O2 chief on the mobile revolution
As he steers phone giant to a £6billion merger, Ronan Dunne wants more mobile masts to boost his network – but insists we need not fear Big Brother-style anti-terror powers to track our every move
More people access the internet through mobile. We are a de facto mobile society
For many firms the Living Wage means an extra cost which they can’t pass on
PUBLIC opinion has undergone a dramatic shift when it comes to mobile phone masts, according to Ronan Dunne, chief executive of O2 Telefonica UK.
Once everyone was opposed to new masts springing up across the country. Now, he argues, we can’t get enough of them.
‘Five years ago I gave evidence at the Commons Select Committee and at that time the vast majority of MPs who wrote to me about mobile coverage were asking us not to put a mast up because somebody in their community did not want it. Now almost 100 per cent of the MPs who write to me are contacting on behalf of constituents who want better coverage in their area,’ he declares.
The shift reflects the huge growth in mobile phones and smart devices which have become a crucial part of our economy.
And what is more, Dunne argues the Government should start treating the mobile network like part of the national infrastructure, even hinting that subsidies and special powers to install masts would help boost mobile internet access.
‘There is no Government subsidy for mobile broadband of any kind and challengingly, the single biggest difficulty we have in rolling out coverage, is that unlike fixed operators we have no rights of access, we have no special provisions in legislation to allow us to get access to sites, or to allow us to get special arrangements on planning or other things.
‘This is actually more relevant to everybody than fixed because more people access the internet through mobile. We are a de facto mobile society.’
He adds: ‘We’ve been having this conversation for a number of years with Government and we haven’t really come to a satisfactory outcome.’
We are chatting at the Centara Grand Hotel in Bangkok, Thailand, where Dunne was attending the One Young World conference, aimed at galvanising young people to take an active role in world issues.
Security is tight after terror attacks in Paris and with the likes of former UN Secretary-General Kofi Annan and Bob Geldof in attendance. The previous evening, the 52-year-old Irish born Dunne could not resist snapping the famous pair on his own mobile phone. He even shares a stage with Geldof as the outspoken musician calls on young people to use the power of mobile technology responsibly and to stop ‘tweeting bull***t and get real’. Dunne broadly agrees: ‘He doesn’t gild the lily, does he?’
He adds: ‘If you look at YouTube, the joke is usually the fact that you end up watching cat videos. You end up jumping into this sea of information and who knows where you come out, or if you ever come out.’
The serious role of mobile technology and the powers of Government to use it to tackle terrorism are on everyone’s minds, given its role in Paris and Brussels in tracking terror suspects. Dunne admits the powers of surveillance available thanks to companies like his are formidable, but that the public should not fear a mobile Big Brother.
‘We can actually tell from the analytics whether you’re cycling, whether you’re in a car, whether you’re on the train,’ he explains. This, he argues, has real commercial value as statistics drawn from such aggregated information can help in all sorts of issues such as transport planning.
But he is also well aware of the debate about privacy and the UK Government’s new Investigatory Powers Bill, unveiled earlier this month by Home Secretary Theresa May. Dunne says: ‘As operators we currently operate under a whole series of pieces of legislation, in relation to the investigations of crimes, on data retention, and the Communications Act.
‘The idea of the new investigatory powers bill is to codify and consolidate all the disparate legislations in a single place. That in itself is a good thing. It affords transparency both to society but also to us as operators. The position that the Home Secretary has presented is that there’s no intention to significantly change the scope of the powers that are already held.’
The telecoms group is also brushing up against authority over competition. The industry is in the midst of a major consolidation. BT is merging with EE while O2 itself is planning a merger with 3-Group – which would see O2’s parent, Telefonica, sell the mobile company to Three’s parent, the Hong Kong conglomerate CK Hutchison.
Last month, Ofcom’s chief executive Sharon White cast doubt over a potential merger of Three and O2, and said the £6 billion deal would reduce UK operators to three and could mean higher prices. The deal must now be approved by the EU’s competition authorities.
Dunne says: ‘The market is consolidating around us. But O2 and Three are number one and number two for performance from a customer satisfaction point of view. O2 is the least complained about and has the most satisfied customers in the market. I’m very confident that the rationale will be compelling for the European Union when they review.’
Elsewhere Dunne is less at ease with legislation. We speak again once back in the UK and Dunne is mulling the significance of the Chancellor’s Autumn Statement, notably the apprenticeship levy which will raise £3billion by raising a 0.5 per cent tax on company’s payrolls.
For O2 with 21,000 UK staff, the bill is likely to be in excess of £1million a year. Its Spanish parent Telefonica reported profits of more than £2billion last year, so the sum will hardly break the bank, but even so Dunne does wonder about the effect of the levy, coming on top of other Government changes on minimum pay which will be a burden for smaller firms.
‘We don’t use zero hours contracts and we already pay our employees above the minimum wage. But for many companies the introduction of the Living Wage and the introduction of the levy will mean it’s quite an additional cost in an environment where they may not be able to pass that cost on.
‘I think this is where the Chancellor always has to balance that from an economic point of view.
‘Any company might be in a better or worse position than another, but he has to look at it very much in the round of what’s the right balance for the UK plc.’
Dunne has a lot on his plate in the coming month helping win EU approval for the O2-3 merger. After that, however the future is wide open. ‘I’ve said that subject to the EU clearance, I will step down as the CEO of the combined business. At this stage, genuinely, it’s too early to say what else I will do.’