-price packages for internet users. December 23, 2001 was the official date of full liberalization of the Hungarian telecommunications market. The area of fixed-line telephony was the last segment of telecommunications where the market was opened. The Group’s companies achieved the leading position in mobile telephony, internet and business data communication markets and obtained over 80% share on the fixed-line telephone market.
As a result of the restructuring announced in December 2000, at the end of 2001 the Group’s new management structure was approved. It serves the fulfillment of strategic goals and successful business activity through ensuring efficient operation.
In January 2002 a new company structure was introduced in which operations were based on four business areas: residential services, business services, internet and mobile.
In December 2002 the Matáv Group obtained a Group-level ISO 9001:2000 certificate from the largest independent quality inspection and certification body of the world, SGS (Société Générale de Surveillance SA).
Dynamic broadband, from Westel to T-Mobile, EU-compatible market competition
In December 2003 Matáv announced connection of the hundred thousandth ADSL line. During that year the number of towns where this service was available tripled to reach 128.
Since January 1, 2004 – when the Electronic Communications Act that introduced EU-compatible market regulation entered into force – fixed-line number portability is possible in Hungary, i.e. when a subscriber migrates to another service provider he can keep his existing telephone number. On May 1 number portability was introduced also by the mobile carriers with the support of the Ministry of IT and Communications.
In March 2004 Matáv’s Board made a decision to change Westel’s name and join one of the world’s leading mobile brands, T-Mobile. Since May 2004 the company’s official name is T-Mobile Hungary Ltd. It remained a fully-owned member of the Matáv Group.
Already before Hungary’s accession to the European Union in May 2004, the Matáv Group was recognized to have promoted with proactive contribution the creation of an EU-compatible, market-oriented and customer-focused regulatory environment.
From Matáv to Magyar Telekom, introduction of the T-brand
As part of its efficiency improvement program, on January 1, 2005 Matáv restructured the Group. The newly established Wireline Services LoB integrated the operations of the earlier Residential services LoB, Internet LoB and Network Systems LoB.
In December 2004 we submitted a bid at the open tender invited for the acquisition of Telekom Montenegro, the Montenegrin telecommunications company; it came in first and we acquired a 73% majority ownership of the company in March 2005. This success proved again that our experience and performance shown as international strategic investor is recognized by decision-makers in the South East Europe region.
On May 6, 2005 the Matáv Group was renamed Magyar Telekom Group in the largest rebranding in Hungary so far. The new name and full introduction in Hungary of the T-brand meant the beginning of a new communications era too. With the integration the advantages offered by a global background are directly accessible also for Hungarian customers thanks to the Deutsche Telekom Group’s experience.
The Magyar Telekom Group members, T-Com (earlier Matáv’s Wireline Services LoB), T-Online (Axelero’s successor), T-Mobile, T-Systems (earlier Matáv’s Business Services LoB) and T-Kábel (earlier MatávkábelTV) jointly offer the full range of telecommunications for residential, SME and large corporate customers.
In October 2005 the Board of Directors of Magyar Telekom proposed the merger of Magyar Telekom Rt. and T-Mobile Hungary Rt. On December 20 the extraordinary General Meeting of Magyar Telekom approved the proposal.
After registration of the merger at the registration court T-Mobile Hungary Rt. ceased to exist. Simultaneously, from March 1, 2006 the official name of Magyar Telekom became Magyar Telekom Telecommunications Public Limited Company, or Magyar Telekom Plc. for short.
T-Mobile continues to operate as an independent brand and independent business unit within Magyar Telekom, seamlessly providing services for its customers in an unchanged form.
According to the decision of Magyar Telekom’s Board of Directors as approved by the Company’s General Meeting, T-Online Hungary’s Internet access area and the regional fixed line subsidiary Emitel were integrated within Magyar Telekom as of October 1, 2007. T-Online Hungary’s web and content services business area continued to operate under the name Origo Media and Communications as a Magyar Telekom Group subsidiary.
On September 25, 2007 Magyar Telekom’s Board of Directors took a decision to change the management and organization structure of the Company, in order to raise the standard of services, improve cost efficiency and exploit new, innovative service and business opportunities. The decision to change the organization model shifted the focus from technology to the demands of customer segments. Consequently, the new management structure of Magyar Telekom determines the operating model of the Group on the basis of customer segments. The new management structure, developed in order to reach the strategic objectives and based on customer segments, was implemented with effect January 1, 2008.
From January 2008 the organization of T-Systems business unit was simplified through integration of subsidiaries in an effort to provide better service to customers and increase efficiency. The number of T-Systems subsidiaries was reduced from six to two, while retaining the flexibility and customer focus.
As part of Magyar Telekom’s integration processes, with effect June 30, 2008, iWiW and Adnetwork Online Marketing merged into Origo. iWiW is the most popular social site of Hungarian language Internet.
Following the Board of Directors decision in June 2008, Magyar Telekom introduced the T-Home brand in September, which replaced the T-Com, T-Online and T-Kábel brands and has become the single brand representing fixed line communications and entertainment services at home. The corporate “T” brand has been renewed simultaneously, and it functions as an umbrella brand for the brands offered by T-Home, T-Mobile and the T-Systems. Magyar Telekom’s new slogan “Life is for sharing” was also introduced and is used both by T-Home and T-Mobile. The rebranding has created a simpler brand structure, easier to identify for customers. Along with the introduction of T-Home brand, we also repositioned Magyar Telekom as Hungary’s only “double triple-play” provider, which, through T-Home and T-Mobile, offers Internet, television and telephone services on the fixed line and mobile networks alike, at home and on the move.
Based on the decision of Magyar Telekom's Board of Directors,an integrated strategy and corporate development management unit has been set up as of September 1, 2009, headed by the Chief Strategic and Corporate Development Officer. In order to enhance operational efficiency and leverage intra-group synergies, strategy and corporate development will be linked more closely than ever within the new unit.
According to the decision of Magyar Telekom’s Board of Directors as approved by the Company’s extraordinary General Meeting on June 29, 2009, the merger of Cable TV subsidiaries T-Kabel Hungary and Del-Vonal into Magyar Telekom was completed on September 30, 2009. The merger represents a further important step in Magyar Telekom’s integration process which is focusing on improving service quality and customer care as well as increasing efficiency and exploiting synergies.
In April 2010 the Board of Directors has decided on changes, effective as of July 1, to the management structure of the company, in order to further improve its effectiveness in responding to quickly changing market and economic conditions.
All consumer market product management, communications, market research and branding competencies have been combined under the Chief Marketing Officer. The Chief Sales and Services Officer has been appointed to ensure seamless end-to-end service to consumer market customers. A number of policy and governance functions including legal, regulatory, compliance, internal audit and security, operate under the Chief Legal and Corporate Affairs Officer. The new Chief Officers have become members of the Management Committee.
In order to reduce complexity in financial reporting and administrative costs Magyar Telekom delisted its American Depositary Receipts from the New York Stock Exchange effective as of November 12, 2010. The company will maintain its primary listing on the Budapest Stock Exchange and will continue to make English translations of its annual reports, financial statements, and investor releases.
In May, Magyar Telekom has embarked on another large scale modernisation of its mobile network. As the first stage of the modernisation, T-Mobile customers were able to experience the benefits of the super fast broadband services in the summer, te mobile Internet offering 21 Mbps speed. The upgraded mobile network will be able to serve many times the earlier network capacity and will also be ready for the new generation LTE (4G) technology.
In October, Magyar Telekom's mobile network modernization has arrived at a siginficant mileston: the operator launched an extended network test of the 4G/LTE technology involving customers. Telekom’s 4G/LTE based mobile internet service was launched on January 1, 2012.
In December, Telekom reached yet another important milestone: as first in Hungary it introduced an innovative satellite TV service offering interactive features. Using the Internet connection, interactive TV services will also be available to customers who had no access to the IPTV service earlier.
On January 1 Telekom as the first in Hungary launched its 4G/LTE based mobile internet service. By the end of the year, full outdoors 4G coverage has been achieved for Budapest residents and the possibility of using 4G mobile internet has opened up for nearly 27 % of the country’s population.
At its meeting held in June, Magyar Telekom’s Board of Directors approved the mid- and long-term strategic direction of the company’s operations. One of the first steps is the establishment of a new management structure. The changes, started from January 2013, will enable Magyar Telekom to exploit the new, innovative service and business opportunities by responding more flexibly to changes in customer demand and to market challenges. The company’s new organizational structure is also designed to enable Magyar Telekom to serve its customers in a high-quality, state-of-the-artand efficient way. In this framework the executive positions Chief Commercial Officer Residential and Chief Commercial Officer SMB have been created to head the management areas in charge of serving the respective customer segments.
In October, Magyar Telekom won the Excellence in Customer Service Award in the personal service category and it has come out first in the sales category of call center activities in the Top 10 Call Center competition. With this Telekom has been proven the country’s best among enterprises in the area of customer service. Telekom also won the Best HungarianEmployer and the Best Central Eastern European Employer title for the second time in the large enterprise category.
On October 1, 2012 T-Systems Hungary Zrt. began operations as the country’s sole service provider with a full-scale infocommunication technology (ICT) product portfolio. A 100%-owned subsidiary of Magyar Telekom, the company was brought to life through the merger of four long-established industry stakeholders in the Hungarian market: IQSYS, Dataplex and ISH merged into T-Systems Hungary on 30 September 2012 with Daten-Kontor having followed suit as of April 2013. T-Systems Hungary provides large corporations and the public administration and institutions comprehensive telecommunications and IT infrastructure and application development as well as systems integration services.
Magyar Telekom was unifying its branding architecture during 2013, moulding its earlier powerful product brands into a single brand and also introducing a new, more dynamic image. Customers in the future will be able to access every service, whether mobile or fixed line telephone, home or mobile internet, interactive TV, health or insurance, under the Telekom brand. For enterprise customers T-Systems Hungary continues to provide comprehensive ICT services under the T-Systems brand.
In September, Magyar Telekom’s frequency usage rights in the 1800 MHz and in the 900 MHz frequency band have been extended until 2022 by way of an amendment to authority contract with the President of the National Media and Infocommunications Authority. For Magyar Telekom, the amendment has secured the foundations for providing high quality mobile services in the future.
Magyar Telekom won the Excellence in Customer Service Award of 2013 in the telephone customer service (call center) enterprise category in October. With this Telekom proved to be Hungary’s best in call center services among enterprises.
Magyar Telekom has successfully acquired a total of 9 cable networks in Hungary during 2013. With a combined household coverage of 33,000, these networks have the capability of providing TV, broadband internet and voice services. These transactions have further increase Magyar Telekom’s high speed internet coverage and strengthened its market positions in fixed line services.