£11 million bid to beat traffic

Ronan Dunne chief executive of O2
Ronan Dunne chief executive of O2
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Mobile ‘phone services are mushrooming, pushing demand for capacity ever higher. Industrial Editor Bob Rae talked to O2’s chief executive, Ronan Dunne, about how his company was responding.

Mobile phone company O2 is planning an £11 million-plus investment in its Sheffield network in a bid to keep ahead of a dramatic increase in data and internet traffic.

Chief executive Ronan Dunne says data traffic on the Sheffield network has trebled in the last 12 months and shows no sign of slowing down. Meanwhile, new mobile applications will only fuel demand.

“The explosion of Facebook on mobiles, and Twitter and YouTube is driving the growth,” Mr Dunne told Star Business. Viewing a YouTube video is the equivalent of sending 500,000 texts simultaneously.

“Virtually all the growth of Facebook usage is by mobile and 46 per cent of users are on O2. It’s changed the landscape, not just for us as a telecoms company, but in terms of social interaction and behavioural change.

“In the 16 to 24 age group, 50 per cent of people access the internet via their mobile. This year we expect mobiles to pass PCs and be the primary source of connectivity to the internet.

“There has been an explosion of data and multimedia rich data like video, which has required an exponential increase in capacity and that is why we have made the investment.”

Mr Dunne says the availability of fast mobile data networks is leading some companies to change their business model, including mobile companies as they start to exploit smart network technology.

Paying for an increasing range of products and services is becoming possible by mobile.

‘Tap and Go’ credit and debit cards could soon be joined by ‘Tap and Go’ mobile phones, capable of transferring money from a Smartphone’s electronic wallet to a coffee shop’s till.

But, it won’t end there, according to the O2 chief executive. Moves to phase out cheques entirely could see mobile phones used to pay tradesmen, such as domestic plumbers, electricians and builders there and then for repairs.

Mobile data services could also be used for telemedicine – sending medical information from monitors to health professionals, so that patients can be advised or treated in their own home without having to go to see a doctor – or sending data from a ‘smart’ fridge to the local supermarket so that you never run out of essentials.

Wifi connections are also likely to become more freely available at locations like cafes, railway stations and in stores, where customers may increasingly use the camera on their mobile to scan bar codes to get information and compare prices, while the store uses phone data to collect information on customer flow between departments that will help them improve their layout.

Future developments will also include increased use of ‘Geofencing’, using the mobile phone signal to detect when a potential customer is nearby and send them an advertisement or money off voucher.

Phone users would be able to opt out, but Ronan Dunne reckons many will prefer to be included.

“The key is to do it right. You use the customer’s data for their benefit.

“It’s not about spam or junk mail.

“The benefit is that the customer’s loyalty is rewarded,” says Mr Dunne.

Far from seeing it as an intrusion on their privacy, customers love to be recognised, he adds.

Ronan Dunne says Sheffield and Yorkshire is at the heart of O2’s plans for the future, which include ensuring key infrastructure keeps ‘ahead of the curve’ and benefits from the development of smarter networks that allow fixed and mobile phone services to interact and offer customers more sophisticated services in the future.

The company is also joining forces with rivals Vodaphone to share networks.

“Customers want more coverage and capacity, but they are sensitive to the environmental and visual impact of masts, so we are actively cooperating with Vodaphone to ensure that rather than building new masts, we share masts and infrastructure wherever we can.