CommsUpdate Is 20!

By Tom LeinsDec 21, 2022


Since making its debut back in December 2002, our daily CommsUpdate newsletter has featured a staggering 82,000 telecom stories and now ranks as one of the most extensive telecom news resources in the world.

Born out of desk research for TeleGeography’s GlobalComms Database Service, CommsUpdate is produced by a team based in the historic city of Exeter in Devon, England.

CommsUpdate actually has its roots in the Communications Update newsletter launched by CIT Publications on September 6, 1999. CIT Publications eventually merged with TeleGeography to create the telecom research giant you now know. 

To celebrate the 20th anniversary of CommsUpdate, let's take a look at some of the choice telecom headlines of December 2002. We'll see what has changed in this ever-evolving industry—and what (if anything) has stayed the same. 

Vodafone’s continued decline prompts Gent to resign

Date: December 18, 2002
Country: UK

In one of the biggest news stories of December 2002, Sir Christopher Gent, CEO of UK-based Vodafone Group, announced his intention to step down in July 2003. The announcement came after Gent saw his company’s stock valuation slide from a high of $326.9 billion in June 2000, to $120 billion in December 2002.

After his appointment in 1997, Gent helped to build the company into the world’s largest mobile group, with 107.54 million subscriptions as of September 30, 2002.

In an uncanny echo of events two decades earlier, Vodafone Group announced the departure of current CEO Nick Read in December 2022. Margherita Della Valle was then appointed interim group CEO and tasked with "accelerating the execution of the company's strategy to improve operational performance and deliver shareholder value." 

With regard to operational metrics, Vodafone Group reported a mobile subscription base totaling 280.35 million as of September 30, 2022. Its market capitalization has decreased massively, however, and stood at just $30 billion as of December 2022.

Korea Telecom to merge its 2G and 3G units

Date: December 16, 2002
Country: South Korea

Also in December 2002, KT Freetel—the mobile subsidiary of South Korea’s Korea Telecom Corporation—confirmed that its board of directors agreed to merge the unit with KT ICOM, the group’s 3G mobile unit. The enlarged company targeted a March 1, 2003 relaunch.

The merger was designed to improve synergies between the two sister companies and avoid the duplication of marketing and infrastructure investments.

KT Corp, as Korea Telecom is now known, discontinued its CDMA-based 2G network back in 2012. While its 3G network is still operational, the provision of 5G mobile services is now the company’s top priority.

KT switched on a small-scale 5G network aimed at enterprise users in Gwacheon in December 2018, before inaugurating a commercial 5G service in April 2019. As of September 30, 2022, 7.962 million of KT Corp’s 19.138 million mobile subscriptions were utilizing its 5G network. 

Quam stumps up EUR150 million to conclude dealings with E-Plus

Date: December 20, 2002
Country: Germany

That same month, Quam agreed to pay EUR150 million in compensation to KPN of the Netherlands for withdrawing from a joint venture to construct a 3G network in Germany.

Quam, you may remember, was the defunct German mobile tie-up established between Telefonica of Spain and Finland’s Sonera, which fell apart in July 2002. Telefonica and Sonera embarked upon the pact with E-Plus—KPN’s German mobile unit—in September 2001. The parties involved planned to jointly develop a 3G network, including the sharing of cell sites and network equipment, but abandoned Quam due to concerns over the market and a poor take-up for its 2G service.

The German market underwent a landmark transformation in October 2014. This is when Telefonica Deutschland Holding completed the EUR8.55 billion acquisition of E-Plus from KPN, reducing the number of network operators from four to three and creating a new market leader.

The original E-Plus 3G network—which went live in 2004—was deactivated on December 30, 2021 and Telefonica focused its attention on its 3.5GHz 5G network. As of September 30, 2022, Telefonica was Germany’s largest mobile operator with 45.258 million subscriptions, or 38.8% of the market. 

As of September 30, 2022, Telefonica was Germany’s largest mobile operator with 45.258 million subscriptions, or 38.8% of the market. 

VimpelCom pursues expansion through acquisition

Date: December 18, 2002
Country: Russia

Russian mobile operator VimpelCom acquired 100% of the equity of Kaliningrad-based cellco Extel in December 2002. VimpelCom purchased a 49% stake from Norwegian telco Telenor and the remainder of the company’s shares from other investors. Telenor, which owned 25% of VimpelCom at that time, received around NOK45 million ($5 million) after tax from the deal.

It is worth noting that Kaliningrad Oblast is the westernmost federal subject of Russia. It is a semi-exclave, bordered by Poland and Lithuania and situated on the Baltic Sea.

Domestic expansion proved to be the tip of the iceberg for VimpelCom (now known as VEON). Having secured a nationwide Russian footprint, it expanded its services across a number of Commonwealth of Independent States countries before making acquisitive forays in Southeast Asia in 2008/2009.

In April 2011, the then-VimpelCom negotiated a $6.5 billion merger with Wind Telecom, a holding company owned by Egyptian telecoms tycoon Naguib Sawiris. VimpelCom assumed control of Wind Telecomunicazioni (Italy) and Egypt-based Orascom Telecom Holding, which encompassed telecom assets in Algeria, Pakistan, Bangladesh, Burundi, the Central African Republic, Canada, and Zimbabwe.

This strategy was unsustainable, however. The group has been at pains to streamline its portfolio over the decade since the Wind deal, and only owned a handful of operations as of December 2022. In November 2022, Amsterdam-based VEON agreed to sell its Russian operating division PJSC VimpelCom (Beeline) to senior members of the latter’s management team led by CEO Aleksander Torbakhov in a deal worth RUB130 billion ($2.15 billion).

When will Telkom be faced with a competitor? 

Country: South Africa
Date: December 19, 2002

South Africa’s attempts to introduce competition into the fixed voice market were met with a fresh hurdle in December 2002. The two bidders for a stake in a new fixed line operator—dubbed Sentech—failed to meet the criteria needed to make an offer.

The Goldleaf and Optis consortiums, which were both planning to submit bids for a 51% stake in the new operator, prompted concerns with their respective bidding credentials. With the bidding process in disarray, Telkom South Africa’s fixed line monopoly continued.

It was December 2004 before South Africa’s second national operator license was granted. That month, Neotel (now known as Liquid Telecom South Africa), was awarded a 25-year PSTN license by the Independent Communications Authority of South Africa.

At launch, the operator did not own any network infrastructure and was forced to operate via a wholesale agreement with Telkom for its first year of service. In March 2008, Neotel finally acquired its own network infrastructure when it purchased Transtel in a ZAR256 million deal, although it remained reliant on Telkom for last mile connection.

In truth, the emergence of Neotel has done little to diminish Telkom’s dominance over the last two decades.

In truth, the emergence of Neotel has done little to diminish Telkom’s dominance over the last two decades and the latter continues to claim the lion’s share of fixed broadband and fixed voice subscriptions in South Africa. Intriguingly, it is the threat of a takeover that may finally disrupt the status quo.

In 2022, we saw a takeover approach lodged for Telkom by MTN Group, the South Africa-based firm that owns mobile giant MTN South Africa. However, a rival merger offer from locally-owned mobile broadband operator Rain has complicated matters. Telkom looks set to decide on its planned course of action before the end of 2022.

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Tom Leins

Tom Leins

Tom Leins is a Senior Research Analyst for TeleGeography’s GlobalComms Database. Based out of the company’s UK office, he also contributes to the company’s daily CommsUpdate newsletter, which includes his popular weekly MVNO Monday round-up. MVNO industry aside, Tom has developed a strong specialization in the U.S., Latin America, and the Caribbean, tracking mergers and acquisitions, spectrum auctions, regulatory developments, market opportunities, and growth trends.