New strategy for business from O2

O2 has revised its corporate strategy to grow its share of the market and challenge Vodafone’s current pre-eminence among business users.

O2 will be looking in particular to cater for a rising demand for mobile data, and it will take a more IT-centric approach to selling mobile and data solutions to corporate customers.

Most analysts are predicting that enterprise mobile data revenues will be close to £1bn by 2010, and O2 wants some of that action.

Half of corporates say that mobile is now driven by the same strategies that govern IT and 55% fund it from the same budget, but fewer than 10% of employees currently leave the office with even the ability to use mobile email. O2 thinks this suggests that companies still need help in turning good ideas into practical applications and strategies.

The new approach involves three key changes:

  • A new sales academy to equip O2 salespeople to better understand client needs and to provide customers with access to experts.

  • A shift to what O2 terms “a more IT-focussed consultative approach to sales”. This appears to mean collaboration with leading players in the IT space such as Microsoft and its accredited VARs. It has also inked a deal with wholesale IT distributor Westcoast to extend its sales strategy beyond traditional telecoms channels to the IT market and enable IT resellers an end-to-end mobility solution. Westcoast’s value-added resellers will be given the opportunity to train as ‘mobility specialists’ to offer the full range of O2 voice and data tariffs. Other Westcoast IT dealers will be able to offer transaction-based O2 product bundles.
  • Recognition that partnerships are key and that O2 partners with the best in the business. This seems to be the flipside of the IT-focussed approach, building on the generally excellent reputation O2 has established with its Advance dealers and extending this to the IT world.

O2 has just received accreditation as a Microsoft Certified Partner – the only UK network to enjoy such recognition from the software giant.

If you think this suggests that O2 is trying to learn from the experience of IT outsourcers and VARs, you’d be right. Ben Dowd, General Manager for Business Sales at O2 UK, talked about “a whole new value chain” emerging to help enterprises create value from their mobile implementations. “We believe that operators need to adapt very quickly to these shifting trends or they will struggle to survive in the corporate market.”

Tellingly, he also said: “We need to think much more like an IT company than a network operator”.

Initially at least this doesn’t mean anything as simplistic as new tariffs or service offerings. O2 knows it cannot compete on price for the big corporate clients. Instead it aims to talk their language, negotiate deals, and build up partnerships with names the clients already know.

O2 has recently secured a corporate contract with the AA, which it won from Vodafone, to supply AA fleet members with GPRS services. The deal comprises around 5,500 voice connections and over 3,000 data connections.

The commercial tie-up will also see the AA’s 4.2m members offered tariff discounts of around 30% if they sign to O2.

The AA deal comes on the back of authorisation from the government’s procurement office, the OGC, which accounts for around 30% of the UK corporate market. It means O2 is able to bid for managed services work in the public sector. Vodafone and Orange already have supply contracts with the OGC, but this is the first time that the OGC has recognised O2 as a preferred supplier.

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