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History of Vodafone

Vodafone was founded by Racal Electronics Ltd., a U.K. electronics firm, and Millicom, a U.S. communications company. Developed as a joint venture during the early 1980s, Vodafone was granted a license to develop a cellular network in the United Kingdom in January 1985. The new subsidiary’s success was stunning. The corporate sector was quick to appreciate the advantages of mobile telecommunications, and individuals were equally quick to spot the status symbol.

Vodafone found itself one of only two entrants in the United Kingdom in a virtually unregulated new industry; the other member of the duopoly was Cellnet, which remained Vodafone’s principal competitor into the 1990s. Throughout the 1980s the company created much of the technology of this rapidly expanding field. Racal Telecommunications’ profit and loss history from 1985 to 1989 succinctly describes the matter: in the year of its creation, Vodafone was operating at a loss of £10 million; by the end of the decade pretax profits were over £84 million.

By 1988 Racal Telecommunications Group Ltd. – Vodafone and the related subsidiaries were officially known – was by far the most successful player on the Racal Electronics team. The parent company lobbied for a complete sell off of the Racal holdings as they thought the name was hindering the stock value and growth. Three years later Racal Telecom was separated from its parent company in 1991, at which time the name was changed to Vodafone Group Ltd.

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