Report Overview

O2 announces home phone offers

O2’s plan to launch competitively-priced ‘home phone’ offers in March should help sustain its current growth in fixed broadband, but is unlikely on its own to transform O2 into a significant player in UK fixed telecoms.
The company’s fixed line foray is unlikely to reduce its mobile churn significantly, but nor does it look likely to increase it, with any residual net effect muted by the relatively small scale of O2’s fixed business.
Demand for residential fixed telephony is declining gradually, and O2’s play is likely to make life more difficult for some established players, notably TTG, which is relatively dependent on demand from more price-sensitive customers.