Operator has “momentum” after quadrupling its share of market at expense of its rival
O2 is set to overtake Vodafone as the largest UK supplier of mobile connectivity to the public sector following a succession of government contract wins from its network rival.
Speaking exclusively to Mobile News, O2’s business director Ben Dowd (pictured) claims the operator has quadrupled its share of the market, valued at more than £600 million (1.3 million connections), to more than 40 per cent in just three years.
Back in 2012, O2 had targeted a 30 per cent share by this year.
“We only entered the public sector in July 2012 and our progress has been incredible,” said Dowd. “In 2014, we were the fastest growing supplier in government and we will be number one for mobile by the end of this year, no question.”
Dowd said the bulk of its growth has come at the expense of Vodafone, whose share, he claims, has fallen from a commanding 75 per cent (around one million connections) to 40 per cent since 2012. EE’s share has doubled to 20 per cent.
He revealed O2 has now won six of 17 available central government mobile contracts in the past four months.
These include the Crown Prosecution, The Cabinet Office and the Department for Business Innovation and Skills, SE Coast Ambulance, Highways England, Lambeth Council and Leicester City Council – most of which previously were managed by Vodafone. A seventh deal had been signed at the time of writing with an eighth pending. Neither could be discussed due to NDAs.
“Vodafone have always been dominant in the public sector, but we are winning big in this space and have momentum.
“We have built close relationships with the public sector across all levels to understand the issues they face. It’s clear they are looking for efficiency and reform and everything we do is around that agenda.”
Modernising the sector
Dowd credits the operator’s success, in part, to the launch of its £10 per month No. 10 4G SIM and handset package designed exclusively for the public sector a year ago.
He said the tariff has helped to “modernise” the public sector, providing a cost effective way of switching staff from feature phones to smartphones and adopting a more digital strategy – boosting productivity and efficiency as well as cutting costs.
This, he says, has seen widescale adoption of O2’s digital services such as Microsoft Office 365, TuGo, McAfee and Box which have helped drive flexible working. Research shows flexible working can help save the public sector more than £30 billion and increase individual staff productivity by around 127 hours per year.
“There are still many employees in the public sector using feature phones that aren’t even 3G,” said Dowd. “What we are doing is making it easier to embrace new technology. It’s our job to make sure we have the best devices, the best apps and the best support to help them be successful.”
He added: “Around 80 per cent of employees in the UK believe once they leave the office they can’t do all the things they could do if they were still in it, so there’s a challenge and opportunity for us to create that mobile office anywhere and at any time. Some organisations are completely embracing it, but there is still a long way to go.”
Vodafone declined to comment on Dowd’s claims around market share. The operator’s CFO Nick Read (pictured right), speaking to Mobile News following the firm’s Q1 results last month said Vodafone is making progress in the public sector, albeit “slowly”.
“Historically we’ve had a very high share in terms of the mobile business [in the public sector]. We’ve got the capability and been building the sales presence there and we’re starting to slowly move forward. We’ve had some good wins and I would say momentum is building.”
EE CEO Olaf Swantee told Mobile News he was happy with EE’s performance, and like Dowd, suggested many of its wins in B2B as a whole, were at the expense of Vodafone.
“We are winning a lot of accounts on the corporate side of things, as proven with our wins in Q2,” said Swantee. “The public sector is a market where Vodafone clearly has a large installed customer base but that market segment is increasingly interested in alternatives around a good network experience and data connectivity. “
O2’s strategy has also seen its share of UK council mobile contracts rise from 15 per cent in 2013 to 40 per cent today, averaging two local government wins a fortnight this year. Wins are typically from Vodafone and to a lesser extent EE, said Dowd.
O2 has also partnered with Capita to help “mobilise” the UK police forces, allowing officers to connect and access the police crime register using 4G. Details however could not be given due to strict confidentiality agreements.