O2 (UK)
Telecommunications | |
Founded | 1985 | (as Cellnet)
---|---|
Founder | John Carrington |
Headquarters | Reading, England, UK |
Area served | United Kingdom |
Key people | Lutz Schüler (CEO) |
Revenue | £6.510 billion (2017)[2] |
Owner | Virgin Media O2 |
Subsidiaries |
|
Website | o2 |
Telefonica UK Limited,
History
Overview
The company was formed on 7 January 1985[5] as Cellnet, a 60:40 joint venture between BT Group and Securicor. Cellnet was one of the first two mobile networks in the UK, alongside Vodafone. In 1999, BT acquired Securicor's share of Cellnet and the company was later rebranded as BT Cellnet.[6] In June 2000, BT Cellnet launched the world's first commercial General Packet Radio Service (GPRS) service.[7] The company, together with BT Group's mobile telecommunications businesses in Germany, Ireland and the Netherlands, was part of the BT Wireless division. This was spun off from the BT Group in 2002 to form a new holding company, mmO2 plc, which introduced the new "O2" brand for the businesses. In 2005, mmO2 plc was renamed O2 plc.[8]
O₂ plc was purchased by the Spanish telecommunications company Telefónica in 2006 for £18 billion. Under the terms of the acquisition, Telefónica agreed to retain the "O₂" brand and the company's UK headquarters.[9] O2 plc was renamed Telefónica O₂ Europe in 2007 and then Telefónica Europe plc in 2008,[10] and became the holding company for Telefónica's operations in the UK.[11]
In May 2020, Telefónica reached an agreement with Liberty Global to merge the company with Virgin Media. On 1 June 2021, O2 and Virgin Media formally merged to create Virgin Media O2 as a joint venture between Telefónica and Liberty Global.[12][13] and structured as a joint venture between Telefónica and Liberty Global.[14]
1985 to 2005
Between 1985 and 1989, John Carrington was the CEO of British Telecom's Mobile Division and the Chairman of Cellnet. It was during this period that Carrington launched Cellnet's first cellular service, following innovative development work by BT Spectrum, who built a chain of cells between London Heathrow and BT Tower in January 1985.[15]
Cellnet was established in 1985 as a joint subsidiary of BTCR, British Telecom Cellular Radio, providing the engineering knowledge, and TSCR, Telecom Securicor Cellular Radio Limited, providing the financial investment, resulting in a 60:40 joint venture between British Telecommunications and Securicor.
The equipment used was primarily a Motorola system designed for the American Advanced Mobile Phone System (AMPS) and had to be adapted for the British system, Total Access Communication (TACS). The system was so unready that the initials that Motorola used to designate the network exchanges, EMX, became popularly known as 'European Motorola Experiment' and the exchanges had to be programmed in machine code loaded by tape. In the early days of the system, mobile calls cost £1 per minute.[16]
After months of rumours and speculation, Peter Bonfield publicly announced on 27 July 1999 that BT had agreed to buy Securicor's 40 per cent share of Cellnet for £3.15 billion. Cellnet had five million customers at the time of its acquisition.[16] The company was rebranded as BT Cellnet in 2000, and it became a part of BT Wireless, a group of companies owned by BT.
BT announced on 3 September 2001 that the BT Wireless business would be spun off from the main group as a newly listed holding company, mmO2 plc, operating under the "O2" brand.[17] Shareholders approved the plan at an extraordinary general meeting on 23 October 2001.[18] BT Cellnet relaunched as "O2" on 18 June 2002, along with other former BT subsidiaries: Esat Digifone in Ireland, Viag Interkom in Germany and Telfort Mobiel in the Netherlands.
The rebranding was supported by a European advertising campaign, which began on 16 April 2002, across all four countries, at a cost of £130 million. The main launch campaign ran from 18 June and was developed by Vallance Carruthers Coleman Priest, working alongside brand consultancy
In March 2005, mmO2 restructured its shares and the company was relisted as O2 plc.[8]
Telefónica acquisition
On 30 November 2005, O2 agreed to a takeover by Telefónica, a Spanish telecommunications company, for £17.7 billion (£2 per share) in cash. It went through finally in 2006.[20] According to the merger announcement, O2 retained its name and continued to be based in the United Kingdom, keeping both the brand and the management team. The merger became unconditional on 23 January 2006.
Following the acquisition of O2, Telefónica undertook a corporate organisational change that saw the merging of its fixed and mobile businesses in Spain, and the transfer of Telefónica's non-Spanish European telecommunications properties into the O2 brand. Thus, the
Since 2007
On 15 July 2009, O2 entered the
O2 and
Sale attempts
On 24 November 2014, it was reported that BT were in talks to buy back O2, while at the same time BT confirmed that it was also in talks to buy EE.[23] BT subsequently entered into exclusive talks with EE.[24]
On 23 January 2015,
The deal was subject to regulatory approval.[27] The European Commission decided in December 2015 not to refer Hutchison's takeover of Telefónica's O2 business in the UK to the country's Competition and Markets Authority,[28] which had asked to be allowed to investigate the planned acquisition, arguing that as the British competition regulator, it – and not the Commission – should have the right to rule on the transaction, which it argued 'threatens to affect significantly competition in the UK retail mobile and wholesale mobile markets', claiming that its investigation of the takeover would 'avoid duplication and fragmentation'.[29] On 11 May 2016, the European Commission officially blocked the tie-up of O2 and Three, arguing that the merger would reduce consumer choice and lead to a higher cost of services.[30]
In September 2016, Telefónica appointed a number of investment banks to sell the business to investors, ahead of a stock market flotation.[31]
Merger with Virgin Media
On 7 May 2020, it was announced that Telefónica had agreed to merge Telefonica UK with Liberty Global subsidiary Virgin Media, subject to approval, into a 50/50 joint venture. Subject to approval, the merger was slated for the middle of 2021.[32][33] The merger was completed on 1 June 2021 with the newly merged company positioning itself as competition with BT.[34]
Outages
In July 2012, O2 had to apologise to almost 8 million customers after a network switching subsystem failure led to a 24-hour blackout of the service across the UK and Ireland.[35] The problem, which prevented a third of its customers' phones registering on the network, also affected customers of MVNO networks Tesco Mobile and Giffgaff.[36] To apologise for this, O2 announced that it would be giving hundreds of thousands of its customers compensation for the issue.[37] Pay monthly customers received a 10 per cent discount on their bill whereas Pay As You Go users received a 10 per cent refund on their first top up in September.
On 6 December 2018, a major disruption to the O2 network, caused by faulty software, left up to 32 million users (including those on MVNOs) without access to data services (on both 3G and 4G) for up to 24 hours. During the outage, some voice and text services suffered from congestion.[38]
Network
BT Cellnet launched the world's first
O2 publicly announced on 15 December 2009 that it had successfully demonstrated a
In January 2012, the company announced plans to provide free internet to millions of residents and visitors in central London, by launching Europe's largest free Wi-Fi zone, along with free Wi-Fi access for anyone on any network in and around every O2 retail store.[42]
On 20 February 2013, Ofcom announced that O2 had been awarded spectrum in the 800 MHz band for 4G LTE coverage, bidding around £550 million for the spectrum.[43] This spectrum came with a coverage obligation from Ofcom, and O2 is obliged to provide a mobile broadband service for indoor reception to at least 98 per cent of the UK population (expected to cover at least 99 per cent when outdoors) and at least 95 per cent of the population of each of the UK nations – England, Northern Ireland, Scotland and Wales – by the end of 2017 at the latest.[44] The 4G LTE service became available to customers in London, Leeds and Bradford on 29 August 2013, and expanded to a further ten cities by the end of the year.[45]
On 27 March 2017, following the release of
Frequency | Band | Protocol | Class |
---|---|---|---|
900 MHz | EDGE |
2G | |
900 MHz | 8 | UMTS/HSDPA/HSPA+/DC-HSPA+ | 3G |
2,100 MHz | 1 | UMTS/HSDPA/HSPA+/DC-HSPA+ | 3G |
700 MHz | 28 | LTE/LTE Advanced | 4G/4G+ |
800 MHz | 20 | LTE/LTE Advanced | 4G/4G+ |
900 MHz | 8 | LTE/LTE Advanced | 4G/4G+ |
1,800 MHz | 3 | LTE/LTE Advanced | 4G/4G+ |
2,100 MHz | 1 | LTE/LTE Advanced | 4G/4G+ |
2,300 MHz | 40 | TD-LTE |
4G/4G+ |
2,600 MHz | 38 | TD-LTE
|
4G/4G+ |
700 MHz | n28 | 5G NR | 5G |
900 MHz | n8 | 5G NR | 5G |
2,100 MHz | n1 | 5G NR | 5G |
3,500 MHz | n78 | 5G NR | 5G |
Former operations
Fixed line and broadband
Alongside mobile telephone services, the company also provided fixed line services and home broadband.
O2 purchased Be Un Limited, an internet service provider in the UK, for £50 million in June 2006.[49] O2 retained the Be brand, and launched a separate O2-branded broadband service on 15 October 2007, using the Be network.
O2 announced in June 2011 a fibre optic broadband service designed to compete with the
Payment system
O2 began trialling a
On 23 February 2011, O2 announced it would launch a "second phase" for O2 Money, by discontinuing its branded
It was announced on 9 January 2014 that the O2 wallet service would close on 31 March 2014.
Marketing
Branding
The BT Cellnet consumer
O2 adopted the slogan "See what you can do" in 2002 after the company's demerger from BT. In April 2008, the slogan changed to "We’re better, connected".[58] In July 2013 the slogan changed to "Be more dog",[59] followed by "More for you"[60] in June 2016 and "Breathe it all in" in September 2018. After the merger of Virgin Media and O2's parent companies, older variations of the slogans returned, now being shared with Virgin Media. The 2008 slogan "We’re better, connected" returned in November 2021, and March 2023 saw the return of O2's original slogan "See what you can do". All of O2's marketing campaigns to date have been created by London advertising agency VCCP.[citation needed]
Sponsorships
O2 currently sponsor the
Additionally, Telefónica O2 had a long-standing relationship with Arsenal F.C., being their shirt sponsor until the end of the 2005/2006 season. In 2005, a three-year deal was signed that saw Telefónica O2 become the team's exclusive mobile communications partner.
O2 were the main sponsor of the
O2 sponsored music festivals, the Wireless Festivals, from their inception in 2005 until 2008.[citation needed]
Naming rights
O2 is the sponsor of The O2 in London. Since its launch in 2007 the Millennium Dome has been transformed and rebranded by O2 into an entertainment venue.
The O2 Arena was the site of the artistic gymnastics events and medal rounds in basketball for the 2012 Summer Olympics.
In February 2017, in a continuation of its agreement with AEG, the developers of the site, O2 announced that it had renewed its naming rights for a further ten years.
Academy Music Group venues
Since 2008, O2 is partnered with
Academy Music Group venues:
- O2 Academy Birmingham
- O2 Academy Bournemouth
- O2 Academy Bristol
- O2 Academy Brixton
- O2 Academy Edinburgh
- O2 Academy Glasgow
- O2 Academy Islington
- O2 Academy Leeds
- O2 Academy Leicester
- O2 Academy Liverpool
- O2 Academy Oxford
- O2 Academy Sheffield
- O2 City Hall Newcastle
- O2 Forum Kentish Town
- O2 Institute Birmingham
- O2 Ritz Manchester
- O2 Shepherds Bush Empire
- O2 Victoria Warehouse Manchester
O2 also has name licensing agreements with O2 Guildhall Southampton and O2 Apollo Manchester.
Environmental record
In February 2009, O2 became the first mobile telecommunications provider to be certified with the
O2 is a voluntary participant in the
Controversy
In July 2016 Cyber Security company Insinia raised fears that customer data from an O2 cyber breach was being sold on the dark web. O2 denied this was true telling the BBC: "We have not suffered a data breach. Credential stuffing is a challenge for businesses and can result in many company's customer data being sold on the dark net".[67]
In October 2017, an inquiry was launched in the UK concerning overcharging customers for handset sales integrated with the data and call charges. Responding to questions, O2's CEO indicated that the company's billing allows for separation of handset charges and telephony/data charges. He added that "if we can do it, they can do it too" in reference to Vodafone and EE, O2's biggest competitors and the UK's top three mobile-telecoms companies.[citation needed]
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