Telefónica O2 Ireland Limited
TypeSubsidiary
IndustryTelecommunications
Broadband Internet access
Predecessor
  • Esat Digifone 1996 (1996)
FoundedIreland (1997 (1997))
FounderEsat Telecom Group
Defunct2 March 2015
FateAcquired by Three (3) (2014)
SuccessorThree Ireland (Hutchison) Limited
Headquarters
28–29 Sir John Rogerson's Quay, Dublin
,
Ireland
Area served
Ireland
Brands48 Months[1]
RevenueDecrease€905 million (2009)[2]
Number of employees
1,787 (2006 (2006))
Parent
Websitewww.o2.ie

Telefónica Ireland was a broadband and telecommunications provider in Ireland that traded under the O2 brand (typeset as O2). O2 Ireland was previously called Esat Digifone when it was owned by Esat Telecommunications (and Telenor) from 1997 to 2006.

O2 Ireland became a subsidiary of Telefónica in 2006, after its parent company O2 in the United Kingdom was purchased. In June 2013, Hutchison Whampoa announced it would acquire the Irish arm of O2 for €780m.[3] O2 was merged into Hutchison Whampoa's subsidiary Three Ireland in March 2015.[4]

History

1997–2000: Origin

Esat Digifone

In 1995 the government, with Michael Lowry as Minister for Transport, Energy and Communications, authorised a second mobile phone network, to compete with Eircell owned by the semi-state Telecom Éireann. The licence was awarded to Esat Digifone, a joint venture between Denis O'Brien's company Esat Telecommunications and Norway's Telenor, which began operations in 1997. The Moriarty Tribunal found in 2008 that the awarding of the licence was influenced by payments made to Lowry by O'Brien.

2000–2001: BT ownership.

In 1999, Esat Telecom and Telenor began to dispute how Esat Digifone should be operated. Telenor removed the word Esat from the companies name, and began the attempted removal of Denis O'Brien as chairman of Digifone. Esat Telecom retaliated by threatening to take legal action against Telenor, and make repeated offers to buy Telenor's share of Digifone.

In November 1999, Telenor placed a bid for the entire share capital of Esat Telecom as a way of resolving the conflict. The bid was rejected by the majority shareholders of Esat Telecommunications who voted against the takeover. In January 2000, British Telecommunications counteracted Esat Telecom failed bid by placing its own bid to buy Telenor's shares in Digifone.

In January 2000, British Telecommunications made a takeover offer for Telenor which was backed by Esat Telecommunications shareholders. Esat Telecommunications became a wholly owned subsidiary of British Telecommunications and was delisted from the stock market. When BT acquired Esat, they began integrating the business along with its Northern Ireland subsidiary, BT (NI). This eventually became BT Ireland. However Esat Digifone was not part of the operations integrated with BT's existing Irish operations. Instead, it became part of the BT Wireless division within BT, and was briefly rebranded simply Digifone. This branding lasted for less than six months.

2001–2005: Demerger from BT Ireland

In 2001, the BT Wireless division became mmO2 plc, a separate company, through a demerger from BT. British Telecommunications shareholders received 1 BT Group and 1 mm02 share for each British Telecommunications share they held. After the de-merger, most of mmO2's operations, including Digifone, were rebranded O2. mmO2 plc later became O2 plc and remained an independent company until 2005.

2005–2006: Telefónica transition

On 31 October 2005 it was announced that Telefónica, S.A., the Spanish telecommunications company, had made a recommended takeover bid for O2 Ireland's parent company, O2 plc. This was then approved by shareholders and O2 was officially purchased in mid February 2006. The O2 brand is now used in several countries for Telefónica's mobile operations outside Spain and Latin America, where Telefónica fixed line and mobile services are branded as movistar. In January 2009, it was revealed that Ireland was nearly the most profitable market in the world for multinational mobile operators like O2.[5]

2006-2013

On 23 March 2009 Vodafone and O2's parent company Telefónica announced a deal to share their existing networks in Ireland and rollout future infrastructure jointly.[6]

On 6 April 2011 it was announced that Telefónica O2 Ireland and Eircom had agreed a new network sharing partnership.[7]

2013: Hutchison 3 Ireland merger

On 24 June 2013, it was announced that Hutchison Whampoa would acquire Telefónica's Irish mobile operations for €780 million, to be merged into 3 Ireland upon completion of the deal.[8][9][10] The deal was cleared by the EU in June 2014. On 15 July 2014, the acquisition was fully completed.

On 2 March 2015 it was announced on social media that O2 Ireland and Three Ireland were merging with O2 posting the following message to their Twitter page:

"Today, O2 will become Three as 1.5 million customers are welcomed into the Three family. This means the O2 logo will be replaced by a Three logo in stores, on the website, and on phones and bills. All the benefits you experienced as an O2 customer remain the same, including the same network quality and award winning customer service. You can also look forward to improved data coverage and superfast broadband."

While Three Ireland posted the following message on their Twitter page:

"Today we welcome 1.5 million customers to Three. This means the O2 logo will be replaced by a Three logo in stores, on the website, and on phones and bills. Please visit our FAQ section if you have any further questions."

This change meant that Three Ireland had over 1.5 million customers on their network putting them up near the customer numbers of Vodafone Ireland.

Services

O2 was the second largest telecommunications provider in Ireland, with approximately 40% market share or 1.6 million customers. The company's STD prefix was 086, but following the introduction of full number portability, some O2 Irish mobile numbers featured prefixes starting 087, 085, 089 or 083, as customers may switch provider but keep their old phone number.

The company provided WAP and GPRS services under the O2 Active brand. In October 2005, O2 Ireland launched a version of NTT DoCoMo's i-mode service. The company held a UMTS licence, and was the third Irish operator to offer 3G services, after Vodafone Ireland and Three Ireland, offering services in some built-up areas in late 2006.

O2 Broadband

In July 2007, O2 launched its mobile broadband offering in Ireland using HSDPA technology over its 3G network. They provided speeds of up to 7.2 Mbit/s and claimed to cover 90% of the population on the least contended Irish 3G network following an upgrade in 2007.[11]

Speak Easy

Speak Easy was the name of O2 Ireland's prepaid service. In 2007 they became the first Irish operator to offer free text messages to all Irish mobile numbers, although it only applied for weekends. However, in early 2008 they introduced a new tariff which offered unlimited free text messages to all networks at any time, for life.

The term "speak easy" was introduced when the company was branded as Esat Digifone

O2 Freedom

The O2 Freedom plans were introduced in June 2013 which offered 2 main new price plans, Freedom talk and Freedom Internet. O2 was the first Irish operator to offer free calls to all networks at any time on prepay. This offer was Freedom Talk and gave customers Unlimited calls to all Irish mobiles and landlines which required a €20 top up of which €10 was deducted for the offer. Freedom Internet offered 1GB of data and 350 any network texts. Same terms applied as per Freedom talk. In December 2013 the data allowance of 1GB was increased to 7.5GB which O2 advertised as Unlimited Internet. Along with the new price plan O2 also launched a vast amount of prepay addons such as Talk, Text, Data, International Talk and International text.

Corporate affairs

Company structure

In 2010, O2 underwent a restructuring phase, implementing a number of cost-cutting measures which involved outsourcing internal divisions to external companies. O2's IT division was outsourced to IBM Ireland, while the Network Operations division was outsourced to BT Ireland (who also run the network operations for Three Ireland). The Network team outsource was limited to the Field Operations team along with some other support functions. The Network rollout team & Transmission team remained in-house to facilitate future network changes. It was more cost effective to retain these divisions in-house.

Charitable activities

In 2006 O2 chose Irish Autism Action as their charity of choice. The three-year deal involved sponsorship, creating awareness, using O2 staff to assist the charity and using technology developed by O2 to assist children affected by autism. In 2010, the company's charity of choice became Headstrong, a charity providing mental health support to young people.[12]

Sponsorship programmes

Over the years, O2 entered into some very high-profile sponsorship arrangements. In 1998 the then ESAT Digifone committed its support to the Hurlers & Footballers of Cork. They remained sponsors of Cork GAA for ten years.

Another high-profile sponsorship agreement was their association with the Irish Rugby Football Union and the Ireland national team, which has been continued by Three. Building on their rugby links with Shannon RFU, O2 joined forces with the top level of rugby in Ireland. They also sponsored the West Stand at Ireland's former home ground, Lansdowne Road.

They were also the title sponsor of one of the country's most high-profile venue, "The O2", now renamed the "3Arena".

They were title sponsor of the Aisling Foundation's Ability Awards.[13][14]

Chief executive

Tony Hanway was Chief Executive of Telefónica Ireland from his appointment in September 2011 until March 2015.[15] Hanway first joined Telefónica in Ireland in 2005 as Head of Customer Care, subsequently becoming Consumer Sales Director. Immediately prior to taking the role, Hanway headed up the Consumer division of Telefónica in the Czech Republic, managing a team of over 4000 people across the retail, online and customer care functions.

Criticism

In July 2004 the company admitted overcharging 71,000 customers following a review of its systems. The disclosure meant that 136,535 O2 subscribers - more than 10 per cent of its customer base - were overcharged.[16]

Analysis by the Sunday Independent in January 2006 showed the massive margins being earned by Vodafone and O2 in the country were costing Irish mobile phone users about €300m a year. If the mobile phone companies were to cut their Irish margins to the group average, O2 customers would end up paying €84.07 less every year (€7 a month less).[17]

The European Commission upheld a ruling by the Irish regulatory body, ComReg, that the Irish mobile phone market needed greater competition, and acknowledged that "tacit collusion possibly existed between O2 and Vodafone".[18]

In May 2007, O2 Ireland management announced that the entire O2 Ireland technical staff were to be outsourced to a single Managed Service Provider.[19] The next month O2 customers got a busy signal or no dial tone at all when they tried to make calls due to a network glitch. The reason for the glitch remained a mystery at the time because the company's spokesperson couldn't be reached by the media on her mobile, also seemingly affected by the problem.[20]

The Consumers' Association of Ireland lodged a complaint with the Competition Authority over a loophole used by O2 that allowed it to bombard customers with unwanted text messages.[21]

The telecoms lobby group ALTO criticised O2 Ireland for its decision to quadruple the revenue it generated from calls to the 1850 LoCall number.[22] This is a fixed price, shared cost service[23] used by charities and a number of public service bodies.

The company was criticised for its monthly subscription fees levied on Irish users of the iPhone, as they represented poor value for money when compared with the services available to customers paying similar amounts in the UK.[24] Less than 48 hours after the much hyped launch of Apple's latest model, owners of all phones on the O2 network discovered they could not access the internet at all due to a network failure.[25] Further criticism came from iPhone customers regarding the continued failure of O2 to deploy Visual Voicemail. O2 was the only carrier in the world to launch the original iPhone without Visual Voicemail, one of its headline features.[26]

O2 was responsible for the highest number of registered judgments, which financially blacklists those people who do not pay their bills on time in August 2008.[27]

The Advertising Standards Authority upheld complaints concerning advertisements by O2.[28][29]

In August 2010, O2 was warned by the telecoms watchdog, ComReg, that it could not move customers to online billing without their explicit agreement.[30]

In March 2011, O2 pleaded guilty to a breach of the Data Protection Act at the Dublin District Court.[31]

In March 2011, it was revealed that Denis O'Brien made payments to the Minister for Communications, Michael Lowry, to aid Esat Digifone's licence bid.[32]

See also

References

  1. ↑ Kennedy, John (1 February 2012). "Telefónica launches mobile network for youth market". Silicon Republic.
  2. ↑ "Hutchison Whampoa". O2. 31 December 2009. Archived from the original on 28 March 2010. Retrieved 18 April 2010.
  3. ↑ Mulligan, John. "3 Ireland network fails on day of €780m O2 deal". Irish Independent. Retrieved 24 June 2013.
  4. ↑ "Three and O2 are combining". Hutchison 3G. Archived from the original on 6 December 2014. Retrieved 30 November 2014.
  5. ↑ Webb, Nick (20 January 2008). "Revealed: how mobile firms have shafted you". Irish Independent. Retrieved 18 April 2010.
  6. ↑ "O2 and Vodafone to share network infrastructure", The Independent, Monday 23 March 2009.
  7. ↑ “O2 Ireland &Eircom in network sharing deal”, RTÉ News, Wednesday, 06 April 2011.
  8. ↑ "Three buys O2 and will now control 40 per cent of Ireland's mobile market". Business ETC. 24 June 2013. Retrieved 24 June 2013.
  9. ↑ "Telefonica agrees the sale of its operating business in Ireland to Hutchison Whampoa for 850 million euros". Telefónica. 24 June 2013. Retrieved 24 June 2013.
  10. ↑ "Telefónica today confirmed that it has reached agreement to sell its 100% stake in Telefónica Ireland... to Hutchison Whampoa" (PDF) (Press release). Telefónica Ireland. 24 June 2013. Archived from the original (PDF) on 14 July 2014.
  11. ↑ Ryan, Emmet (9 July 2007). "O2 unveils mobile broadband offering". Electric News Network. Archived from the original on 19 May 2011. Retrieved 18 April 2010.
  12. ↑ "Corporate Sponsors - O2". Irish Autism Action. 2009. Archived from the original on 4 July 2011. Retrieved 18 April 2010.
  13. ↑ Reddan, Fiona (27 June 2008). "Aisling Foundation is going global". Irish Times.
  14. ↑ "The O2 Ability Awards". RTÉ One. 10 May 2010. Archived from the original on 19 September 2012.
  15. ↑ "New Telefonica/02 chief executive". Irish Examiner. 23 September 2011. Retrieved 10 August 2012.
  16. ↑ "O2 Ireland overcharges further 71,000 customers". The Irish Times. 16 July 2004. Retrieved 18 April 2010.
  17. ↑ White, Dan (29 January 2006). "The €300m mobile rip-off". Irish Independent. Retrieved 18 April 2010.
  18. ↑ Lowe, David (24 January 2005). "O2 and Vodafone 'may face huge fines'". Irish Independent. Retrieved 18 April 2010.
  19. ↑ Kennedy, John (31 May 2007). "O2 to outsource network management". Silicon Republic. Archived from the original on 17 November 2007. Retrieved 18 April 2010.
  20. ↑ "No winner of €2m jackpot". Irish Independent. 7 June 2007. Retrieved 18 April 2010.
  21. ↑ Bray, Alison (28 November 2007). "Watchdog to complain over O2 text reminders". Irish Independent. Retrieved 18 April 2010.
  22. ↑ O'Hora, Ailish (13 April 2007). "EU will slash mobile phone roaming tariffs by 70pc". Irish Independent. Retrieved 18 April 2010.
  23. ↑ "Broadband, mobile broadband and phone number change information". Askcomreg.ie. Retrieved 24 June 2013.
  24. ↑ "RTÉ News: O2 Ireland not planning iPhone price cut". RTÉ News. 16 April 2008. Retrieved 18 April 2010.
  25. ↑ Cunningham, Grainne (14 July 2008). "Network failure hits Apple iPhone owners". Irish Independent. Retrieved 18 April 2010.
  26. ↑ Caolo, Dave (3 February 2008). "O2 Ireland defends high iPhone costs". TUAW.com. Retrieved 18 April 2010.
  27. ↑ Noonan, Laura (18 August 2008). "Record numbers face court for unpaid bills". Irish Independent. Retrieved 18 April 2010.
  28. ↑ Complaint about misleading sales prommotion (Report). Advertising Standards Authority for Ireland. 2008. Bulletin 08/3, Batch 178, Ref AC/0801/0037. Archived from the original on 19 March 2009.
  29. ↑ Complaint about offered deal not honoured (Report). Advertising Standards Authority for Ireland. 2008. Bulletin 08/4, Batch 179, Ref AC/0801/0075. Archived from the original on 19 March 2009.
  30. ↑ "Comreg calls foul on O2's move to billing". The Sunday Business Post. Retrieved 24 June 2013.
  31. ↑ Cunningham, Grainne (22 March 2011). "Top telecoms firms fined for cold-calling customers". Irish Independent.
  32. ↑ McKitterick, David (24 March 2011). "The billionaire Denis O'Brien, the minister Michael Lowry and a deal shocking Ireland". The Independent. London. Retrieved 6 April 2011.
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