Our employees are the source of our success and sustainability

We regard employees as our most important stakeholder group and take care to talk and listen to them through employee dialogue.

The UK business grew and diversified in 2007. To enable us to reinforce our customer services, expand our retail presence and branch out into new broadband services and faster, data-rich mobile phone platforms, our employee numbers rose by 9 per cent over the last two years.

• Telefónica O2 UK had a skilled workforce of 13,0111  employees in 2007 (12,126 in 2006).
• 87 per cent of our people said they were proud to work for the company (Reflect O2 2007 score, based on a 76 per cent response).

During the year we officially opened our fourth customer service centre at Skypark, Glasgow, where employees additionally provide support for our new broadband business and customers who opt for the Apple iPhone.

We boosted the number of O2 people as a direct result of the iPhone launch:  700 new jobs have been added to customer services while another 727 people are being recruited for O2’s retail stores.

In total we have 1,095 more employees than two years ago, due largely to the Glasgow opening, the acquisition of The Link retail stores and the folding of broadband provider Be into our business.

We aim for continuous dialogue with employees: face to face, online, through internal events, intraview video, Employee Forums, and by various other communication methods. These include our bi-annual Reflect O2 survey, which enables us to measure how engaged our employees feel.

We aim to involve everyone directly in our strategies and targets, especially in terms of our customer focus and our relationship with local communities.

Policies

Our approach is to have clear and open employment policies and to apply them consistently and fairly.

We respect the principles of the UN Universal Declaration of Human Rights and the International Labour Organization declarations.

Wherever our employees are based, we ask them to respect and follow our Business Principles. These set out the conduct and standards we expect of our people and those who work with us.

Our policies are designed to treat everyone fairly and impartially, without prejudice, regardless of age, race, gender, religion, national origin, marital status, sexual orientation or disability. We do not tolerate harassment or persecution or use any form of forced or child labour.

Specific workplace initiatives – such as training and development, reward and recognition, health and well being and diversity - are intended to be valued by employees as well as being important to the success of O2.

During the year the Telefónica Europe Executive Committee received six-monthly or yearly reports on all aspects of our employment policies, spanning equal opportunities, gender, human rights,  discrimination and our confidential help facility.

1 People in post, as at 31 December 2007