8/5/2009 1:59:00 PM
Retention is secret to O2 success as market leader
O2 CEO Ronan Dunne has attributed its leadership of the UK market to its decision to make retaining customers a priority.
‘Our postpay churn is the lowest of all the operators. We are taking our fair share of the gross market, but we are really growing through retention and that’s due to investment in customer satisfaction,’ he said.
He conceded the growth of the business was slowing, but was buoyed by the company performing better than rivals.
O2’s competitors are understood to have identified O2’s prepay segment as an area of greatest vulnerability that they can target. O2 lost 60,405 prepay customers in the period.
Dunne said: ‘Two things are going on here. There are a lot of prepay customers moving into Sim-only contracts, and we are taking more than our fair share of that. The other is that the MVNOs are taking a bigger share of prepay.’
He also said O2 wasn’t active in the low-end of prepay. ‘We’ve never competed in the low-end of prepay, which is just a target for box breakage. We’ve been careful not to arbitrage in the low-end.’
Orange and Vodafone appear to be in the process of mounting their most serious challenge to O2 in the second half of 2009 after adjusting their businesses over the last year.
Dunne said: ‘Because our revenue and profits are growing I don’t have the same problem the others have – that they are not getting the cash they need to invest in the customer.’