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Corporate
responsibility
report 2003
Introduction to report
Group overview
Our approach
Corporate governance
Summary highlights
Business Principles
What mobile can do
Our performance
Understanding your
opinions
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Assurance
statement
Introduction to report
David Varney, mmO2 Chairman   "Companies say a lot of things about what they are and what they want to be. But the ultimate test of any company will always be what it actually does and the impact that its actions have on society at large."

David Varney, Chairman, mmO2 plc
 
Chairman's introduction
The people whom we affect demand action from us. They are a diverse group, each wanting and expecting different things of the Company. Yet all of them are rightfully mistrustful of fine words and gloss. We want to engage with them in active dialogue. Where we have anticipated their concerns, we are keen to tell them about the processes and policies we have put in place to make sure mmO2 operates responsibly. Where we fail or have more to do, we believe in addressing the issues that matter to them, frankly and openly.

There are two reasons why we take this active approach. First, we must do so if we are to deliver the sort of long-term value to our shareholders that we have promised. Second, it is the surest way for us to achieve our prime goal - to make people's lives richer by offering access to mobile communications of excellent quality.

This is the first corporate responsibility report from mmO2. We have called it "What mobile can do" because we firmly believe that our mobile services can help to tackle real social needs. This conviction is at the heart of our approach to corporate responsibility and we are determined to understand the different needs of our stakeholders and develop appropriate services to benefit society in different ways.

We bring other things to society as well: inventiveness, an appetite for risk-taking, an ability to manage complex problems and an instinct for innovation. These can all make a big difference to people's lives and the communities in which we operate. Society around us clearly wants us to participate in projects where our services can bring real social benefits. It is a desire we share because, in the end, this is what will turn our approach to corporate responsibility away from an essentially inward-looking exercise to one that is outward-looking and genuinely useful.

But this active approach to corporate responsibility is not just about promising benefits. It also defines how we address the concerns people may have about the way in which we operate and about the services we offer.

Mobile telecommunications is an extraordinary innovation. It is seen increasingly by people of all backgrounds, circumstances and age groups as essential to modern life. As the technology advances from simple voice based systems to sophisticated data and internet solutions, the social impact of mobile telecommunications is likely to grow.

People clearly want to use our services - but they have concerns about it, too. Does the equipment they use pose a threat to their health? Will our network create wider hazards and scar the environment? Will children be able to use mobiles safely without fear of crime? Will they be protected from seeing, reading or hearing inappropriate adult content? Will our customers' privacy be respected as the state seeks emergency access to phone and email records? Are our services properly, competitively and transparently priced? Do we offer our employees healthy, safe and fair employment with real access to opportunity? Do our suppliers apply the same standards?

We have a duty to take these concerns seriously and address them directly. We will do so through active dialogue with every group that seeks to engage with us and to express their concerns.

I hope this report will demonstrate that mmO2 is serious in its intentions. With some 18.2 million customers and around 12,000 employees in some of Europe's principal mobile markets, we have a significant responsibility to discharge.

But we are at an early stage in our history. We demerged from BT as an independent business in November 2001. Just over 18 months later, we have made significant progress in creating a corporate responsibility framework for the Company which we believe is challenging, meaningful, open to scrutiny and ready and able to account for itself. But we have further to go, and this report is only a marker on our journey.

Your comments matter to us, and I would encourage you to tell us about your thoughts on this report and on our performance as a company through our feedback page.

David Varney, Chairman, mmO2 plc
27 June 2003

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The business of corporate responsibility
Peter Erskine, Chief Executive Officer, mmO2 plc

Corporate responsibility has become an important reality of the day-to-day business of being in business. It matters as much as getting customer services right, maintaining effective financial controls, seizing the right market opportunities and delivering growth. Indeed, it underpins all of these things. It is a social fact. It is a corporate reality.

After several years where public confidence in some corporations has been knocked, I see this as a positive and serious development. We are only beginning to understand the way that our performance as a business is directly related to how we conduct ourselves as a company. Our desire to grow and deliver returns to shareholders, for instance, will be undermined if we do not command the respect of all of our stakeholders and will be enhanced if we do. For example, our efforts to convince regulators with our arguments on pricing, say, will be made easier if our stakeholders have confidence that we can be trusted to behave responsibly in this and other areas of our business.

At mmO2 we are absolutely clear that this challenge is real. Box ticking and theorising about corporate responsibility are simply not enough. We need to go much further and will rightly be pulled up if we do not. We are addressing a sophisticated and demanding audience.

Since mmO2 was established as an independent company we have done some important work to assist us all in understanding this fact. Our employees are inspired by the idea of working for a business that takes its responsibilities seriously. In the 2003/04 financial year we will be extending this work amongst our employees. The message will be simple: that corporate responsibility - how we behave as a company in the wider context of society - is a business priority and that our long-term success depends on it.

Peter Erskine, Chief Executive Officer, mmO2 plc
27 June 2003

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Danuta Gray, CEO O2 Ireland

"We have made disadvantaged young people and the digital divide between urban and rural communities the focus of our corporate responsibility work. Ireland is a young country. Some 38 per cent of the population are under the age of 25 and, despite economic growth, there are still pockets of disadvantage where young people desperately need the chance to realise their own potential. We think there are things we can do that will make a real difference. We are also determined to help bridge the technology gap that exists between Ireland's cities and its rural communities. To this end, we are the only mobile operator to bring wireless broadband technology to the regions. We were recently selected by the Government to participate in a trial programme to see if we can speed access to broadband services using wireless rather than cable or other fixed links."

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Rudolf Gröger, CEO O2 Germany

"Corporate responsibility is important for German business. Our employees, customers and other stakeholders want us to take a higher profile in wider society. We have already proved that we can react fast to assist citizens, public agencies and aid workers when critical situations arise in society and during catastrophes. Our effective intervention to help victims of the floods in Germany last summer is a good example of this. This was a situation where mobile telecommunications played a key role in saving lives in the worst hit areas."

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David McGlade, CEO O2 UK

"In the UK we have been putting increasing effort into improving the levels of service we offer our customers. That effort starts inside the Company demonstrating to employees that, by offering outstanding service and ensuring great experiences every time customers come into contact with us, we will stand apart in a highly competitive market. This has caught people's imagination across the Company. This effort is important to the wellbeing of customers who increasingly rely on their mobile phones to stay in touch."

"How we operate as a company translates quickly to the customer and the public at large. Employees like the idea that mmO2 is a company that is determined to use mobile as a force for good in society and actively engages in community initiatives. To do that we also need to be sure the Company itself reflects the diversity of the communities we work in."

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Kent Thexton, Chief Marketing and Data Officer mmO2 plc

"The launch of our widely acclaimed xda - phone and mobile computer - and the BlackBerryTM mobile email handset were a strong signal of our determination to lead the fast growing mobile data market. As our technology advances mobile will increase its impact on people's lives, both at work and at home. It will make it easier to stay in touch while on the move, to work more flexibly and efficiently, and will bring a whole range of useful information applications and new forms of entertainment to people. We want to be sure that we understand the different needs of our customers and that we can bring real, timely benefits to customers across our markets and society at large. We also believe that mobile technology can bring real benefits to the environment, through increased opportunities for tele-working and instant wireless internet access."

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Chris Hall, CEO Manx Telecom

"Manx Telecom is extremely proud to have launched Europe's first ever operational 3G mobile phone network. We serve a relatively small community on the Isle of Man, yet as a business we are in the vanguard of one of the world's most important new technologies. We have demonstrated the innovation, power and potential of 3G mobile to over 1,500 visitors from around the world, including UK and international policy makers."

"Just as importantly we have quickly put the technology to use in the education sector, one area where it promises so much. Connecting the personal computers on our schools telecomputer bus to broadband internet via a single 3G mobile phone was another first in Europe. The primary school children were witnesses to a significant breakthrough in modern communications. We are convinced wireless services will continue to make a major difference to their lives."

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Peter Richardson, Managing Director O2 Airwave

"At Airwave we are introducing a new and powerful communications tool for the emergency services that promises for the first time to allow the police, fire crews and paramedics to co-operate efficiently and co-ordinate their response to tackling emergencies. The system offers users far more security, the ability to call instantly for back-up and cannot be scanned or listened into. Deploying the Airwave network to provide complete national coverage, initially for 53 police forces in the UK, is being carried out. It is a huge development and construction project that we believe will deliver big benefits to society. We are determined to carry out this important work efficiently and sensitively, responding quickly and clearly to worries and doubts stakeholders have about the roll out of the network."

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