1985–2026 · Mobile

Vodafone: from Racal’s car phone network to a global mobile giant

Last reviewed 5 November 2026

Vodafone began as a defence electronics company’s side project, carried Britain’s first commercial mobile calls on 1 January 1985 and the first text message in 1992, then made the largest takeover in history. This is how a Newbury start-up became one of the world’s biggest mobile operators.

Racal’s radio idea

Vodafone grew out of Racal Electronics, a British maker of military radios. In 1980 Racal’s chairman, Ernest Harrison, asked one of his managers, Gerry Whent, to look at civilian uses for the company’s radio technology. Racal teamed up with the Swedish-American company Millicom, and in December 1982 the partnership won the second licence to run a cellular phone network in the UK. The first went to Cellnet, a joint venture of British Telecom and Securicor.

The name was chosen to describe what the network would carry: voice, data and phone, shortened to Vodafone, with “fone” as a deliberate respelling. The company was set up in July 1984 and was based in Newbury, Berkshire, where its headquarters still are.

The first calls

The Racal-Vodafone network opened on 1 January 1985. Early that morning Michael Harrison, the chairman’s son, called his father from Parliament Square in London to the company’s office. Later the same day the comedian Ernie Wise, dressed in Victorian costume, made a publicity call from St Katharine Docks in London, becoming the first person outside the company to make a call on a British mobile network. The phone he used was the size of a briefcase and weighed about 5 kg.

Early mobiles were car phones or heavy portables used mainly by businesses, and calls were expensive. The network still grew quickly. Vodafone’s analogue network was followed by a digital GSM network in 1991, and on 3 December 1992 a Sema Group engineer, Neil Papworth, sent “Merry Christmas” from a computer to the Vodafone phone of a director, Richard Jarvis. It is generally recognised as the first SMS text message.

Independence and a buying spree

In 1988 Racal floated part of its telecoms business on the stock market, and on 16 September 1991 it demerged it completely as Vodafone Group plc, with Gerry Whent as chief executive. Under his successor, Chris Gent, Vodafone set out to become a global operator.

In 1999 it bought AirTouch Communications, a US mobile operator, and renamed itself Vodafone AirTouch. Later that year it agreed to combine its US wireless assets with those of Bell Atlantic, creating Verizon Wireless, in which Vodafone held 45%.

Then came Mannesmann, the German engineering and telecoms group. Vodafone’s unsolicited bid in November 1999 was rejected, and a bitter takeover battle followed. On 3 February 2000 Mannesmann’s board accepted an increased offer worth about £112 billion. It was the largest corporate takeover in history at the time, and it gave Vodafone control of major networks across Europe.

Hangovers and new directions

The deals were followed by huge write-downs as the dot-com and telecoms boom ended. Some expansions did not work out. Vodafone bought into J-Phone in Japan in 2001, but in 2006 it sold Vodafone Japan to SoftBank for £8.9 billion, and it became SoftBank Mobile.

Other bets paid off in unexpected ways. In 2007 Safaricom, Vodafone’s partner in Kenya, launched M-Pesa, which let people send money by text message from basic phones. It spread rapidly in a country where few people had bank accounts and became one of the best-known examples of mobile technology changing everyday life in Africa.

In September 2013 Vodafone agreed to sell its 45% stake in Verizon Wireless to Verizon for US$130 billion, one of the biggest deals ever, and used part of the money to upgrade its European networks.

Vodafone today

Vodafone has since narrowed its focus. Its Indian business merged with Idea Cellular in 2018 to form Vodafone Idea. In the UK, Vodafone and Three agreed in 2023 to merge their networks. The deal was approved by the competition regulator in December 2024 and created VodafoneThree, Britain’s largest mobile operator, with about 27 million customers. In May 2026 Vodafone paid CK Hutchison £4.3 billion to take full ownership of the combined company.

As of 2026 Vodafone runs networks in 17 countries and has partner networks in more than 40 others. Margherita Della Valle is chief executive.

Why Vodafone’s story matters

Vodafone’s history follows the whole arc of the mobile industry: from expensive car phones for executives to text messaging, global networks built by takeover, mobile money and today’s consolidation into fewer, larger operators.

It also shows how much of that change was driven by competition. The UK government gave out two licences in 1982 so that Cellnet would have a rival. The start-up that won the second became, within two decades, larger than the national telephone company it was set up to compete with.