customer promise

3 point increase in CFI

Which results in

A solid set of financials

Net 702k customers added

More customers who are happier and more loyal

Which means

4% revenue growth 29% Profit margin

Best range of devices

Great value, no

catch

People who care

Easy to use products

and services

The service

you deserve

Best place

to shop

A network you can rely on

Reduction in blended churn

We’re delivering the Customer Promise

How are we doing?

How are we delivering the Customer Promise?

Best range of devices

Call to Action

The market sees O2 as having the best prepay device range in the market- we’re second on the postpay range. We’re working to improve returns rate and fault rate. Also, we’re working to make sure our own branded devices sit well with other branded devices.

Our Results

Please use the new web site to provide your views on our O2 device range. You can visit the website through the following linkhttp://mobilereviews.o2.co.uk/userreview/homeThe knowledge of people in O2 will be really useful in ensuring we continue to choose the right devices. Any issues we know of that are consistent faults in our devices should be mailed to [email protected].

http://mobilereviews.o2.co.uk/userreview/home


Great value, no catch

Call to Action

Our customers tell us we offer the best value for money in the market and we see more customers are joining O2 than ever before. We are offering all our amazing deals to upgrading customers as well as new customers and as a result we have happier customers who want to stay longer with us, consequently, blended churn is reducing.

Our Results

If you have your own O2 handset and you have been with us for more than 6 months we also want to thank you for your loyalty, please make sure you opt into our treats programme by calling 2211. If you are not an O2 customer why not join us? Call staff accounts on 0800 131211


Best place to shop

Call to Action

We now have 300 stores- and the mystery shopping in the first half of this year has given us very encouraging results. We’re selling more phones direct but still need to push harder to entice our customers to O2 stores and the O2 website to buy O2 Products.

Our Results

Ensure that you provide end to end support for channel focus on i-mode.Go into a store and give us your insights – follow this link for details, [insert web-link to online form]


The service you deserve

Call to Action

RFT action plans, alongside the 4 A’s (Attitude, Access, Accuracy and Advice) and our new systems are actively improving the service experience- but we’ll need to go that extra mile to truly give an outstanding service. Complaints are falling and satisfaction is rising- which is great news.

Our Results

It is essential that everyone makes it work every time because when we don’t, it has an Impact on our customers. Where customers are affected they contact us and we must continue our determination in getting the resolution right first time and touch our customers with a great O2 experience.


Easy to use products and

services

Call to Action

i-Mode has launched with an impressive range of content providers from day1.Our product satisfaction metrics show we need to improve the ease of use, the ease to set up and awareness to increase satisfaction in this area.

Our Results

Your phone is so much more than a voice and texting device. Try out our products and services and let us know what you think, send us your feedback using Open Voicehttp://vitalo2.pri/idealbb/default.asp


People who care

Call to Action

Our Better Place programme is well under way which will eventually touch every person in the company and make O2 a great place to work.We’re looking at monitoring a wide range of metrics across the business to underpin this.

Our Results

Take part in a better place conversation of your own with one of our trained interviewers. In January when 200 people from across sites meet at our summit. Directorates and job roles will explore how to do more of the things that we have heard from you will make O2 a better place. Leave your story at Open Voice on http://vitalo2.pri/idealbb/default.asp

http://vitalo2.pri/idealbb/default.asp


A network you can rely

on

Call to Action

We’ve achieved our highest ever network satisfaction score earlier this year. This is alongside our consistent performance in the key ways we measure network performance. Later this year, we will be giving our CS advisors the ability to access network information

Our Results

Our Customer Promise extends beyond Networks. We will work to maintain our No1 position for our Network. We will plan and put in place the necessary activity to improve performance and reliability of Billing and Prepay systems as well as extending our customer promise to key systems across Retail, Customer Service, Finance and HR

Finance

EBITDA

Margin %

Our actions to support the Customer Promise

Our Leading KPI’s

How we impact the other functions

Focus areas for H2

-Driven Billing issues to their lowest ever levels. Customers impacted by billing issues has decreased significantly

-Involuntary churn reduced due to better credit vetting upfront and in retail stores

-Delivered the commercial and finance elements of programmes including the franchise initiative, value streams

-Ensured O2 UK was first FTSE 100 company to achieve investors in excellence standard

- Provided structure and controlled decision making directly impacting all 7 elements of the customer promise

-Custodians of the EBIT and EBITDA margin % (absolute profit and the profit % )

-Reduction seen in calls relating to billing into care

-Execute business reporting, commercial support and decision making across all functions

-Provide financial support to business initiatives and sit as an integral partner on other functions teams

-Run pricing forum, roadmap provision board, billing issues functional forum, benefits review

- Manage the planning process, coordinating the businesses projections into budgets and forecasts

-Ensure we deliver our promises internally and externally

- Momentum fund

- Control environment

- Pricing & decision support

- Financial Results

- Simplification

-Drive for Global Billing Association benchmark standard

-Deliver reporting of Retail profitability at store level

% Calls Relating to

Postpay Billing into

care

Controllable

EBIT

TSO

Roadmap

Churn


Our Leading KPI’s


Focus areas for H2

Played a key role in launching i-mode (Best range of devices)

Supported the biggest marketing quarterly release ever including O2 Treats & i-mode (Great value, no catch)

Supported the delivery of the 300th O2 shop & the franchise programme (Best place to shop)

Continue to support Customer Service expansion including the 4th call centre (Glasgow), On Air in Bury & Correspondence Management

Plus over 200 other projects

Positive trend in all KPI’sRoadmap Churn average throughout the yearBeing achieved despite no. of adjustments to settle the Roadmap; still more volatility than expected in a year of “doing less”Employee Engagement “Out and abouts” telling us people are still very busy, doing too much, struggling with work / life balance; under a lot of pressure to deliverProjects delivered on timeStrong positive trend rising from 22% (Apr) to 71% (Sep). Year end target achievable through continued focus on planningProjects delivered to qualityQuality of delivery continues to achieve target

Strategy team working with the business to outline the TSO and Technology Strategy underpinning the O2 UK Business strategy

Business solutions working with the business to drive a collaborative approach to business planning (RPB etc..)

Delivery team working closer with their business colleagues to deliver more rapid change (e.g. Templated and small change) and greater value

Develop great customer insights & strong business relationshipsDrive more configuration vs. new capability workDrive Benefits Focus

Deliver Value In Everything We DoBy underpinning the 18 month planFocussing on less and delivering moreDelivering to Time, Cost & Quality

Strengthen TSO Leadership TeamsFocus on situational leadership and personal development & continue to re-energise the TSO team

Employee

Engage-ment

Deliveron

Time

Deliver to

Quality

Deliver to

Budget

Customer Service

Right First Time


Our Leading KPI’s


Focus areas for H2

• 260 coaches recruited and trained to help increase core customer skills

• Commencement of management development/accreditation programmes

• 4th site – Glasgow in training

• Focus on 4 A’s – Attitude, Access, Accuracy and Advice

• Development of ‘On Air’ (voice and data recording)

• Delivery of adequate staffing levels

• By delivering great Customer Service we reduce the burden on retention activity and prevent customers from seeking ‘customer service’ elsewhere eg by visiting Retail stores.

• Right First Time remains our key focus in order to provide customers with the one contact resolution they deserve

• Increasing service skills to improve on the ‘4 A’s’

• Implementation of ‘On Air’ across all sites

•Consolidate and reduce number of knowledge bases from 8 to 2

Customer Service CFI

Customers Very Satisfied

Operations, Network Design & Engineering


Our Leading KPI’s


Focus areas for H2

We have built, maintained and supported a network that has led to the highest ever Customer Satisfaction rating and the highest ever volumes of voice and data traffic

• Being the No. 1 Network has provided Marketing and Sales with a valuable selling point especially in high-user segments.

• Improving the performance and reliability of billing and prepay reduces the volume of complaints into Customer Service.

• Reliable internal systems and well managed offices help everyone in our business get on with their jobs.

•Deliver targeted population coverage for 3G

•Deliver Railway Coverage and 2G site Improvement Plans

•Keep on top of growing capacity demands

•Develop plans to deliver 100% targets on prepay and billing activity.

Call Completion Success

rate

Network CFIMinutes per drop

DevicesOur actions to support the Customer Promise

Our Leading KPI’s


Focus areas for H2

• Delivered Project Amazon (devices feedback and rating website)

• Quick to market our devices

• Improved stock availability

• Reduced the number of pre-launch faults

• Improved our O2 branded devices

• Brought O2 Asia into the Customer Plan

• Devices are one of the key purchase decision factors for the customer. Without the right devices delivered at the right time and at the right quantity the whole business is compromised and O2’s ability to trade and retain customers is affected

O2 Branded devices delivery

i-Mode device delivery plans

on time

Reduce net returns by £2m

Product availability against f/c

O2 Asia EBITDA / Revenue

% Branded devices first to

market

• Leveraging customer benefit from Project Amazon

• Continued focus on i-mode rollout

• Delivering beautiful O2 branded device plans

• Maintain the focus on quick delivery of devices into marketplace

Procurement and Carrier ServicesOur actions to support the Customer Promise

Our Leading KPI’s


Focus areas for H2

•Savings delivery of over £30m that can be reinvested in the Customer Promise .

•Great Value and Best Shops - Increased the effectiveness of the retail expansion by reducing fit out costs by 20% and service costs by 25%

• The Service and Network You deserve - Delivering the best roaming experience for our customers through roaming agreements, giving a true home from home experience

O2 Procurement has worked jointly with Technology, Operations, Devices, Marketing, TSO, Finance and HR to deliver over £30m of benefits whilst ensuring that we do not compromise on service or quality. We expect this to increase to well over £70m by the end of the year

Carrier Services, Marketing and Products are working together to improve the roaming experience for our customers, through improved propositions, services and roaming agreements

• Benefits realisation - ensuring we utilise preferred suppliers and negotiated contracts to maximise cost efficiencies across the company. Implementing e-Procurement to facilitate usage of preferred contracts

• Integration and utilisation of Traffic Direction tools to improve the roaming experience

• Driving more roaming agreements across 2G/3G/GPRS and extending our advantage using Camel.

54%57.06

Roaming Experience

Extension of our camel roaming agreements, delivering improved IOT terms

Delivery of cost benefits to reinvest in the customer promise

Benefit Realisation

Delivery and implementation of e-sourcing, e-Procurement and contract management to ensure

benefits are realised

Fraud & Security, Business Development, Legal & Regulatory


Our Leading KPI’s


Focus areas for H2

Fraud & Security

BusinessDevelopment

Legal &Regulatory

Fraud & Security

BusinessDevelopment

Legal &Regulatory

Fraud & Security

BusinessDevelopment

Legal &Regulatory

Fraud & Security

BusinessDevelopment

Legal &Regulatory

O2 stores are a safe place to work & shop. Health & Safety accreditation (only UK operator with this).Consolidation of the Nuisance Call Bureau,

Business Continuity Programme

Launch of Tesco Mobile “Value” tariff

i-mode; successfully launched

Achieved cross company implementation of i-mode – all impacts on other business functions assessed, communicated and managed

Raising awareness of threats to the wider business

Protecting People and Property

Supporting operational units with professional security support.

Customer Fraud referrals – green 6/6

Average fraud cases – green 5/6

Nuisance Call Bureau SLA w/Customer Svc –green 5/6

Wholesale YTD EBITDA tracking ahead of forecast

Highest quality legal advice, delivered in a cost effective and timely manner

Effectively manage legal risks in context of delivering business results and protect reputation of business

Developing wholesale partners in line with O2 strategy

Tesco Mobile Postpay solution

i-mode post launch KPIs and move to BAU

Business Continuity Programme

Fraud in Customer Services

Retail Store Visits

Fraud Management System contingency

Introduction of effective approvals process for i-Mode marketing campaigns

Pro-active brand protection (Interim Injunction against Novartis); comprehensive trademark programme (The O2)

Operational efficiencies through improved legal processes

Smart pragmatic legal advice assists delivery of business objectives with minimal legal risk

Regulatory advice facilitates better stakeholder relationships

Continue to improve business awareness amongst team

Develop website as a useful tool for business

HR

People Who Care


Our Leading KPI’s


Focus areas for H2

• Recruitment of 1600 people in CS & Retail

• New induction and training programmes in Retail & CS

• Supporting Franchise in retail

• Delivery of Georgia & implementation of a new HR structure

• Non manager pay award

• APR for managers

• Balance programme including introduction of fitbug

• Reflect: 2005 survey underway, results due out in December

• Quarterly temperature check: new initiative, run for the 1st time in July, possible targets being discussed

Most elements of HR delivery affect other functions as elements of our work impacts our people at different levels.

We have worked cross functionally specifically on:-

• Talent management centres

• People strategy

• Georgia

• Recruitment in CS (inc. new Glasgow call centre) & Retail

• Development of induction experience

• Total reward statements

• Talent management centres

• EDP modules 4&5

• New HR system

• Training and development across functions

• FT great place to work award entry

• Employee Forum in CS (‘Shared Drive’)

MarketingOur actions to support the Customer Promise How we impact the other functions

Prepay the UK’s first Prepay loyalty scheme – 10% top up back every 3 months

Launch of Talkalotmore

Consumer Postpay Upgrading customers get the same deals as new customers, no catches!

50% more mins for life when you take out an 18 month contract

Business: 1 call ownership

50% extra for life through indirect channels 100% extra for life in our direct channels

Corporate: O2 Goodbye asks our customers to consider the benefit of O2 before they leaveBrand : For the first time ever we have delivered advertising that only talks to our existing customers. We are also building emotional loyalty by letting both customers and O2 people experience our sponsorships i.e. wireless festival. We also continue to focus on delivering consistency through the line for all our campaign activity

Products: Focusing on improving customer experience on existing products and delivering the best experience for future products. This plan ensures we have enough touch points with customers before and after launching products. Our first customer panel is planned for November.

Maintaining our strong relationships with our own retail stores, online team and indirect partners to sustain O2’s momentum in a hugely competitive market

Working with customer service to understand the impact we have on their operation when we launch new propositions into the market

Our commitment to deliver the best customer experience and devices helps TSO to launch new products and services that work well and bill properly from day 1

Aligning our KPI’s with our retention centres incentive scheme has helped us to reach our mutual targets

Easy to use Products and Services have a great impact across the business:

Marketing

Continue to give our customers great value, no catch with:

O2 treats – available on both pre and post pay

Driving I mode connections which gives our customer fast internet access and great content

Best for Business unlimited free on net calls and improvements to SME Care

Driving data usage across all of the segments

In addition to the main KPI’s that underpin“More customers who are Happier and More Loyal”(Net additions, CFI and Churn) We also pay close attention to:

ARPUBrand

Consideration

Average revenues generated per customer

The brand our customers want to be associated with

Our Leading KPI’s Focus areas for H2

Product Sat - Consumer

Product Sat - Business

We are working on making our productseasier to use. Consumer Product Sat in Q2 was marginally behind Orange but above Vodafone and T-mobile. There has been a slight rise in overall satisfaction with business products in Q2 2005.

Delivering the Product Promise – including

• Socializing the plan and strategy, • Pulling in all the required resources to deliver the promise, • Re-defining the way we deliver products.

This will also require aligning our processes with the rest of the business.

Sales & Retail


Our Leading KPI’s


Focus areas for H2

In addition to ‘Best Place To Shop’ we support other elements of the Customer Plan:

Mystery Shopping and Account Management supporting ‘the service you deserve’

‘Great value, no catch’ - O2 Retail growth in upgrades

Mystery Shopping Index – ahead of target for 1st half

Direct connections and upgrades - ahead of plan

Direct sales ratio on target

Deliver best channel experience through direct channels and indirect channel partners to reduce impact on Customer Service

Consistent Account Management experience reduces churn

O2 Retail store roll-out programme

Opening first O2 Retail Franchise pilot stores.

O2 Sales academy - grow proportion of business and corporate sales reaching silver accreditation

Customer DirectorOur actions to support the Customer Promise

Our Leading KPIs


Focus areas for H2

The programme exists to make this a great place to work- and, in turn- deliver the “people who care” part of the customer promise

Over time, making O2 a better place will touch every person in O2. the AI effect is clearly visible; stories are taking hold and we’re already seeing a difference.

Through H2, the programme will carry out more and more AI interviews. Each interviews gives us insights, stories and opinions that we’ll collect and bring to our January summit.

There are a wide range of metrics in place to ensure that we’re making a difference. We will track key metrics like Reflect, along with it’s temperature checks which will tell us whether we’re making a difference. In addition, we’ll also look to staff retention and presence to see whether people are reacting to the positive changes made around O2.

This programme is working cross-functionally to understand what our customers truly want and how we can deliver this in the most efficient way

Helping the business to move from a silo’d way of thinking to one that is joined up with a culture of continuous improvement

Tracking a wide range of metrics to derive a “RAG status” for delivery of the phase 1 solutions

In H2, Value Streams will focus on delivery of the phase 1 solutions and will start the next wave of Value Streams

Experience O2 has been the backbone of promise delivery in O2. Through a wide range of risk & issue management, planning and communication, we’ve started to make a positive change to the end-to-end experience.

Maintain an open two-way dialogue with each workstream in order to keep close track of key metrics, major plans / milestones, key risks and issues.

Tracking a wide range of over 100 metrics underpinning the Customer Promise to monitor whether we are making a difference to the customer experience.

Plan to continue in delivering the customer promise through H2. Constantly reviewing customer satisfaction results and customer insight, driving plans to underpin the strategy of “more customers who are happier and more loyal”

Better Place

ValueStreams

ExperienceO2

Better Place

ValueStreams

ExperienceO2

Better Place

ValueStreams

ExperienceO2

Better Place

ValueStreams

ExperienceO2

customer promise

Documents