With ten years at O2 under his belt, newly promoted business development director Tim Sefton isn’t one to shy away from the unknown.
This was put to the test late last year, when O2 underwent a major restructure of its business and consumer divisions in a bid to reaffirm its status as a services company beyond just mobile.
Health, MVNOs and M2M now come under former customer director Sefton’s remit. Meanwhile, O2 Health chief Keith Nurcombe and his team moved directly to the new business team under Sefton.
The move gives Sefton, who reports directly to CEO Ronan Dunne, a large and challenging remit. The business is targeting growth in areas other than just mobile under his watch, with health, money, education and media a particular focus for 2011.
Sefton says: ‘Rewind two to three years, when I came in as customer director, the thinking was how can we continue to be successful but anticipate we will create maturity in the market?
The company has launched three new businesses since then – its mobile advertising arm O2 Media, its financial arm O2 Money and its healthcare division O2 Health. ‘And we’ve acquired [VoIP company] Jajah and spun off [MVNO] Giffgaff,’ he says.
As part of this restructure, brand innovation sits under Sefton. His reports include Gav Thompson, who was responsible for the idea of Giffgaff, as well as O2 Money chief James Le Brocq, O2 Media’s Shaun Gregory and O2 Health head Keith Nurcombe.
‘We also have Project Enid coming in the New Year,’ says Sefton, but he refuses to elaborate further on what that might be.
Each of O2’s non-mobile arms has been hugely successful so far, Sefton says. ‘The team is dedicated to thinking how to scale the business in new areas of customer experience for momentum and success. There are 850,000 customers across the financial services products – we have the money card and device insurance as well as other insurance.’
He adds that the company is ‘very happy’ with the O2 Media advertising business and 1.4 million O2 customers have already opted in. There are also a number of brands that are regular customers. ‘One of the best things is repeat business – we are seeing them launch bigger campaigns,’ says Sefton.
‘In a number of these areas we have tested the concept – O2 Media is already self-funded. One of the themes is building business units in their own right but also the synergies,’ Sefton adds.
But a challenge for brands making apps is ‘discoverability’, says Sefton, adding that one of the biggest successes of working with brands has been a NatWest app advertised to O2 users via the network. The app got a 30% download rate – a considerable success in the advertising world.
And O2 sees potential for companies such as voucher discount brand Groupon. ‘They have a community of customers and ask them to opt in,’ says Sefton.
‘We see the opportunity to acquire good value apps and opportunities to improve redemption.’
M-commerce is taking off, Sefton says, and the operator is poised to take big strides forward in the area in 2011. ‘There is the potential opportunity for the platform,’ he adds.
The company is also active in the education sector. O2 Learn was launched last year as part of the operator’s ‘think big’ initiative.
Sefton says: ‘It’s how to operate in the community in which we operate. With our community programme we sponsor local communities. O2 Learn is about how we can help and support the classroom and teachers. It’s the ability for teachers to upload their best lesson onto YouTube.
‘This shows our wish to make a positive contribution to how these kids are growing up. Longer term is the opportunity for M2M but it is early days.’
Sefton predicts that people are going to learn by video in the future, which will be made possible with more capacity on the network.
The operator already has a video of former tennis star Tim Henman teaching beginners how to serve, plus a ‘huge amount of endorsement’,
O2 also has the National Union of Teachers (NUT), Teach First, Parentline Plus and David Blunkett on board, as well as a competition where the best teacher of the week gets a £100 prize. At the end of the year, £100,000 goes to the best school.
Sefton adds: ‘One of the benefits will also be getting ideas from others. Also, competition will help to increase standards.
‘The point is, it’s a great example of how we can use our capabilities. The people we are hiring for these new roles are all experienced in their areas. My view is, you can look at the assets – we are as good as the people we can acquire. We got [O2 Media MD] Shaun Gregory from the Telegraph and Keith Nurcombe [O2 health chief] from the health sector.’
He adds: ‘As we go into new areas, we will find ways to build capability using brands and the people that we deal with. We are looking at how we can work with other operators to create that opportunity.
‘Necessity is the mother of all investment. Customers want reach. What form that might take I don’t know.
Media metrics already enable brands to see where customers sit. We need to find ways to accommodate platforms of scale.’
O2 and its Money partner, NatWest, parted ways last year, but the deal will now move over to someone else. Sefton says: ‘We are looking at a credit card product for the first half of 2011. It will be a platform that will allow us to offer prepaid and postpaid products.’
In 2011 there are ‘a couple of different phases’, says Sefton. He adds: ‘There will be a point when we can allow customers to make payments on their phones – the second half of the year will be about NFC in terms of device capability and point-of-sale capability. O2 Media and O2 Money will be part of this.’
This gives O2 the opportunity to think about the business as ‘not just a one-sided model’, Sefton says. ‘We would offer both choices – prepay and postpaid – look at the Oyster card. We will look at the wallets of the customers. Who are the other brands – the loyalty cards – and how can we replicate that kind of experience?’
In good health
Meanwhile, O2 Health is also going strong, after the operator embedded it in three health authorities.
‘All of these represent things we can add to the core,’ Sefton says. ‘There are £400m of savings to be made from the NHS. We are also working on a product called “Help a Hand” to be launched in 2011, because the Government will need to do more remote care of the elderly. We see mobile technology as a big part of extending the platform and the way it connects to relatives. Mobile technology means you can tell when people fall over and the technology will improve.’
O2 has had its M2M business unit for some time. ‘It’s about the “internet of things” and is a huge opportunity – we are seeing a lot of growth in the last few years,’ Sefton says. ‘This is about growth from an acorn into an oak tree.’
And the network, for which O2 has been heavily criticised in the past, is the foundation for this growth.
‘We invest £1m a day and this will be around £2m a day this year,’ says Sefton. The operator will proba