Case Study 9.1 Reseller Relationship Portfolio Management at O2
O2 is the customer brand name of Telefonica UK Limited, provider of the second biggest mobile phone
network in the UK (the biggest provider is EE, a subsidiary of BT plc). Originally a spin-off joint venture
between BT and Cellnet in the UK, the company is now a wholly-owned subsidiary of the Spanish
global telecommunications giant Telefonica. As well as providing mobile communications services
direct to end-users through the O2 network of retail outlets that can be found widely in shopping malls
and high streets, O2 provides the physical network through which several well-known mobile virtual
network operators, such as giffgaff, Sky Mobile, Lyca Mobile and Tesco Mobile, offer their services.
Along with the other major mobile network operators, 2019 saw O2 rolling out the next, fifth generation
of mobile phone network, known simply as 5G. This new technology promised far greater data speeds
than 4G, providing customers with enhanced convenience, improved entertainment and amazing new
services. But 5G also required massive investment from the network providers such as O2, and the
question for the industry was whether that investment would generate a good economic return.
In a competitive marketplace like the UK, where there is a wide choice of mobile phone providers (those
who sign customers up to a service rather than the company that owns the network) and where overall
market growth is slow, acquiring customers becomes more difficult for providers. Churn rates that were
sources of inconvenience to providers in the early days of mobile communications have become much
more pressing. This is doubly so when one calculates the costs of providing increasingly feature-laden
smartphones, with no guarantee that customers will stay beyond the contract tie-in period. Like the other
operators, O2 has put great efforts into managing its relationships with end-customers in order to
improve this situation.
The intention was to ensure that the relationship with the end-customer was embedded as early as
possible and managed so that the customer felt no compulsion (or even motivation) to leave.
O2 introduced customer relationship management programmes underpinning its commitment in this
