Press release

O2 enters fixed line with the launch of 'Joined Up' its full communications service to small and large business

New research from O2 reveals that, despite experiencing the biggest economic recession since the Second World War, almost half of businesses in the UK are failing to review costs for essential suppliers and keep margins low.  47 per cent of UK businesses admit to not having reviewed or switched their essential suppliers within the past two years - or even longer; this includes 15 per cent who have never reviewed expenditure on essential business services such as technology, telecoms and utilities.

The research, developed in conjunction with Professor Christopher Bones at Henley Business School, was commissioned as O2 announces its move to offer a wide range of fixed line services to business customers.  The findings further demonstrated that businesses still view complexity as a major barrier to switching (18 per cent) and a further 22 per cent fail to see the link between saving on suppliers and bottom line business impact

Professor Chris Bones, Dean, Henley Business School comments: "If UK businesses fail to rein in their costs and keep margins low during this crucial economic time, they are wasting money that could be better spent on jobs, research and development and expanding into new markets."

"Other than reducing head count, essential supplier costs are quite literally the most obvious place to look to slash costs and ensure the business is operating as cost-efficiently as possible.  Small business, which is the lifeblood of economic recovery, is particularly losing out and if this isn’t addressed, money that should be spent on the innovation that will ultimately lead us out of recession is being wasted."

Of the 50 per cent of business who have managed to review and switch suppliers in the past 12 months, 76 per cent made a saving by doing so.  The average amount saved by businesses is just over £10,000.  These findings also reveal that the average business spends £78,300 on essential suppliers annually.  This means that in total, UK PLC could stand to save a staggering £1.2 billion by conducting a simple review of essential services to ensure that they are on the best deal.

To help customers address these issues, O2 launching its new 'Joined Up' communications service. The new services will provide businesses with one single converged solution for their telecoms requirements spanning mobile, fixed line, data, broadband communications, equipment and professional consultancy.  It gives businesses of all sizes an opportunity to outsource their telecoms, ICT and consultancy needs to just one provider, reducing the amount of time spent handling and managing systems and communications services, which are not core to their business.

Ben Dowd, Business Sales Director for O2 in the UK, said: "Businesses are often dealing with a hugely complex network of suppliers but are motivated to simplify and streamline their bought-in costs. By moving into the fixed line market we are now able to provide our business customers with a genuine end-to-end service which incorporates landline, broadband and hi-speed data as well as the mobile and consultancy services we already offer."

"This development is in direct response to what our customers have told us they need. We have signed a new agreement with BT Wholesale to provide the O2 branded fixed line element for our new communications service. This is an exciting time for us at O2 and now we can truly join up our customers' communications and IT needs."

ENDS

Contacts

Ken Leitch
PR Manager
O2
ken.leitch@o2.com
(0) 7734 606319

Helen Searle
Blue Rubicon
O2@bluerubicon.com
020 7260 2700

Katie Gosden
Blue Rubicon
Katie.gosden@bluerubicon.com
020 7260 2700

All O2 news releases can be accessed at our website: www.o2.com

Notes to Editors

About the research

The research was conducted independently by Populus among a representative panel of 100 business owners and board level executives between 2nd and 6th September 2009.  The results adhere to Populus’ rigorous criteria for valid research methodology and as such were carried out completely independently of O2.  Additional analysis was conducted by the Henley Business School.  Populus is a member of the British Polling Council and abides by its rules. For more information go to www.populus.co.uk.
 
How was the potential savings figure of £1.2 billion calculated?

• Our research shows that 76 per cent of businesses who have reviewed and switched suppliers have made a saving, the average saving being 13%
• Our research also showed that 38% of businesses were reluctant to change suppliers even if there were savings to be made
• Of the businesses surveyed 55% told us what they spent on essential bought-in services and this averaged out at £78,300
• If we accept £78,300 as a representative figure and multiply it by the 2.16 million business in the UK [ONS 2008 data]  then we estimate that businesses in the UK spend about £9.4bn on these services annually
• If every business in the UK achieved the 13% saving in this area then UK plc would save c£1.2bn
• On the figures above we have there is still about £0.5bn of unrealised savings (representing the 38% unwilling to act so far) that could be freed up to invest in taking us out of recession

About O2

• Telefónica O2 UK Limited is a leading communications company for consumers and businesses in the UK, with 20.7 million mobile customers and 457,000 fixed broadband customers as at 30 June 2009. 
• Telefónica O2 UK Limited is part of Telefónica Europe plc which is a business division of Telefónica S.A. and which owns O2 in the UK, Ireland, Slovakia, Germany and the Czech Republic, and has 46 million customers.
• In 2006 Telefónica Europe acquired Be*, the UK fixed broadband provider, and in October 2007 O2 launched its broadband service using the Be* network.
• O2 is the naming rights partner of The O2, the world-class entertainment venue.
• O2 was ranked highest in customer satisfaction for both UK mobile and fixed broadband customers according to the J.D. Power and Associates UK Mobile and Fixed Broadband Studies 2009..
• In February 2009 O2 became the first UK mobile operator to be officially certified with the Carbon Trust Standard in recognition of O2’s commitment to reduce its carbon footprint and the 15% reduction in energy consumption achieved over the past three years.
• O2 was launched on 1 May 2002 and now has more customers than any other UK mobile network.
• O2's UK mobile network covers 99% of the UK’s population.  O2's 3G network covers over 80% of the UK population and is fully HSDPA-enabled, providing speeds of up to 3.6 Mbps for customers with an HSDPA-enabled device.
• Telefónica Europe also owns 50% of the Tesco Mobile and Tchibo Mobilfunk joint venture businesses in the UK and Germany.
• For further press information about O2 go to http://mediacentre.o2.co.uk/

About BT
BT is one of the world’s leading providers of communications solutions and services operating in 170 countries.  Its principal activities include the provision of networked IT services globally; local, national and international telecommunications services to our customers for use at home, at work and on the move; broadband and internet products and services and converged fixed/mobile products and services.  BT consists principally of four lines of business: BT Global Services, Openreach, BT Retail and BT Wholesale.

In the year ended 31 March 2008, BT Group plc’s revenue was £20,704 million with profit before taxation and specific items of £2,506 million.

British Telecommunications plc (BT) is a wholly-owned subsidiary of BT Group and encompasses virtually all businesses and assets of the BT Group.  BT Group plc is listed on stock exchanges in London and New York. 

For more information, visit www.bt.com/aboutbt

About Henley Business School
Henley Business School at the University of Reading One of the Europe's largest full-service business schools, it is also one of the few global business schools to hold triple accredited status (AMBA, EQUIS, AACSB).  The School comprises five distinctive units - the Schools of Economics, Management and Real Estate & Planning, the ICMA Centre and a world-renowned executive education division.

Henley Business School's internationally renowned offering includes an established range of undergraduate and postgraduate degrees, the world-ranked Henley MBA and leading-edge open and customised executive programmes. The School attracts students and programme members from over 140 countries.

Research Expertise at Henley Business School Consistently rated among the UK's top Business Schools based on its research performance, Henley Business School's internationally renowned expertise spans an impressively broad range of areas, from banking and finance to international business, leadership to human resource management; from international economic development to real estate, strategic management to planning.

Our research activities, both academic and business facing, are organised into 17 research centres and centres of excellence, ranging from the John H Dunning Centre for International Business to the Henley Centre for Customer Management, from the Centre for Real Estate Research to the John Madejski Centre for Reputation. The School welcomes leading PhD candidates from all over the world and is the largest producer of DBA (Doctor of Business Administration) graduates in Europe.

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