Value and affordability key to O2’s continued growth

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O2 results reveal highest number of customer additions during Q1 for four years

Value and affordability have been central to O2’s sustained growth over the past 18 months, according to the operator’s UK CEO, Ronan Dunne.

Dunne (pictured) was speaking to Mobile News after O2 published its first-quarter financial results, which showed a 13 per cent yearly rise in contract additions, to 251,000 – the most for four years in Q1.

He said he believes O2 is still the most “attractive” brand in the market, but admitted it was not seen as the most affordable by everyone.

Dunne added that in the past 18 months, O2 has taken action to change this perception by launching a number of added-value “membership” services, as well as digital services designed to improve customers’ everyday lives.

These include updates to O2 Priority Moments, which Dunne claims has so far saved customers “tens of millions” of pounds since launching last July, the launch of VoIP service Tu Go, O2 Tracks, O2 Health, O2 Train Travel and the extension of its free Wi-Fi services.

The firm has also added new offerings for customers such as On&On and Pay & Go Go Go to provide additional contract-style benefits.

Nevertheless, the operator’s prepay figures for the quarter declined by just under 205,000.

Dunne said: “One of the things we acknowledged 18 months ago was that people’s attitudes towards O2 hadn’t changed, in that we still had the highest brand attractiveness but perhaps we weren’t seen to be as affordable as others.

“We’ve tried to ensure that with On&On and Pay & Go Go Go in contract and prepay respectively, as well as with the launch of O2 Tracks and O2 Train Travel, people now have a better view on the value of membership they receive from us.

“That’s why more people are turning to us and staying with us because they feel we are their trusted partner where they will benefit from the most exciting digital experiences.”

Leading the way
Dunne said one of the major drivers for O2 in coming months will be its most recent tariff offering, O2 Refresh.

Described by Dunne as “game changing”, the 24-month tariff was launched last month (April 12) and is designed to enable customers to upgrade their device at any time during the contract.

Customers are able to separate their airtime agreement from the handset cost and, as a result, replace the device whenever they want after paying off any balance remaining on the original handset.

The airtime side of the deal costs either £12 a month for 600 minutes, unlimited texts and 750MB of data; £17 a month for unlimited minutes, texts and 1GB of data; or £22 a month for unlimited minutes, texts and 2GB of data.

According to O2, 90 per cent of customers eligible for O2 Refresh have chosen to take up the tariff, with that figure rising to 95 per cent for Apple iPhone customers.

Dunne said: “O2 Refresh is a game changer. It gives customers the complete transparency between what they are paying for the service – which they are discovering is incredibly good value – versus what the cost of hardware is. It’s a step in the right direction.

“I’ve seen quite a few comments that have also said Refresh is a game changer and focuses on customers in a way other operators should be looking at. We’d be very happy to lead the way and for others to follow.”

Full article in Mobile News issue 539 (May 20, 2013).

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