The key to O2’s future growth is innovation outside the mobile core area of voice, text and data, according to UK CEO Ronan Dunne.
O2 is the only network to have grown in 2009 with good results across consumer, enterprise and broadband; however, it may be difficult to sustain this next year.
Dunne told Mobile last week: ‘If you look at the trends for mobile revenues, voice and text is maturing, but the take-up of data is not big enough to compensate for the decline in voice and text revenues. So our growth is down to taking market share.
‘It’s a very challenging environment. We are not going to reverse the downward trend in our core area, so innovation outside it is necessary.’
Although some of the innovation will centre around smartphones, connectivity will not be enough and future revenues will depend on the services sitting on top, said Dunne.
Financial services and mobile advertising are two areas that excite Dunne. ‘We are delighted at the response to the launch of O2 Money. But we don’t want to be a bank. We want to provide a differentiated experience, get customers confident about using the service, become a trusted brand in that market and then expand on that,’ he said.
Similarly, Dunne believes that mobile advertising is starting to build and O2 is actively recruiting salespeople, while talking to customers about the opportunity.
Dunne has identified m2m as another area that is taking off and O2 is targeting education, health and financial services. In health, he cited the example of a chip sending blood pressure readings from patients at home to the doctor without the need to visit a surgery or hospital.
‘We see a big, big opportunity for us here,’ said Dunne. ‘What excites me is where O2 can demonstrate a great, differentiated user experience and reduce costs at the same time.’
O2’s enterprise hopes
O2 is gunning for the enterprise market. ‘It’s a huge market in which we have a 0% share, so there is a big growth opportunity for us in convergence,’ said Dunne.
‘There are a lot of companies, big and small, that are looking for an integrated solution.’
O2 signed an agreement with BT Wholesale for fixed-line services in October and launched its ‘Joined Up’ b2b convergence offering.
‘We have already signed up some corporate customers for fixed integrated communications, and the early signs of interest in the pipeline make me think the potential will be better than we expected,’ said Dunne.