VIAG Interkom

» see viag-interkom.de as it lived, on the wayback machine

~ the obituary ~

VIAG was a Munich industrial holding company with roots in 1920s Berlin, and in 1995 it went into telecommunications with British Telecom as its partner. RWE was in the venture until the autumn of 1996. The joint company already owned a fiber network of nearly 4,000 kilometers across Bavaria and Thuringia, which at that point counted as one of the largest private networks in the country, and it sold data lines to businesses at speeds between 64 kbit/s and 2 Mbit/s.

Mobile came next. On 4 February 1997 the group's E2 Mobilfunk venture won the license for the second half of Germany's E network, and on 1 April the three subsidiaries involved were merged into VIAG Interkom GmbH & Co. The network itself went live on 1 October 1998 in eight metropolitan areas, which made VIAG Interkom the fourth German mobile operator. T-D1 and D2 Mannesmann had been carrying customers for six years by then, E-Plus for five.

Being fourth meant being late to coverage, and the first fix for that was borrowed. The ending came from somewhere else entirely. British Telecom bought out its partners after the UMTS auction and spun its mobile arm off as mmO2, which wanted a single brand over all of it. On 1 May 2002 the mobile business stopped being VIAG Interkom and became O2.

~ the case file ~

~ the swiss detour ~

At launch the network reached about forty-five percent of the German population, all of it in cities, which is not a product you can sell to somebody who drives. In July 1998 the company signed a roaming agreement with Swisscom, and the arrangement was strange enough to be worth describing properly: a VIAG Interkom customer outside the covered areas was roaming as a Swisscom subscriber onto the rival German networks, which meant using the competition's radio towers without holding any contract with the competition. It needed a dual-band handset, because the borrowed coverage was on the D networks, and a Swiss identity on the SIM.

The competitors sued. By November 1998 the European Commission had opened an examination of its own. Rather than wait for a ruling, VIAG Interkom negotiated directly with T-Mobile, and by March 1999 the E2 build had reached fifty-five percent coverage with national roaming onto D1 for everywhere else.

~ homezone ~

From 1999 the company sold Genion, which gave a mobile phone a fixed-line number and fixed-line pricing inside a defined home area. In a market where calling a mobile cost noticeably more than calling a landline, that was a real product rather than a marketing exercise, and it was the one thing the fourth network had that the other three did not. The tariff survived the rebrand and was still being sold under the O2 name in April 2009.

The homezone idea reads oddly now, when a phone number has no location at all and nobody prices a call by where you are standing. It was a neat answer to a pricing structure that no longer exists.

~ what the parents did ~

The German UMTS auction in 2000 drained everybody who won, and the shareholders began rearranging themselves immediately afterward. British Telecom took full ownership during the first half of 2001. E.ON, which by then had absorbed VIAG, was paid 11.4 billion euros for its 45 percent. The mobile half went into the subsidiary that is Telefónica Deutschland today and the fixed-line half became BT Germany, so the two sides of the company ended up with different owners.

One detail from the rename is a reminder of how crowded the brand space was. Vodafone, then still widely known in Germany as D2, objected that O2 sat too close to its own company name, and the two groups had to settle it between them before the letters could go up.

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