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O2 to enter UK fixed-line market
15 January 2010
O2, now part of Telefónica, is to start competing with former parent BT in the fixed-line market in the UK
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Comment: Telefónica O2 has been extraordinarily successful in the UK since it split off from former parent BT eight years ago — where it had been called Cellnet. Under its Spanish ownership, it has grown significantly in the UK and now outstrips BT Retail in terms of connections. Now the group is taking on BT in the fixed-line market — a clear move towards converged communications that exposes BT’s lack of a mobile option.
Telefónica O2 is planning to enter the UK fixed-line telecom market. It is planning to include fixed-line calls into packages alongside its broadband and mobile products, and offer discounts to customers who take all three services.
O2 is seeking to offer some of the most competitive pricing in the UK, to compete with fixed-line service providers BT and TalkTalk. Customers that have a mobile account with O2 will be offered a broadband and home phone package, including line rental, for £17 a month.
BT offers an equivalent package for £15.99 a month after an initial promotional period, but does not include the £11.54 monthly line rental fee.
The shift into the fixed-line telecom market was caused by complaints from O2’s broadband customers of poor customer service and hidden costs when taking fixed-line calls from other companies, said Sally Cowdry, O2’s marketing director in the UK.
O2 will launch its fixed-line product in March 2010 and initially market the new service to its existing customers. The company was demerged from former parent BT in November 2001, and was bought by Spanish incumbent Telefónica four years later.
According to the UK regulator Ofcom, Telefónica O2 is now the largest provider of telecoms in the UK. GTB
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