Mike: Opportunities for Voda and O2

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After 12 months of keeping us guessing, O2 has finally announced it is to enter the UK fixed line market by partnering with BT.

O2 must be applauded for keeping the news of whom it was partnering with under wraps.

Through various comments, O2 business sales director Ben Dowd had led us, if not the entire B2B channel, to believe it would look to acquire rather than partner, although it must be said that Dowd has not dismissed this as a possibility going forward.

Dowd also confesses the network has set itself some “tough” targets, but is happy to stick out its chest, and declare it wouldn’t have entered if it didn’t believe it would achieve them.

And it’s difficult to argue against it doing so. O2 currently, whilst the merger between T-Mobile and Orange is finalised, has the greatest market share of the mobile market. Something it achieved without acquisition. Indeed, Dowd was happy to discuss how O2 currently has more B2B and corporate customers than T-Mobile and Orange combined.

It has also garnered severe brand clout – displaying its name on the shirts of Arsenal FC and the England Rugby team, and opened a string of high street stores; basing and priding its business on providing high class customer service.

Arguably O2 has bragging rights to being top dog in customer service satisfaction in both its B2B and consumer business, if the stream of surveys presented to us are to be believed.

It is this strategy that will be translated across to O2’s new landline division, and with fixed line customers typically allowed to churn in a faster time than mobile, there is plenty of opportunity for O2 to gain share in this fixed line market.

Both O2 and Vodafone have set out their stalls regarding their respective fixed line convergence offerings. The current top two networks in the UK, both partnering with BT, have an opportunity to really establish and cement themselves in the fixed-line market ahead of any expected changes and uncertainty surrounding Orange’s offerings, with T-Mobile currently lacking in this space.

By the time T-Mobile and Orange bring to the market whatever it is they have planned for their merger, the headline statistic of the T-Mobile/Orange combination being almost 10 per cent ahead of its rivals may already become old news, if O2 and Vodafone’s fixed line offerings see them surge ahead.

 

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