Chief digital officer and sales director leave O2 amid ongoing shake-up

Two senior top brass at UK telecoms outfit O2 have stepped down amid a period of major transition for the mobile operator. A spokesman confirmed that Ben Dowd, sales director, and David Plumb, chief digital officer, have left the business. "We would like to thank them for their hard work over the years with us at Telefónica …

[Alister]

O2 is one of the smaller network operators, holding just 14 per cent of spectrum.

That's a misleading statement, however, as their overall network coverage of the UK is one of the most comprehensive.

Anecdotally, I have had much more reliable signal in diverse areas of the UK using O2 than friends and colleagues on other networks have managed.

[gsf333]

It does seem an odd metric to measure how big a network is. I thought O2 were the second biggest network in the UK by conventional measures.

Normal measurement would be either subscribers and/or profit & turnover.

Seems like measuring the size of a cars fuel tank to ascertain how big the car actually is.

[Anonymous Coward]

It does seem an odd metric to measure how big a network is.

I would guess City analysts are looking at this though, concerned that in some mythical future of hyper-fast universal 4G, the winners will be those with the bandwidth to sling 4K movies to peasants casually watching whilst on the bus. Factor in the madcap ideas sometimes touted for the Internet of Tat, smart homes, smart cities, networked self driving cars and all the other fanciful crap, and you can see WHY they are thinking that, even if you don't agree with them. Note as well that everybody involved benefits financially from a "successful" high priced IPO (except customers, and the new owners). So O2 management's options rise in value, their bonuses for the IPO get bigger, Telefonica stroll off with a bigger bag of cash, the investment banks, lawyers, management consultants and others all take a much bigger slice of cake.

And in the situation of an IPO, it'll be things like that future potential that are bigged up in the prospectus to investors, as this huge unmissable investment opportunity. Come on in! Fill your boots! The water's lovely! Of course, when the new owners throw open the barn doors, they'll be in for a shock at what's inside, and they will also have to sort out the commercial mess made by caning the business for results. Which will be even harder than it is now, because all the multi-billion pound deal costs and acquisition premium will be strung round the new O2's neck like a bloody great albatross.

If you're currently a customer of O2, be prepared to find another network after the IPO, when they need to increase their prices. As an example of the impact of corporate acquisitions on customer prices, take the Liberty Global takeover of Virginmedia: I've seen my bills go up by 10% each of the past three years - I'll bet VM employees haven't been seeing double digit salary increases.

[Anonymous Coward]

IPO impact on management

Is quite simple - the business is being caned for short term results. Nothing else matters, other than putting a shine on business performance, so that when an IPO comes round, the numbers will look interesting. That'll be around a handful of key metrics, like revenue per customer, gross margin, reducing churn, ideally demonstrating some growth in numbers. It doesn't matter if long term investment has been constrained, and the back office is all held together by string and sellotape. Far be it from me to imply that if O2 were a car, management would be filling the noisy gearbox with sawdust, putting gaffer tape on the rusty silencer, and warming the engine up well before every test drive.

Moving those KPI is difficult enough normally, and several are contradictory; eg higher revenues and profits tends to increase churn, building new subscriber numbers usually dilutes profit due to the need for "acquisition pricing". Now think about trying to do all this at the same time as the merged EE is getting into its stride, as you're struggling to roll out 4G, there's ongoing regulatory turbulence in several important respects. I'll wager the sales director's got the shove because the churn or new subscriber numbers aren't good enough to Telefonica, and the CDO got his cards for focusing on what Telefonica thought were the wrong things, perhaps paying too much attention to back office ERP and CIS, maybe data security, when all Telefonica wanted was to slash investment in those whilst throwing a bit of money at customer facing digital portals. I've just left a company doing exactly the same thing (albeit merely chasing profits rather than planning an IPO), and the UK CIO got shown the door precisely because he had a focus on long term value.

[Roland6]

"A replacement for the positions has yet to be found"

Hasn't anyone at O2/Telefonica talked to Three UK; I'm sure they could supply suitable candidates or even provide them as an outsourced service ...

[Anonymous Coward]

Re: "A replacement for the positions has yet to be found"

They're just down the road from each other too.

[Doctor Syntax]

I wonder how much of the BT pensions hole it inherited and how that will affect the IPO. Or maybe there are no ex-BTers left.