Overview of our business: O2 in profile

The O2 Group was acquired for £17.7 billion by the Spanish-based telecommunications group Telefónica S.A., in January 2006.

In terms of active subscribers, the combination of Telefónica and O2 created the second largest global wireless operator outside China.

O2 remains a free-standing division of Telefónica and is the focus of this, our fourth annual Corporate Responsibility report.

O2 UK

O2 UK has over 16 million customers and leads the market in terms of customer satisfaction and by SMS (short-message service) text-messaging volumes, which grew 31 per cent year-on-year.*
We opened a fourth call centre in Glasgow and began to employ 1,500 new customer service centre employees and 500 new employees for our retail stores.
The O2 Treats loyalty initiative helped to drive a continued reduction in the percentage of customers switching to other networks ('churn').
O2 UK launched the i-mode® mobile internet service in October 2005.
Our joint venture with Tesco Mobile has over one million customers.
In 2006 O2 UK was rated the 26th best company to work for in the UK.
O2 UK was voted Network of the Year, Operator of the Year (2005) and Best Large Retailer of the Year (2006).

O2 Germany

Since its launch in 2002, O2 Germany has become Germany's fastest-growing mobile operator, rated first for customer service.
We gained 27 per cent more customers year-on-year and more than half our business is post-pay contract.*
Our Genion tariff - the leading alternative to fixed-line services in the German market - includes a new flat-rate option and has 3.7 million customers.**
A joint venture with Tchibo Mobile has nearly 660,000 customers.**
O2 Germany is included in the list of ten best companies to work for in Europe.

O2 Ireland

O2 Ireland has a 37 per cent share of the Irish mobile market, which is served by four key players.
Service revenues grew 6.9 per cent and our customer base by 3.9 per cent year-on-year.*
Text-messaging volumes increased by 4.1 per cent.*
We became the first operator in Ireland to abolish roaming charges between Northern Ireland and the Republic of Ireland for all of our customers and introduced new price plans for post-pay customers.
We launched Ireland's first mobile internet service, i-mode®, in October 2005.
In March 2006, O2 was voted Best Company to Work for in Ireland and is among the ten best companies to work for in Europe.

O2 Airwave

O2 Airwave is the secure digital radio network for emergency services and public safety agencies across England, Scotland and Wales.
The network, under a £2.9 billion contract with the Home Office, signed in 2000, was completed on time and to budget in 2005. It provides a secure service to all police forces across Britain.
We won major new contracts to roll out services to the Ambulance Trusts and the Fire and Rescue services in England, bringing all three major 'blue-light' services into the O2 Airwave network.
Over 200 public-safety organisations, including the British Transport Police and the Ministry of Defence use the network.

Manx Telecom

Manx Telecom is licensed by the Isle of Man Government to run fixed, mobile and internet services.
As an independent internet service provider as well, Manx Telecom has a portfolio of internet access, hosting products and services and we support the Government's 'e-island' strategy.
Manx Telecom was the first company in Europe to launch 3G services and the commercial super-speed 3.5G (HSDPA) mobile internet services.
Our Connect Mann network for the Government won the Cisco award for Best Corporate Internet Protocol Network for Europe, the Middle East and Africa.

Telefónica O2 Czech Republic and Telefónica Deutschland

Our acquisition by Telefónica brings its merged businesses in the Czech Republic - Cesky Telecom (fixed line) and Eurotel (mobile); and Telefónica Deutschland (broadband) - within O2's operations.
Telefónica O2 Czech Republic offers voice and data services to over 3.4 million fixed line and 4.7 million mobile customers.
The majority of Telefónica Deutschland's operations will be integrated into O2 Germany's operations.
As new O2 operations, these will not be included in our 2005/06 Corporate Responsibility report, but will be included in subsequent reports.

* For quarter ended 31 March, 2006.

** As at 31 March, 2006.