In 1985, the Manx Government announced that it would award a 20-year licence to operate the telephone system in a tender process. As part of this process, in 1986 British Telecom created a Manx-registered subsidiary company, Manx Telecom, to bid for the tender. It was believed that a local identity and management would be more politically acceptable in the tendering process as they competed with Cable & Wireless to win the licence.
Manx Telecom won the tender, and commenced operations under the new identity from 1 January 1987.
On 17 November 2001, Manx Telecom became part of mmO2 following the demerger of BT Wireless's operations from BT Group. It was acquired by Telefónica in 2006 (2006).
On 4 June 2010 Manx Telecom was sold to UK private equity investor HgCapital (who were buying the majority stake), alongside telecoms management company CPS Partners. HG Capital indicated that the enterprise value of the deal was 158.8 million pounds ($232.5 million).
Manx Telecom headquarters in the Isle of Man Business Park, Douglas
Manx Telecom includes two divisions: a mobile division; and a fixed line assets which constituted the first landline operations of Telefónica O2. To that end, Manx Telecom has since invested over £50 million in telecommunications infrastructure on the island, and is committed to a further £30 million investment over the next three years.
The cell-phone network operated by Manx Telecom had been used by O2 as an environment for developing and testing new products and services prior to wider rollout. In December 2001, the company became the first telecommunications operator in Europe to launch a live 3G network. In November 2005, the company became the first in Europe to offer its customers an HSDPA (3.5G) service.