Compliance

Working within the law, voluntary standards and guidelines

Compliance is vital to the integrity of our business, the reputation of our brand, our legal position and financial sustainability.

The Board is responsible for compliance across the O2 Group and for ensuring that all operating companies meet local legal and regulatory requirements. Members must also confirm compliance with our Business Principles every six months as part of the Corporate Governance Certification process.

Our operating businesses in the UK, Germany, and the Isle of Man each have compliance officers who monitor training and investigate failures.

Competition law gives authorities and local regulators the power to stop unfair trading, and the right to impose fines of up to 10 per cent of our turnover. Failure to comply could leave O2 exposed to claims for damages from third parties.

The relevant government watchdogs are listed here:

UK

• The Office of Communications (Ofcom) – the regulation and competition authority for the UK communications industry.
• The Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) – the regulatory body for the UK’s premium-rate telecommunications industry.
• Information Commissioner’s Office (ICO) – the independent authority set up to promote access to official information and to protect personal information.

 

Germany

• Bundesnetzagentur (BNetzA) – the statutory body responsible for regulating the telecommunications sector.
• Bundeskartellamt (BKartA) – the statutory body responsible for safeguarding competition.
• Bundesdatenschutzbeauftragter (BDSI) – The independent authority set up as watchdog for data protection issues.

 

Ireland

• The Commission for Communications Regulation (ComReg) and to RegTEL – the body that regulates the premium-rate industry.
• The Data Protection Commissioner (DPC).

 

The Czech Republic

• The Czech Telecommunications Office (CTU) regulates the electronic communications sector.
• The Czech Office for the Protection of Competition (UOHS) is the central state authority that oversees compliance to fair-competition rules.
• The Council for Radio and TV broadcasting regulates radio and television broadcasting.

In 2006 in the UK:

• There were no major competition law failures.
• No complaints were upheld by Ofcom about unfair consumer terms.
• ICSTIS upheld one complaint.
• The ICO brought 11 adverse assessments against our operations in the UK concerning failure to comply with the Data Protection Act.

The Czech Competition authority fined Telefónica O2 Czech Republic CZK 205 million at the end of 2005, for abusing its dominant position by offering discounted voice tariffs for its fixed line retail customers. The case relates to an alleged incident that happened before this business was acquired by Telefónica, Telefónica O2 Czech Republic paid the fine but appealed against the decision. The appeal was rejected by the Regional Court on 26 September 2006. Telefónica O2 Czech Republic renewed its appeal, which is now being reviewed by the High Court of the Czech Republic.

Our business seeks to comply with voluntary advertising standards and guidelines. We seek to withdraw any advertising that is found misleading or inaccurate. In 2006 advertising standards authorities brought one complaint in the UK, one in Ireland and two in Germany. 

We investigate every regulatory complaint in accordance with our compliance procedures, which are endorsed by the Telefónica O2 Europe Board.

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Quality standards

We are proud of our compliance with tough international standards, which help ensure that our product quality, health and safety procedures, and environmental management are of a high standard. We believe this helps us in our drive for continuous improvement and to deliver our customer promise.

ISO 9001:2000
Telefónica O2 Europe has implemented a comprehensive quality management system and has achieved corporate accreditation to the international quality standard ISO 9001:2000.¹

ISO 14001:2004
Across Europe, O2 has Group-wide accreditation to the international environmental management system ISO 14001:2004.²

OHSAS 18001:1999
O2 UK and Telefónica O2 Czech Republic’s mobile operations have a health and safety management system certified to OHSAS 18001:1999.

Security management

Telefónica O2 Czech Republic has registration to ISO 27001/IEC:2005 for its security management system.

Manx Telecom’s ‘Information Security Management System’ is approved to BS27799:Part2:2002.

ISO/IEC 20000-1:2005
Airwave has achieved registration to ISO/IEC 20000-1:2005 for the IT Service Management system.

¹ Excluding Telefónica Deutschland.
² Excluding O2 Ireland retail operations and Telefónica Deutschland.

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Excellence standards

• O2 UK and Manx Telecom are registered to the Investors in Excellence standard.
• O2 UK won the Best Investor in Excellence award at the London Excellence Awards in 2006.
• O2 Germany reached the first level ('Committed to Excellence') of the 'Levels of Excellence' recognition programme run by the European Foundation of Quality Management (EFQM).
• Telefónica O2 Czech Republic achieved 5-star Recognition for Excellence.

We also comply with various quality and compliance standards set by regulators, such as the British Approvals Board for Telecommunications (BABT) in the UK and on the Isle of Man.

During the year we began an extensive programme to prepare us for the US financial reporting regulations under Sarbanes Oxley (SOX), setting up a business-wide team of dedicated SOX managers. Our internal Control Policy meets the requirements of COSO II.

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