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O2 is Ramping up Add-on Services to Fill the Gap as Traditional Revenues Fall

O2 is ramping up add-on services to fill the gap as traditional revenues fall, network partners have told Mobile.

Welcomm Communications explained to Mobile that O2 is driving digital targets among its dealers, pushing quarterly quotas for add-on software services. The unified comms dealer explained that as it becomes harder to secure traditional revenue streams, the network is being forced to look outside the box and find new ways to differentiate.

Financial director Chris Ruddle said: ‘There is big investment now for wearables and add-on services. People still need mobile services but software add-ons are where networks are looking to cover their gaps as ARPU drops. This is being driven by competitiveness and rising tariffs and so on.

‘O2 has been developing its digital portfolio products and has relationships with Box, MacAfee and Microsoft. As a dealer we also have digital targets that are pushed by the networks, and it’s becoming a differentiation policy from O2. It wants to be perceived as a digital specialist.’

Ruddle’s comments were echoed by fellow O2 partner Activ Technology. MD Ian Gillespie said there is an increased pressure on the business to meet quarterly targets from O2 to sell software services alongside mobile. He explained that while hardware is still important to the business, software is becoming more prevalent as monthly subscriptions bring in constant revenue.

‘The network has introduced a lot of digital products such as MacAfee and Office 365,’ he said, ‘as well as a number of mobile device management products. There’s an increased pressure on us as a dealer to sell those software services. We are given quarterly targets to sell a mixture of products although mobile is still our primary focus.

‘The market still remains hardware driven but software isn’t like the old days anymore where you go and buy a software package – it’s now a monthly subscription and that model is becoming more prevalent, and it’s a way to get a constant revenue stream. Network revenues are going down too, so new areas need to be brought in, and this new technology is one of the areas that works well with mobile.’

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