O2 throws down gauntlet for £62bn ICT dominance

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Operator says it will bid for top market share in new markets and announces ‘Joined Up Business’ plan

O2 is “transforming” its business strategy to become the “partner of choice” in the £62 billion information and communication technology market (ICT).

O2 business director Ben Dowd told Mobile News the operator is this week making its first significant steps to remove its perception as an airtime provider, to penetrate new B2B markets.

O2 will announce its new “vision”, called ‘O2 Joined Up Business’, which brings together its portfolio of IT, fixed-line and mobile services.

IT services offered within Joined Up Business will include IT service integration, optimisation, managed services, Cloud-based delivery and consultancy.

O2’s fixed-line service, Joined Up Communications, which launched 18 months ago, and its IT offering O2 Unify, a joint venture with IT provider 2e2 signed in January, will now be absorbed into the new brand.

Moving from mobile
Dowd said: “We are transforming our business to help our customers transform theirs. We started off by offering fixed-line and mobile, but now it’s fixed-line, mobile and IT. We are evolving to become the ICT supplier of choice.

“We will continue to operate in the mobile space because that’s always been the heart of our business, and that’s where we have created our trusted advisor position. But we now have ambitions to move into that ICT space and are undertaking a significant amount of work within our business to do just that.”

A single provider
Dowd claimed that since launching Joined Up Communications and Unify, mobile-only contracts have dropped below 30 per cent, as customers opt to have their communication services managed by a single provider.

Dowd also claimed 65 per cent of UK companies are now looking at ways to converge their communications infrastructure.

He continued: “We announced O2 Unify six months ago, which enhanced our capabilities to address IT and the opportunities around areas like the Cloud and consultancy services. We are now dealing with live propositions and tenders for things like full IT outsourcing. Twelve months ago that wasn’t a conversation we would have dreamed of having.

“It’s an enterprise proposition right now, but we will bring that into SME shortly, particularly around Cloud-based solutions.

“There is a massive opportunity for us. Ultimately we expect to win mobile business as a result of our ICT conversations. Business we simply wouldn’t have been able to get before.”

Dowd claimed O2 is already leading its network rivals in the converged market. He dismissed Vodafone’s One Net proposition as competition, despite the operator making, what he claimed was “a lot of noise”.

He said O2 had yet to come up against One Net or any other operator proposition for any business tender in the IT and telecom space in the past six months.

Dowd said he now views ICT providers BT Global Services, Cable and Wireless and Fujitsu as the main competition for its new strategy. He said more than 50 per cent of all tenders made have been successful.

Managed service deals already confirmed include G4S (Group 4 Securicor), worth “tens of millions”, Civica and Amey.

Dowd said: “We haven’t come up against Vodafone or Orange or any of the others so far. We are up against relatively new competition like BT Global Services. With the managed services we are doing with O2 Unify, we are not seeing that traditional competition.

“Our strategy is one of evolution but also one of relevance which are things we can do now rather than something we might be able to do in a few years’ time. Some of our rivals have offered the panacea and not delivered. That’s why we have gone in stages. O2 Joined Up Business is our next stage and we can deliver.”

Vodafone up for grabs
Vodafone is the market leader for mobile enterprise with a share in and around the “mid 40s” according to Dowd, compared to O2’s “30 per cent”.

But Dowd claimed O2 is now “closing the gap” and is in discussions with a number of Vodafone’s corporate customers, including those at Government-level, about moving their business to O2.

He claimed its ICT propositions are also being well received due to pressures on cost cutting. Dowd said that following an audit on an unnamed company, O2 was able to remove 20 fixed-line numbers, creating immediate savings.

“The public sector is a very exciting market for us because we’ve got it all to gain,” said Dowd.

“The Government departments are all extremely challenged in terms of their cost agenda and are very receptive to what the likes of O2 can do to help them.

“Vodafone is dominant but it’s up for grabs. We have everything to gain, which puts us in a very different mind-set and space from some of our competition.

“Do I think we can close the enterprise gap? Yes. But the denominator is changing.

“We’ve been engaging with the Government on how we can help reduce their costs and become more productive.

“We now have O2 Unify in our arsenal, which makes the conversations a lot more interesting than saving money on their mobile.”

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