Convergence has been the name of the game in the UK mobile market over the past few years. First there was the marriage of Orange and T-Mobile in 2010, then the bout of merger mania in the first three months of 2015, which included BT’s announcing that it had agreed to buy the EE partnership for £12.5 billion.
Sky and TalkTalk have also just announced their intentions to enhance their mobile ambitions as MVNOs (mobile virtual network operators) on the network of Telefónica’s UK arm O2, which the debt-riddled Spanish telecoms firm decided to sell to the highest bidder earlier this year. Hong Kong conglomerate Whampoa – owner of rival operator Three – was the winning bigger, scooping up the company for £10.5 billion.
Once the handover is complete, Hutchison will control 40% of the UK wireless market, making it the biggest mobile operator in the country. It’s early days for the O2-Three alliance, and the fate of O2’s brand remains to be seen, but one thing is clear: with all this symbiosis and everyone feeding off everyone else, the challenge for operators to think of new strategies to stand out from the crowd and elevate themselves above the competition has never been greater.
While EE has attempted to carve out a name for itself as the fastest and best-quality 4G network, Telefónica UK CIO Brendan O’Rourke has helped steer his company in a different direction.
With speedy 4G becoming the norm, the bottom line has become the services that can be put on top if it – so O2 has set out to challenge cloud-based digital communications apps in the market.
A very different beast
O’Rourke joined as CIO just eight months after the creation of Telefónica Digital – the digital products and services arm created to spearhead O2’s digital growth.
The company’s core competency is, of course, communication, so it is now missioned with bringing together the things it does around this, or over the top of this, into one place.
But O’Rourke recognises that a digital telco is a very different beast from the Googles, Facebooks or even the WhatsApps of this world.
‘They start from a different place, and have different objectives and different types of scale, so we’re not trying to go after Skype and WhatsApp,’ he says. ‘We create opportunity for our customers to enjoy technology and use it in a way that is beneficial to them, so we have a very open approach to how people use technology across our platform and our network.’
A big part of O2’s digital brand involves leveraging the cloud to provide flexible SaaS bundles for small and medium-sized businesses, bringing together products such as Box, Office 365, Evernote and McAfee.
There is also O2’s Just Call Me, a simple over-the-top conference calling app, and TU Go, O2’s answer to Skype, which allows businesses to make calls over Wi-Fi.
‘When we launched our Digital SMB proposition last year, we saw an immediate increased attachment rate in those digital products,’ says O’Rourke. ‘We offer those in a very pick-and-mix, easy-to-choose bundle experience, and it’s worked – we’re one of the fastest-growing partners for Office 365 and McAfee as a result.’
From an IT strategy point of view, underpinning that is a combination of Salesforce, CloudSense and a parallel cloud services broker to create a dynamic, flexible SaaS solution. O2 also uses AWS as a core platform to run its ‘O2 Priority’ customer reward loyalty programme, which allows it to dynamically send location-based messages and offers, driving extra value for customers.
‘There’s always new technology,’ says O’Rourke, ‘but my job as CIO is to look at that tech and say how we can best use this to further our customer experience. ‘So we are quite a big user of Amazon in certain areas where we offer very dynamic services, and it supports the kind of experience that customers want. In my world they’re playing in a commodity space where the winners are always going to be those using tech to deliver the best customer solution.’
Strength in diversity
But in the end, it’s not about technology. In terms of IT strategy, growing new revenue driven by customer experience is O2’s biggest area of focus. A core component of that has been building its IT team, and that is where its dedication to diversity comes in.
One of O2’s core missions has been to identify, support and grow its diversity of talent, particularly female talent, addressing the gender imbalance in IT – not just in the company but in the broader industry. It has set out a series of initiatives targeted at all levels, from schoolchildren and entry-level joiners to senior leaders. The results are most powerfully illustrated by the gender diversity of the IT executive team – three of the six members are women.
‘My senior leadership team has benefited hugely from that diversity over the past year and it is, I believe, something that all IT leaders should strive to achieve,’ says O’Rourke. ‘I joined as a CIO just over two years ago and spent 12 months building a new team. Through that process and making sure we took a balanced approach to bringing in candidates, I saw how it improves the performance of IT incredibly.’
From the ground up
O’Rourke is convinced that IT industry recruiters have to start at the beginning, creating an opportunity for women to enter IT at the first level of their career, so O2 sponsors school events, inspiring girls at those key decision points in their education and involving its own graduates and apprentices to encourage others.
‘It starts in school because if they’re not taking GCSEs, they’re not taking A levels or degrees, and not thinking about joining our industry or applying for our roles,’ says O’Rourke. ‘But you have to continue to provide the kind of support that we do right the way through their career.’
02 has a number of initiatives, including it Talentum programme, which is its overarching initiative for entry-level joiners, and its Rising Star programme, which supports women five years or more into their career, creating boardready people and showing them that they can achieve higher-level management roles.
‘It’s not that women need help – they just need to see that there’s no glass ceiling, and have that path clearly visible to them.’
A skill-rich career
O’Rourke argues that another key to growing the diversity of talent within technology is helping women and girls recognise the widening scope of skills involved.
‘I’ve been in IT since the mid-1980s,’ he says, ‘and when you look at the history of IT, we used to write all our own code, and we used to write our own software. Then the whole 'IT doesn’t matter' Harvard Business Review article came out in 2003, and with it the whole outsourcing, offshoring and cost focus, so a lot of CIOs in that era came from a financial background.’
But now, with the rise of internet winners such as Amazon, Facebook and Google, O’Rourke has observed the beginning of a resurgence. A new wave of technology companies write their own software, and some even build their own hardware. ‘
Businesses are starting to react to that and realise that we do need to control, build and differentiate through technology,’ says O’Rourke. ‘A lot of CIOs these days come from a tech background and have spent more time in the IT side.
They still need the cost management, but when you’re driving differentiation through technology you really need to be more in control, so that means we are looking for a much more diverse set of skills.’
Wearing it well
As 5G comes into effect, the network element will be software-defined and virtualised, so for a mobile operator such as O2 the skill base across IT and networks will also start to merge, with common capabilities needed across both disciplines.
Added to this, looking forward, skills such as cyber security, design and product development will take centre stage. O’Rourke is running a project at the moment with one of O2’s sponsor partners, building wearables in schools.
‘It actually combines elements of software, hardware and design,’ he says. ‘We’re a mobile business, and of course what is a mobile phone if not a combination of hardware, software and design? ‘It’s fundamentally what our customers buy. So we’re trying to close that gap between IT and design technology, and it’s key to encouraging diversity. Girls very often get interested in that design aspect much earlier than they get interested in the technical and coding aspects, and so by creating projects like that we can give teachers tools to deliver their curriculum, make it interesting and deliver a far more diverse approach.’