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July 11, 2006

O2 relaunches corporate business unit in UK

The UK arm of mobile operator O2 has relaunched its corporate business unit with a more data-driven business model and partnerships to help drive revenue, particularly in the area of its Microsoft mobility offerings.

By CBR Staff Writer

O2 was until recently a Slough, UK-based group with mobile operations in its home country, Germany, and Ireland. It was the result of the 2001 spin-off by UK incumbent BT Group of its Cellnet mobile activities. However, earlier this year it the group was acquired by Spain’s Telefonica and continues to operate under the O2 brand, with coordination of its strategy with that of Telefonica.

The relaunch of the corporate strategy is designed to raise its share of the enterprise mobility market, although O2 declined to disclose actual percentages or how great its ambitions are in the segment.

Ben Dowd, GM of business sales for O2 in the UK, said the main change is the adoption of a more consultative approach, with data rather than voice services taking the driver’s seat.

He also pointed out that the company has struck a number of partnerships with independent software vendors (ISVs) and channel partners. In terms of ISVs, the two top-line relationships are with Canada’s Research In Motion, a partnership that has been in place for several years, and more recently, with Microsoft. O2 has been selling its XDA smart phone range, which runs on the Windows Mobile operating system (OS), for four years, but it is the advent of push email capabilities in that OS from version 5.0 onwards, which has happened in the last six months, that has raised the profile of that relationship.

O2 recently struck a partnership with a UK IT distributor Westcoast for access to a Microsoft channel, for which the ability to offer enterprise mobility services based on the XDA portfolio of devices represents an additional market opportunity. The opportunity will grow as more companies migrate to version 2003 of Microsoft Exchange, which Mr Dowd said is the one in which push email capabilities are available.

The RIM relationship is more mature and so is O2 channel on that side. It does some direct selling into corporate customers, as well as using an indirect channel, with its top 25 partners belonging to the Advance Partner program and enjoying higher commissions as a result. O2 also plans to launch a service in the August/September timeframe based on RIM’s new hosted BlackBerry Enterprise Server platform for the SMB, which follows its recent unveiling of the BlackBerry 7130, a 2.5G smart phone/PDA aimed specifically at the SME space.

Another important factor in stepping up O2’s share of the business market in the UK will be its inclusion on the Office of Government Commerce list of preferred suppliers, a status hitherto held by only Vodafone and Orange.

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O2 is pursuing a two-pronged approach with RIM and the BlackBerry phones and services on one side, and Microsoft, push Exchange and the WM5-based XDA range on the other. A third path based on Symbian phones from companies such as Nokia (which could also offer its own push email platform based on the Intellisync acquisition) does not appear to be on the roadmap, unlike Vodafone, which has a clearly defined own-brand business services strategy, with Symbian phones and push technology from white-label provider Visto.

There are also no plans to embed cellular connectivity into laptops, even though its major competitors in the UK and Germany, Vodafone and T-Mobile, have both announced deals with leading laptop manufacturers. Instead, O2 will persist with its datacard offering, as well as highlighting the fact that some members of the XDA range are WiFi-enabled as well as operating on cellular networks.

While the RIM partnership continues to evolve with the hosted BES offering, the Microsoft deal would appear to be where O2 sees faster growth potential as more companies migrate to Exchange 2003.

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