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O2 CEO tells rivals to mind their own business

Paul Withers
May 29, 2015

Ronan Dunne claims Q1 financial results show operator remains united ahead of impending sale to Hutchison Whampoa

O2 CEO Ronan Dunne has warned its rivals there will be no let up ahead of its proposed sale to Three-parent Hutchison, insisting its achievements since the start of the year makes it “impossible to ignore”.

Dunne (pictured) was speaking to Mobile News following the release of its Q1 results (see box out), which saw customer numbers rise (138,000) for a fourth consecutive quarter, with profits also up.

Dunne claimed the results have proven its doubters wrong, admitting he has grown frustrated by suggestions in the market – including from unnamed rivals, that its £10.25 billion sale to Hutchison, (announced in December) would distract the company and affect performance.

“We’re pleased with the quarter, and the start we’ve made,” said Dunne. “Some people thought, including our competitors, that they didn’t have to worry about [O2] with us being distracted by other things, but we’ve continued to focus on the customer and made O2 impossible to ignore in the market.

“Even our executive chairman César Alierta (see page 16) called out the UK business on a conference call to discuss the financials and commended it, not just on its performance, but that it has delivered brilliantly for customers and has not been distracted by other things.”

Internal excitement

Dunne revealed the company has worked hard to ensure all 7,500 UK-based staff remain focused on their day-to-day duties in order to maintain recent momentum.

He claims a “majority” of staff are excited by the firm’s future and the prospect of working for the largest UK operator with a base north of 35 million customers.

“Staff have also been reading the stories and there is a chance they could have also been distracted but we have set out our stall very clearly – not only is it business as usual, but [a case of] how do we make the O2 story more compelling in 2015?

“The vast majority of our staff are excited about building a stronger and more capable customer champion. There is huge respect in both businesses and staff can see there is real opportunity and alignment between the two.”

He continued: “There will always be a period of uncertainty because staff are not entirely sure the acquisition is going to go through and exactly what will happen after that. What we are trying to do is position everyone individually and the business collectively to be in the best possible shape when the deal closes sometime next year so that everyone is able to be very positive when asked how we performed in 2015.”

Unrivalled customer service

Dunne also laid down the gauntlet to the BT and EE joint entity, warning the duo they have much work ahead of them to match O2 and Three’s customer service levels.

Like Hutchison Whampoa’s acquisition of O2 UK from Telefónica, BT’s proposed purchase of EE for £12.5 billion is subject to regulatory approval but if cleared, could be completed before the end of this year.

However, Dunne questioned both firms’ ability to serve their customers efficiently, highlighting recent customer satisfaction surveys and complaints data from Ofcom,in which BT and EE performed poorly.

Last year, Ofcom interviewed over 6,000 consumers as part of its customer satisfaction research and of those 3,402 had contacted their provider between July and September.

O2 was a clear winner with a satisfaction score of 78 per cent, rated above the average of 73 per cent on a number of measures, including making contact, usefulness of information, the effective logging of query details and keeping the customer informed. Three was placed third of the four operators with a satisfaction score of 70 per cent, while EE was bottom with 69 per cent.

Last month, Ofcom revealed its latest customer complaints findings. Among the four mobile operators, Three and O2 were rated best, with 0.02 and 0.03 complaints per 1,000 customers respectively, while EE was the second most complained about network with 0.12 complaints in front of Vodafone.

EE was also the most complained firm for fixed broadband and landline, with 0.42 and 0.33 complaints per 1,000 customer respectively, while BT was the second most complained about firm in the former category with 0.26 complaints.

“What we have to make sure of is that we are seen customer champions and continue to have the scale and capability to compete,” said Dunne. “In that context, we very much see the combination of that opportunity with Three.

“Customers are best served by capable operators in the market who are able to invest and differentiate service, and that is something both ourselves and Three have a track record of doing.

“Let’s be clear, in Three and O2 you have the number one and number two brands by Ofcom for the least level of customer complaints. Clearly BT and EE have a bit more of a challenge in that category.”

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