O2 says it will not rush into the congested high-speed internet market following its &£50m purchase of broadband provider Be.
Former marketing director Russ Shaw, now O2’s innovation boss, says the mobile giant will learn lessons from the demise of Bulldog, which announced last week that it would stop selling its broadband service to consumers.
“Bulldog built up some brand awareness, but because of service problems the perception of it was very negative,” says Shaw, who has taken on the new role of director of capability and innovation. “You’ve got to make sure the service behind the proposition is right from day one, otherwise people will turn off quickly. You can have great value for money but if the service is not right it can tarnish your brand.”
Be is building a broadband network and expects to cover 50% of the UK population by the end of this year and 70% by the end of 2007.
Explaining the decision to buy Be rather than one of its more established rivals, Shaw says: “Be doesn’t have a huge customer base but O2 has 17 million customers. We’ve got the customers and Be has got the operational capability. Also with Be we felt the baggage was minimal.”
Meanwhile, O2 is expected to confirm this week that it has bought The Link’s 300 retail stores from DSG International. The deal could see M&C Saatchi lose the high-street retailer’s &£6m advertising account.