Magyar Telekom

Magyar Telekom Nyrt.

Company type	Public limited company
Traded as	BPSE: MTELEKOM BUX Component CETOP20 Component
Industry	Telecommunication
Founded	1991
Headquarters	Budapest , Hungary
Area served	Central and Eastern Europe
Key people	Rékasi Tibor (CEO)
Products	Fixed Telephony, Mobile Telephony, Broadband Internet, IT Services, Networking Solutions, Digital TV
Revenue	US$2.698 billion (2012)
Operating income	US$263.7 million (2012)
Net income	US$203.86 million (2012)
Total assets	US$4.702 billion (2012)
Total equity	US$2.320 billion (2012) (on US$225.1/HUF)
Number of employees	10,870 (2014)
Parent	Deutsche Telekom (59.21% of shares)
Subsidiaries	Makedonski Telekom
Website	www.telekom.hu

Headquarters of Magyar Telekom in Budapest

Dr. Robert Haubner, Chairperson of Magyar Telekom's Board since April 2017

Tibor Rékasi, Magyar Telekom's Chief Executive Officer

Magyar Telekom Nyrt. (officially Magyar Telekom Távközlési Nyilvánosan Működő Részvénytársaság, Magyar Telekom Telecommunications Public Limited Company lit. 'Hungarian Telecom Telecommunications Public Limited Company') is the leading Hungarian telecommunications service provider company. It is a subsidiary of Deutsche Telekom. Deutsche Telekom AG holds a 61.39% stake in Magyar Telekom Plc.

The company provides telecommunications and info-communications (ICT) services, including fixed and mobile voice and data services, as well as IT and systems integration services. It offers its services under the Telekom brand for residential, small and medium-sized business customers, and under the T-Systems brand for enterprise, public administration and institutional customers. Magyar Telekom Plc. is the 100% owner of T-Systems Hungary Zrt. and the majority owner of Makedonski Telekom, the leading integrated telecommunications operator in North Macedonia.

Until 6 May 2005, it was known as Matáv (Magyar Távközlési Rt. – Hungarian Telecommunications PLC). The company was formed under the name of Magyar Távközlési Vállalat (Hungarian Telecommunications Enterprise) in December 1989, when Magyar Posta (Hungarian Post) was split into three separate enterprises. On 31 December 1991, the company was re-structured as a public limited company as Magyar Távközlési Rt., and the company remained in 100% state ownership until the end of 1993. On 1 July 1993, the Telecommunications Act came into effect, making it possible to privatize the company. A consortium was formed between Deutsche Telekom and Ameritech, which was named MagyarCom, and bought into the company a share of 30.1% for a price of US$875 million.

History

Early years

On 31 December 1989, after becoming one of the three sections of the Hungarian Post service area, the Hungarian Telecommunications Company (Matáv) was founded in 1991 on 31 December as telecommunications operator Magyar Telecom Rt. The company was completely owned by the state until the end of 1993, when the Telecommunications Act, which is classified as a service concession to the public telephone, mobile telephone, paging and public service, came into effect 1 July 1993. A contract ended on 22 December, and Matáv became the owner of 30.1% of Deutsche Telekom and Ameritech International telecommunications companies, MagyarCom Consortium. During the privatization process MagyarCom acquired a majority stake under the contract signed on 22 December 1995. The effect of the two companies forming a consortium of $852 million to 67.3% was Central and Eastern Europe's largest privatization, and also the largest foreign investment in Hungary.

Deutsche Telekom's majority

On 14 November 1997, the trading of Matáv shares began in Budapest and New York City, placing 26.31% of the shares on the market, which was the largest share subscription ever held in Hungary, making Matáv the first Central European company to be listed on the New York Stock Exchange. In the summer of 1999, ÁPV Rt. (Hungary's State Privatization Property Agency) sold the last package of shares of Hungary's 5.75%, but still held the golden share.

On 3 July 2000, in accordance with the shareholder agreement between SBC and Deutsche Telekom, Deutsche Telekom acquired SBC's 50% stake in MagyarCom. As a result of the change in the ownership structure of MagyarCom, Deutsche Telekom's ownership in Matáv increased to 59.52%, the remaining 40.48% public shareholding, while the golden share was owned by Hungary.

Internationalization

Since 2001, it was possible for Matáv to become an international telecommunications group. The consortium led by Matáv acquired a majority stake in Macedonia's national telecommunications company Makedonski Telekomunikacii (MakTel), which became a consolidated subsidiary of the group. As a further step, Matáv acquired the remaining 50% stake in Emitel Rt.

The group's companies took leading positions in the mobile phone, internet and business data communications markets, with a share of over 80% in the fixed phone market.

A new governance structure of the group was adopted at the end of 2001. As of January 2002, a new corporate structure was introduced, where four business areas were the basis for the operation: retail services, business solutions, Internet, and mobile.

Rebranding

In 2002, the Matáv Group obtained group-level certification in accordance with ISO 9001:2000, certified by SGS S.A.

Matáv also wanted to lead telecommunications and Internet services in Hungary, as evidenced by the 100,000th ADSL subscription acquired in December 2003. In mobile telephones, number portability was a minor difficulty, but the Westel division of the group solved the problem in 2004.

In March 2004, the group decided to replace the Westel name, which had existed since 1989, and joined the global T-Mobile brand on 1 May 2004. Subsequently, the Matáv Group decided to consolidate and merge, subordinating the structure of the group of companies on 1 January 2005, and then on 6 May all its services and operational organizations under central management and the group of companies. It changed its company name, and from that date, the Magyar Telekom Group operated as a group of "T" brand names.

On 8 November 2005, Magyar Telekom agreed to purchase Orbitel (Bulgaria's telecommunications provider), a transaction that ended on 3 February 2006.

The merge caused T-Mobile Magyarország Rt. and Magyar Telekom Rt. to stop existing, and András Sugár, CEO of T-Mobile, resigned. At the same time, Magyar Telekom Távközlési Nyilvánosan Működő Részvénytársaság took over their role from 1 March 2006.

2007

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.

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.

2009

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.

2010

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.

Leaving the New York Stock Exchange

In order to simplify the structure of financial reporting and reduce administrative costs, Magyar Telekom withdrew from the New York Stock Exchange on 12 November 2010, while continuing its listing on the Budapest Stock Exchange.

2011

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.

2012

4G technology in Hungary

On 1 January 2012, Telekom was the first telecommunications company in Hungary to launch its 4G/LTE-based mobile Internet service, which provided full outdoor 4G coverage of Budapest and 4G mobile internet to almost 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.

2013

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.

2014

The Government of Hungary and Magyar Telekom signed a partnership agreement in February. The Government and the market-leading telecom group have established a long-term cooperation for the country’s digital development. The goal is to estabish a Digital Hungary, through providing broadband Internet for all, promoting digital literacy and increasing the competitiveness of businesses.

From May Telekom as first in Hungary offered the experience of „multi-screen” TV. Using the TV GO service customers can follow TV programs anywhere in Hungary, on various devices: tablets, notebooks and smartphones. The innovative product, based on Telekom’s integrated service provider and network operator capabilities, properly addresses the latest content consumption trends.

In October Telekom was the first among market players to start using the new frequency blocks won in the tender procedure and through this it has immediately expanded the nationwide 4G residential coverage of its 4G mobile broadband network to 73% and increased its download speed to the highest achievable level, up to 150 Mbit/s.

Christopher Mattheisen, Magyar Telekom’s CEO announced in November that Magyar Telekom launched extensive developments in order to implement Digital Hungary, the first stage of which will be the city of Nyíregyháza. The pillars of the development program: development of digital infrastructure, digital services and digital competencies.

Magyar Telekom won in November the „Excellence in Customer Service – Best Online Customer Service” Award. With this Telekom proved to be the country’s best in the area of online customer service through its customer service provided via the corporate website www.telekom.hu.

2015

Magyar Telekom and Telenor Hungary entered into a cooperation agreement for the joint development and operation of their 4G networks. The main goal of the agreement is to provide 4G coverage and 4G mobile Internet for customers in rural areas as early as possible. As a result Telekom increased its nationwide residential 4G coverage to 97% i.e. almost complete by the end of 2015.

Magyar Telekom acquired 100% stake in the alternative ICT provider GTS Hungary from Deutsche Telekom. With the transaction completed in April Magyar Telekom has further strengthened its positions in the business services market.

Magyar Telekom and MET signed an agreement in March to establish an equally shared joint venture that provides gas and electricity services for business customers. E2 Hungary will enter the market of business energy services with favourable terms and competitive offers on January 1, 2016. As of this date, Magyar Telekom’s B2B energy service operations were transferred to the new company.

Magyar Telekom has signed in May an agreement to build the company's new headquarters and take a long-term lease on it. According to plans the company will relocate in the second half of 2018 to its new operating center to be built in the spirit of sustainability, which will meet the 21 st century requirements. The construction works are to begin in the first quarter of 2016.

Magyar Telekom signed an agreement in December to sell its 100% shareholding in Origo Zrt. to New Wave Media Kft. The transaction is in line with Magyar Telekom’s increased strategic focus on its core business and on further strengthening its free cash flow generation.

In 2015 Telekom’s fixed line broadband internet service became available to further 440,000 households. As a result of developments Telekom’s high speed internet coverage increased to more than 2.2 million homes, and in line with Telekom’s goals, the broadband service coverage of rural regions improved significantly.

Controversies

In July 2017, T-Systems Hungary, a subsidiary of Magyar Telekom, launched an online ticket service for BKK, the unified transport operator of Budapest, Hungary. The application allegedly contained multiple security bugs. T-Systems Hungary reported online attacks on the application to the local authorities. One major bug was reported to BKK by an 18-year-old student, who was later detained by the police in the middle of the night, causing a public outcry, as it was revealed that the detention was ordered after the report by T-Systems. Many comments and negative ratings were added to T-Systems and BKK's social media pages.

External links

• Official website
• Today Matáv has officially changed its name to Magyar Telekom (article)