Overview
The company was formed in 1983 as Telecom Securicor Cellular Radio Limited,[5] a 60:40 joint venture between British Telecom and Securicor led by John Carrington. It launched the Cellnet network on 7 January 1985, six days after the launch of Vodafone.[6] In 1999, BT acquired Securicor's share of Cellnet and the company was later rebranded as BT Cellnet.[7] In June 2000, BT Cellnet launched the world's first commercial General Packet Radio Service (GPRS) service.[8] The company, together with BT Group's mobile telecommunications businesses in Germany, Ireland and the Netherlands, was part of the BT Wireless division. This was spun off from the BT Group in 2002 to form a new holding company, mmO2 plc, which introduced the "O2" brand for the businesses. In 2005, mmO2 plc was renamed O2 plc.[9]
O2 plc was purchased by the Spanish telecommunications company Telefónica in 2006 for £18 billion. Under the terms of the acquisition, Telefónica agreed to retain the "O2" brand and the company's UK headquarters.[10] O2 plc was renamed Telefónica O2 Europe in 2007 and then Telefónica Europe plc in 2008,[11] and became the holding company for Telefónica's operations in the UK.[12]
In May 2020, Telefónica reached an agreement with Liberty Global to merge the company with Virgin Media. On 1 June 2021, O2 and Virgin Media formally merged to create Virgin Media O2 as a joint venture between Telefónica and Liberty Global.[13][14][15]
1985 to 2005
Between 1985 and 1989, John Carrington was the CEO of British Telecom's Mobile Division and the chairman of Cellnet. It was during this period that Carrington launched Cellnet's first cellular service, following innovative development work by BT Spectrum, who built a chain of cells between London Heathrow and BT Tower in January 1985.[16]
Cellnet was established in 1985 as a joint subsidiary of BTCR, British Telecom Cellular Radio, providing the engineering knowledge, and TSCR, Telecom Securicor Cellular Radio Limited, providing the financial investment, resulting in a 60:40 joint venture between British Telecommunications and Securicor.
The equipment used was primarily a Motorola system designed for the American Advanced Mobile Phone System (AMPS) and had to be adapted for the British system, Total Access Communication (TACS). The system was so unready that the initials that Motorola used to designate the network exchanges, EMX, became popularly known as 'European Motorola Experiment' and the exchanges had to be programmed in machine code loaded by tape. In the early days of the system, mobile calls cost £1 per minute.
Telefónica acquisition
On 30 November 2005, O2 agreed to a takeover by Telefónica, a Spanish telecommunications company, for £17.7 billion (£2 per share) in cash. It went through finally in 2006.[21] According to the merger announcement, O2 retained its name and continued to be based in the United Kingdom, keeping both the brand and the management team. The merger became unconditional on 23 January 2006.
Following the acquisition of O2, Telefónica undertook a corporate organisational change that saw the merging of its fixed and mobile businesses in Spain, and the transfer of Telefónica's non-Spanish European telecommunications properties into the O2 brand. Thus, the Český Telecom and Eurotel operations in the Czech Republic as well as the Telefónica Deutschland business in Germany were brought under the control of O2, which retained its UK-registered public company status with its own board of directors and corporate structures and processes. Telefónica chose to keep its existing mobile phone operations in the rest of the world under the brand Movistar. This name is used in Spain and in most of the Latin American countries, operated by a separate management team.
Since 2007
On 15 July 2009, O2 entered the financial services industry with the launch of O2 Money, which was the first step in the process of incorporating financial services into mobile phones. Future plans included manufacturing Near Field Communication (NFC) technology in mobile phones in the United Kingdom.[22]
O2 and Vodafone signed a deal in June 2012 which will see the two companies 'pool' their network technology, creating a single national grid of 18,500 transmitter sites. Both networks will continue to carry their own independent mobile spectrum.[23]
Sale attempts
On 24 November 2014, it was reported that BT were in talks to buy back O2, while at the same time BT confirmed that it was also in talks to buy EE.[24] BT subsequently entered into exclusive talks with EE.[25]
On 23 January 2015, Li Ka-shing, owner of Hutchison Whampoa and the Three network (which operates in the UK) entered talks to buy O2 for up to £10.25bn ($15.4bn). However, the move faced scrutiny from competition regulators as it would reduce the number of major operators in the UK, when combined with a potential purchase of EE by BT, from four to three.[26] Hutchison Whampoa had previously acquired the O2 network from Telefónica in the Republic of Ireland, which it has since merged into Three.[27] The combined network would have surpassed EE to create the largest mobile network in the UK.
On 7 May 2020, it was announced that Telefónica had agreed to merge Telefonica UK with Liberty Global subsidiary Virgin Media, subject to approval, into a 50/50 joint venture. Subject to approval, the merger was slated for the middle of 2021.[33][34] The merger was completed on 1 June 2021 with the newly merged company positioning itself as competition with BT.[35]
Outages
In July 2012, O2 had to apologise to almost 8 million customers after a network switching subsystem failure led to a 24-hour blackout of the service across the UK and Ireland.[36] The problem, which prevented a third of its customers' phones registering on the network, also affected customers of MVNO networks Tesco Mobile and Giffgaff.[37] To apologise for this, O2 announced that it would be giving hundreds of thousands of its customers compensation for the issue.[38] Pay monthly customers received a 10 per cent discount on their bill whereas Pay As You Go users received a 10 per cent refund on their first top up in September.
On 6 December 2018, a major disruption to the O2 network, caused by faulty software, left up to 32 million users (including those on MVNOs) without access to data services (on both 3G and 4G) for up to 24 hours. During the outage, some voice and text services suffered from congestion.[39]
