Broadband seen feeling O2 heat soon

May 15, 2006

When it comes to phone services, European markets are often ahead of the curve, particularly when it comes to making the most out of mobile phones. Paying for parking or getting a drink from a vending machine via a mobile handset is all too common in Finland or Germany but effectively unheard of in the United States. Meanwhile, text-messaging had been flourishing in Britain years before U.S. users finally started getting into the quick-fingered mode of communication.

Britain may well be leading the pack when it comes to having a cut-throat telecommunications market too, as the barriers between cable and satellite, wireless and fixed-line, as well as Internet and television come tumbling down. The latest news to heat up the competition comes from O2, the mobile carrier that was once the wireless arm of British Telecom, as it prepares to challenge its former parent company.

O2 itself was bought out by Spanish telecom giant Telefonica last year, as the company sought to expand its hold in Western European markets. In announcing Telefonica's latest earnings results last Friday O2 Chief Executive Officer Peter Erskine said the company was expecting to go beyond simply being a wireless provider and start offering fixed-line service as well in Britain and beyond. In addition to operating in Britain, O2 has control of Telefonica Germany as well as Cesky Telekom of the Czech Republic.

"Convergence is something that customers will want, and we'll be learning from our experiences in the Czech Republic and Germany and doing similarly in the rest of our businesses," Erskine said, adding that "before we became part of Telefonica, we saw an opportunity in convergence, and Lady Luck has brought us two businesses in that space." Specifically, the company is expected to enter the broadband market and offer high-speed Internet access, thereby offering bundled services of broadband and mobile-phone connectivity.

"It is pretty certain we will go down the DSL route ... if we do DSL alongside mobile we then have just about everything the customer wants," Erskine said.

Britain's Daily Telegraph reported that the company might actually be considering buying out a broadband provider to make that vision a reality, such as Bulldog, Pipex or Tiscali. Whether or not the company buys out another company, it is clear that O2 is preparing itself to challenge BT head-on as the British telecommunications market becomes increasingly fierce.

Last month cable group NTL bought out Virgin Mobile, having bought out Telewest last year, and became the first British carrier to offer what is known as quadruple play -- mobile, fixed-line, Internet and television programming -- under a single company. That merger has put pressure on rival companies to offer all those services themselves, and industry leader BT itself has made clear that it will be offering cable networking before the end of the year. The latest pronouncements by O2, however, is making it clear that it will be facing challenges even in its core operations from rivals, particularly as Telefonica is already the biggest provider of television over the Internet.

Copyright 2006 by United Press International

Explore further: Making smartphone browsing 20% faster while reducing power consumption by 40%

add to favorites email to friend print save as pdf

Related Stories

MasterCard, Zwipe announce fingerprint-sensor card

15 hours ago

On Friday, MasterCard and Oslo, Norway-based Zwipe announced the launch of a contactless payment card featuring an integrated fingerprint sensor. Say goodbye to PINs. This card, they said, is the world's ...

Plastic nanoparticles also harm freshwater organisms

16 hours ago

Organisms can be negatively affected by plastic nanoparticles, not just in the seas and oceans but in freshwater bodies too. These particles slow the growth of algae, cause deformities in water fleas and impede communication ...

Atomic trigger shatters mystery of how glass deforms

16 hours ago

Throw a rock through a window made of silica glass, and the brittle, insulating oxide pane shatters. But whack a golf ball with a club made of metallic glass—a resilient conductor that looks like metal—and the glass not ...

Recommended for you

Is sending shoppers ads by Bluetooth just a bit creepy?

Oct 17, 2014

Using Bluetooth wireless networking to send information to nearby smartphones, beacon technology could transform how retailers engage with their customers. But customers will notice how their information is ...

User comments : 0