“One of the principal reasons behind O2’s continued out-performance in the UK has been the success of its innovative SIM-only tariff, ‘simplicity’, that combines the flexibility of a 30-day rolling contract with the best value that O2 has ever offered in a postpay proposition,” stated Telefónica O2 Europe CEO, Matthew Key, as he announced quarterly results that showed O2 UK reporting its best-ever first quarter for contract customer additions and again growing its revenue market share. “Building on our success in the UK, we are now looking to export the concept to other territories including Ireland and Germany,” he said.
Since O2 started proactively marketing the no lock-in model to the UK contract market last summer, the ‘simplicity’ tariff has attracted high rates of take-up. It now accounts for over one third of all O2 online sales and customer numbers will shortly pass half a million. It has proved particularly popular in the family segment and has been an influential factor in the increasing trend of prepay to postpay migration amongst O2 subscribers.
According to Matthew Key: “We believe it’s vital to listen to our customers and to offer them a broad range of choices. As they have faced a more uncertain economic climate, we found some of our users telling us that, whilst they were looking for the value that contracts offered, they did not necessarily want to commit to a long-term tie-in and were worried about maintaining control of their mobile spend. Although we designed ‘simplicity’ specifically to address these requirements, the take-up has surpassed even our own expectations and we see the no lock-in model becoming a more prominent feature in all of our markets going forward.”
For customers who wish to keep their existing handset, ‘simplicity’ offers a range of pay monthly, bundled voice and text tariffs starting at £15 and offering O2’s best ever calling rates. Contracts can be changed or cancelled at any time with only 30 days’ notice. In order to ensure total control of spend, customers can receive a text notification of their outstanding bundle balance at any time and, from the end of this month, they will also be able to obtain it free by calling customer service.
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Environmental Benefits of ‘simplicity’
‘simplicity’ has clear environmental benefits. Last year, O2 joined the Climate Group's Together (http://www.together.com/) campaign to help customers tackle climate change. O2 customers have responded positively to the company’s incentives to recycle handsets, defer handset upgrades, or adopt ‘simplicity’. Together these actions have saved a total almost 3.8 million kilograms of CO2 and contributed over £500,000 to the O2 Energy Saver Fund. In 2008, O2 will continue to actively promote existing incentives and grow the O2 Energy Saver Fund to deliver more home energy makeovers for communities across the UK.
About Telefónica O2 Europe
Telefónica O2 Europe comprises integrated fixed and mobile network operations in the UK, Germany and the Czech Republic, along with mobile businesses in Ireland and Slovakia - all of which use ‘O2’ as their consumer brand. Telefónica O2 Europe also owns the German discount mobile service, Fonic, and 50% of the Tesco Mobile and Tchibo Mobilfunk joint venture businesses in the UK and Germany respectively. In addition, the group includes the Isle of Man fixed/mobile operator, Manx Telecom.
Telefónica O2 Europe, part of the Telefónica group, is headquartered in Slough, UK, and has some 43 million mobile and fixed customers.
About Telefónica
Telefónica is one of the world’s largest telecommunications operators by market capitalisation. Its activities are centred mainly on the fixed and mobile telephony businesses, while its broadband business is the key growth driver underpinning both.
It operates in 24 countries and has a global customer base of more than 233 million. Telefónica’s growth strategy is focused on the markets in which it has a strong foothold: Spain, Europe and Latin America.
Telefónica O2 Europe Contacts:
David Nicholas
Director of Communications
Telefónica O2 Europe plc
david.nicholas@o2.com
t: +44 (0)771 575 9176
Simon Lloyd
Head of Media Relations
Telefónica O2 Europe plc
simon.lloyd@o2.com
t: +44 (0)791 207 2777
Telefónica O2 Europe press office: +44 (0)1753 628402
