…quite ready sometimes, people will say: 'Oh, you're a bit slow coming to market', but if I was asking some of the other network CEOs about what their customer experience has been like on the early adopters on dongles, I'd be interested to know what they said.
The market has very, very high return rates on dongles, which means the industry — and I'm not criticising my competitors — but the industry isn't getting it right.
Does O2 have any plans for a fibre rollout?
We'll keep a watching brief on fibre… There's no doubt that there will be increasing demand for higher speeds from certain segments and we will observe how BT goes about deploying fibre into the UK market and that will be done on a basis that will allow wholesale access to others. The details of exactly how that will be done are a matter of consultation at the moment.
We absolutely have a watching brief on fibre but there also is the potential that existing capability like ADSL2+ can be further enhanced to go even faster than it does today. That's effectively what Virgin is doing at the moment — enhancing the software that means that its existing infrastructure can deliver faster speeds, and I think there's opportunity on ADSL2+ to do that as well. […]
Almost certainly [deploying fibre] will be done in conjunction with key providers in each market so only one or two people at most in any market are likely to deploy fibre. And then almost certainly to make their business model work will provide wholesale access to others.
What's O2's LTE/4G roadmap? What kind of investment do you envisage?
We are, as an organisation in Telefónica, supporters of LTE and we're part of the industry technical streams on that. I think the timing of LTE is outside our current business-plan horizons so I couldn't give you size and scale of the investment numbers just at this moment because, in what I would describe as general commercial deployment, we are still four, five years away.
Going forward, do you see femtocells playing a big role in mobile networks?
We very much see the role of mobile moving into being an integral part of the home — in the whole digital age and the digital home we see the potential for your mobile phone to actually be the remote control of your digital life. The reality may not be quite there yet but it is in part.
When I walk in the door with my iPhone it goes straight onto my Wi-Fi connection at home. If I want to stream my multimedia system that I have at home I can get my iPod music to play out on the speakers that are in the roof in my living room. We're getting very close to a point where the mobile phone and its functionality can be much more a central point to managing the whole digital space and, in that context, I think femtocells potentially have an interesting role to play.
Do you support EC telecoms commissioner Viviane Reding's moves to bring down mobile-roaming costs for European consumers via industry regulation?
I absolutely support increases in [data] usage and I think allowing highly competitive organisations to compete is invariably the best way. All of the evidence of the UK market is that there's loads of competition and that competition has been really good for consumers.
Capacity is there and demand is there and we're seeing huge increases of usage across the whole range of our services, so I think if you leave the market to compete you will find that the market will deliver. I think intervening at either the retail rates — which Viviane Reding does — is almost certainly going to create an artificial position.
The other things I would say in a nascent market like data — and I'm genuinely not having a pop at Viviane Reding because I struggle sometimes with it myself — but understanding the cost dynamics of data is a very complex issue.
A lot of data is being sold in domestic markets at possibly lower than cost and that's not a basis for regulating if, at the end of the day, you want people to continue to invest. We need to invest in LTE and other things and if we've got prices regulated down, the danger is there isn't enough return there for investment.
The other things I would say is much better [is] that we're allowed to be flexible across our portfolio of services, because customers don't just buy one product, they buy a suite of products, and if you take certain products out of the mix and regulate them, then the ability for consumers to benefit from bundling is actually reduced. And [this] won't always benefit the people who are maybe the least financially able in the market — it tends to disadvantage the people who are lower spenders, not higher spenders.
