Telefonica changes to be ‘minimal’, states O2 boss

O2 has vowed to learn lessons from France Telecom’s takeover of Orange in the week that Telefonica assumes control of the company.

Some observers think O2’s brand, arguably the strongest in the UK mobile sector, will suffer as part of a vast telecom giant. They claim Orange, seen by many as the world’s most innovative mobile company during the 1990s, has not been the same since its takeover by the French company in 2000.

But in an exclusive interview with Marketing Week, O2’s marketing director Russ Shaw says: “We are conscious of what happened with Orange and France Telecom, and do not want to replicate it. From a structural point of view, O2 will be a separate division and there will be minimal change in terms of personnel. It will be business as usual for the foreseeable future.” Speaking as O2 reported its best customer growth since it demerged from BT five years ago, Shaw adds that the company will continue with its customer retention strategy in 2006, with a new advertising campaign through Vallance Carruthers Coleman Priest (VCCP) expected in the spring.

O2’s customer base grew by 18 per cent across the group in the last quarter of 2005, with the company gaining 1.75 million new subscribers – 895,000 of whom were in the UK.

Vodafone also beat forecasts for customer and revenue growth this week, adding 7.1 million new customers worldwide over Christmas. But pressure is growing on chief executive Arun Sarin after Standard Life Investments became the first big investor in the company to publicly criticise the group’s global strategy.

Standard Life wants to see Vodafone sell its 45 per cent stake in US network operator Verizon Wireless.

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