Proximus Group

Proximus Group

Type	Public limited company
Traded as	Euronext: PROX
Industry	Telecommunications
Founded	1930 (as RTT)
Headquarters	Brussels, Belgium
Key people	Dominique Leroy (CEO), Stefaan De Clerck (Chairman)
Products	Fixed line and mobile telephony, internet, digital television, IT services
Revenue	€6.112 billion (2014)[1]
Operating income	€933 million (2014)[1]
Profit	€654 million (2014)[1]
Total assets	€8.522 billion (end 2014)[1]
Total equity	€2.779 billion (end 2014)[1]
Number of employees	14,187 (FTE, end 2014)[1]
Subsidiaries	BICS, Scarlet, Skynet, Tango.
Website	www.proximus.com

The Proximus Group is the largest telecommunications company in Belgium, headquartered in Brussels.^[2] Proximus Group is primarily state owned, with the Belgian state holding 53.3% + 1 share. Proximus Group offerings include fixed line and mobile communications through the Proximus brand and ICT services to the professional market under the Telindus brand.

The main legal entity of Proximus Group is Proximus NV/SA, which following integration in 2010 includes the mobile activities of former subsidiary Proximus (Belgacom Mobile) and the ICT services of former subsidiary Telindus (Belgacom ICT). Subsidiaries include Belgacom International Carrier Services, Skynet, Tango, and Scarlet.

Since September 2014, Proximus becomes the commercial brand of all Belgacom products.

History

The start of telephony in Belgium

In 1879, the Belgian telegraph service installed a telephone line at the Parliament. That same year, several private contractors submitted requests to operate the telephone networks in various Belgian cities. The lack of legislation during the first few years of operation reduced the telephone network’s chances of developing. It also forced the Belgian authorities to develop a legislative framework to regulate the operation of telephony in Belgium.

In 1896, the whole telephony sector passed into the hands of a public company.

In 1913, a large portion of Belgium was accessible by telephone. Although the number of subscribers was still small, the majority of railway stations, post offices and telegraphs were equipped with public telephone booths.

After World War I: the shift to an autonomous public-sector company

World War I had caused a complete and utter suspension of telecommunications in Belgium. One of the reasons for this was the financial dependency of the public company. The damage caused during the war and the dismantling of parts of the networks meant that colossal investments were needed to manage the telegraphs and telephones.

The national telegraph and telephone company (Régie des Télégraphes et Téléphones, RTT) was set up on 19 July 1930. The public-sector company thus became autonomous: it was no longer dependent on annual State budgets and was authorized to carry out its own management.

Inclusion of the RTT in the state industrial policy

When the RTT was created, huge sums were invested in the Belgian telephone network. More and more sectors of society now had access to telephony. At the same time, another development was unfolding that would quickly entail a major expense for the company.

During the economic crisis of the 1930s, the State would involve the RTT in its industrial and employment policy. In an attempt to reduce the high unemployment rate in the sector the State forced the entire Belgian telephone network to become automated. This development strongly restricted the autonomy of the RTT. Although the law of 1930 explicitly stated that the company could draw up and implement an investment plan in an autonomous manner, by imposing its employment policy, the State was going against the basic principle of the law. After the war, this would soon become a structural problem for the RTT.

From a leading-edge company to crisis: the RTT in the post-war period

After World War II, the RTT was faced with considerable damage and the dismantling of part of its networks. To give a quick boost to the sector, the State decided to intervene financially.

During this period, the demand for telecommunication services increased at an alarming rate. The number of subscribers quickly rose from approximately 350,000 in 1946 to 522,000 in 1951 and 1,049,000 in 1965. This growth in the customer base led to a very high rate of investment. Thanks to this, towards the end of the 1960s, the RTT found itself at the forefront of social and technological development.

But this expansionist approach had a negative side. From the late 1960s, the losses began to accumulate. And the global economic crisis in 1973 did not help matters: the company’s financial situation only worsened. This situation would lead the RTT to carry out major reorganization programs during the mid-1970s.

During the 1980s, it became clear that the telecommunications sector would become one of the key development poles at the end of the 20th century. Thus, in 1981, the RTT management began a major reorganization to solve certain structural problems within the company.

During that period, another player entered the scene. In 1987, the European Commission published its Green Paper on telecommunications, which focused on liberalization.

The 1990s: the Belgacom law and the evolution of the sector under European influence

The Green Paper of 1987 was incorporated into the Belgian law of 21 March 1991, which created a new type of public-sector company with greater management autonomy. The Belgian telecommunications sector was thus reorganized and saw the creation of Belgacom, an autonomous public-sector company. This law aims to create an environment that is favorable to the competitive development of the telecommunications market in Belgium. From now on, a management contract had to define the prerogatives of the company and the public authorities in order to guarantee the offer of a certain number of general utility public services and a wider management autonomy than that provided for in the law of 1930.

In 1994, the European convergence process began to accelerate. In a new Green Paper, the European Commission declared that the operation of the networks and telephony must also be open to competition. 1994 was also the year in which Belgacom founded Proximus, Belgium’s first mobile network.

On 1 July 1994, this activity, as well as the old analog Mob2 system, was transferred to a subsidiary, Belgacom Mobile, with the following shareholding: 75% Belgacom – 25% Air Touch, then Vodafone in 1999.

At the same time, Belgacom faced competition by forming partnerships with Ameritech, Tele Danmark and Singapore Telecom. Various Belgian financial institutions responded by forming a consortium, which was called ADSB. The Belgian State holds 50.1% of the shares and therefore remains the main shareholder.

The BeST plan, which was mainly aimed at restructuring the company and dividing it into four "business units," was implemented in 2001. Belgacom also disposed of certain activities such as Belgacom France, Ben, its security activities as well as the French activities of Infosources.

The human dimension of the BeST plan was implemented in the course of 2002. The company, which employed too many staff at the time, had many reasons for adopting this plan: voluntary offers for departure, part-time work and reconversion were proposed to a large portion of the staff.

In an increasingly open market, in which competition is more aggressive by the day, Belgacom decided to bet on the future by radically changing its image in 2003. A change of logo, colors and the promise to be closer to its customers were the bases on which the former RTT began to work.

These radical changes in the company’s philosophy were followed by the operator’s initial public offering. On 22 March 2004, Belgacom was listed for the first time on the Euronext stock market. The Belgian State remains the majority shareholder with 50% + 1 of all shares, while the ADSB consortium sold all its shares.

This enabled the Belgian incumbent operator to free considerable sums to finance its objectives. Indeed, the time has come for broadband, and the funding of the Broadway project (to cover the whole Belgian territory with fiber optic cables) requires huge investments.

2004 was also the year in which the incumbent operator carried out its first digital TV tests with a view to finding new sources of income in an increasingly competitive market.

From 2005 to 2010: consolidation, convergence and first bundled offers

2005 was marked by two important events for Belgacom: the launch of Belgacom TV and the takeover bid on Telindus. The first signs of digital TV in Belgium appeared in 2004, when Belgacom started its first digital TV tests in a few hundred homes. In May 2005, the Belgian operator took the market by surprise when it acquired the rights to broadcast professional Belgian football (D1 & D2) for the next three seasons through its subsidiary Skynet iMotions Activities.

This step anticipated the imminent launch of Belgacom TV in June 2005. This digital TV offer via ADSL was the first of its kind in Belgium and transformed Belgacom into a quadruple player, offering fixed telephony, mobile telephony, high-speed Internet as well as television. It also enabled the Belgian company to secure new sources of income, given that the profit margins on its traditional activities are becoming increasingly reduced.

2005 was also the year of the takeover bid on Telindus, a leader in the network integration sector. An initial bid, considered "hostile" by the Telindus management, was made in September. This marked the start of a stock-market saga that would go on for almost four months. Tensions were high between the two companies, and the different stakeholders fought it out in the press. After a counter bid launched by France Télécom, Belgacom eventually carried the day, arriving at a conditional partnership agreement with Telindus in late December. Belgacom had responded by increasing its bid for Telindus, which enabled the conditional partnership agreement to be reached.

In August 2006 Belgacom the acquisition of Vodafone’s 25% share in Proximus, giving the firm a wholly owned quadruple play offering.^[3] The firm subsequently launched its first bundled offers between Belgacom and Proximus.

At the end of March 2009, the company had more than 555,000 Belgacom TV customers. The coverage rate of digital television increased to 80% of the population.

On 26 June 2008, Belgacom announced an agreement to acquire Tele2's Luxembourg division (including the Tango cellular network in Luxembourg and Liechtenstein).^[4] Later the same year Belgacom completed the acquisition of broadband provider Scarlet for €175 million. The Belgian competition authority allowed the deal to go ahead after Belgacom agreed to some divestments, including Scarlet's fibre network.^[5]

On 4 January 2010, Belgacom Group completes the full integration of its subsidiaries Belgacom Mobile SA/Proximus, Telindus NV, Telindus Sourcing SA, the activities of Belgacom Skynet SA and the Belgian activities of Telindus Group NV into Belgacom SA to form one legal entity. The other subsidiaries remain separate legal entities.

On 4 September 2010, Didier Bellens announced the future launch of a second platform (called 'platform n° 2' for the time being) next to Belgacom TV.^[6][7] This platform will focus on interactivity and online gaming services.

Main brands and activities of the group

Proximus NV/SA

The Belgacom brand was established in 1992, following the dissolution of the RTT. As the company changed its articles of association several times to comply with national and European legal provisions, its logo changed with it. The very first logo, with the inverted orange arrows, was replaced by a more "human" logo. On 4 January 2010, Belgacom NV/SA absorbed the activities of mobile operator Proximus and ICT services provider Telindus, thus ending their existence as subsidiaries.

Proximus Mobile (Belgacom Mobile)

The Proximus brand was created in 1994, following the launch of the first mobile network. In 2005, an Interbrand study^[8] found Proximus to be the second brand in Belgium.

Proximus offers a wide line of products and mobile telecommunications services to its residential and professional customers, therefore having the largest HSDPA coverage in Belgium.^[9] In 2010, Belgacom ended the existence of Belgacom Mobile as a separate legal entity and absorbed all of its activities into Belgacom SA.

Proximus TV (Belgacom TV)

Proximus TV is the brand of the digital TV offer in Belgium, launched by Belgacom in the summer of 2005. It was the first offer of its kind in the country. Proximus TV currently holds 18% market share of digital TV in Belgium.^[10] In the Summer of 2011, Proximus launched a new service called 'TV Overal' (in Dutch) or 'TV Partout' (in French). People can download this free application from the Android Market or the AppStore. It lets you watch TV on your Smartphone or Tablet over a mobile network connection (with 1 hour free per day for Proximus Internet Everywhere customers) or over a WiFi connection.^[11]

Scarlet

Scarlet was founded in the Netherlands in 1992. The brand aims to offer its customers basic low-cost products in the areas of fixed and mobile telephony and the internet.

Skynet

Skynet was founded in 1995. At the time, it was one of the first commercial Internet providers in Belgium. From 2005, following Belgacom's takeover of the Group's Internet activities, the Skynet brand continued to exist but only in association with the Group's Web content activities.

Tango

Tango is the company under which the Belgacom Group markets its offers in Luxembourg and Liechtenstein. The company, which was launched in 1998, has become the second-largest mobile player on the Luxembourg market.^[12]

Telindus (Belgacom ICT)

Telindus was created in June 2006, following the purchase of Telindus by Belgacom. Since then, the ICT activities of the Belgacom Group have been offered under the Telindus brand, which accordingly changed its logo and brand style. The new Telindus brand was inspired by the changes Telindus has undergone since it was first founded, i.e. from being a technology supplier to a solution, integrator and sourcing partner. In 2010, Belgacom ended the existence of Telindus as a separate legal entity and absorbed all of its activities into Belgacom SA.

BICS (Belgacom International Carrier Services)

BICS (Belgacom International Carrier Services) was founded in 2005 and is a joint venture between Belgacom, Swisscom Fixnet and MTN Group. The company operates in the telecommunication industry and is responsible for international carrier activities. It provides wholesale carrier services to wireline and wireless operators, and service providers globally.

Other companies and activities within the group

PingPing

PingPing is the neutral, independent brand of Mobile-for grouping all the mobile micropayment activities.

Euremis

The Euremis brand represents the experience of Belgacom Group in CRM mobile solutions. Under the Euremis brand, Belgacom offers mobile customer management solutions to sales staff in the FMCG (Fast-Moving Consumer Goods) and pharmaceutical sectors. Euremis was founded as an independent company in 2002 and acquired in September 2006 by Proximus. On 23 August 2010 Belgacom Group announced to end the existence of Euremis as a separate legal entity and fully absorb its activities into Belgacom SA, as of 1 October 2010.

Group structure

In 2007, the Belgacom Group reviewed the entire organisation and created a new operating structure based on 4 pillars:

• The Consumer Business Unit (CBU)
• The Enterprise Business Unit (EBU)
• The Service and Delivery Engine Unit & Wholesale (SDE&W)
• The Staff and Support Unit

Consumer Business Unit (CBU)

The Consumer Business Unit markets voice products and services, internet and television, both on fixed and mobile networks, for residential clients.

Enterprise Business Unit (EBU)

The Enterprise Business Unit meets the ICT needs of professional clients.

Service Delivery Engine & Wholesale (SDE&W)

Service Delivery Engine and Wholesale (SDE&W) groups together the network and IT services. Its wholesale activity offers telecommunications services to other operators and suppliers on the Belgian market.

Staff and Support (S&S)

This unit brings together all the horizontal functions that support the Group’s activities.

Shareholding structure

Situation as of 31 January 2011:^[13]

• Belgian state: 53.51%
• Belgacom NV/SA: 4.89%
• Floating shares on the stock market: 41.59%

Financial data

Financial data in millions of euros:

Year	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013	2014
Total revenue before non-recurring items	5540	5458	6100	6065	5978	5990	6603	6406	6462	6318	6050
Net income	922	959	973	958	800	904	1266	756	712	630	654

GCHQ hack

Material from whistleblower Edward Snowden's leak in 2013 indicated that the British intelligence service GCHQ directed a cyber attack code named Operation Socialist against the computer network of Belgacom^[14] using Regin malware. While Belgacom stated the attack had limited success and no customer data was compromised,^[15] published materials state that GCHQ compromised "both deep into the network and at the edge of the network"^[16] and gained access to Belgacom customers' data streams.

See also

• Belgacom Towers
• European Competitive Telecommunications Association
• John J. Goossens
• Bessel Kok

References

External links

Wikimedia Commons has media related to Belgacom.

• Official website
• Official annual report