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O2 and 2e2 form IT and comms joint venture

Microscope contributor

The slow march of mobile operators into the IT services market picked up pace today after carrier O2 and integrator 2e2 lifted the covers off a contractual joint venture.

The 'O2 Unify' business, which launches 2 April, will marry the firms' portfolios under one billing mechanism, including O2's converged products that span fixed, mobile, voice and data with 2e2's IT infrastructure, comms and managed services.

The Slough-based JV will operate a team of 30 full timers hired from within and outside of the two firms, run by Paul Osborne, head of O2's professional and managed services unit. The plan is to increase headcount to 150 within 15 months.

Nick Grossman, business development director at 2e2, said O2 Unify will also market a managed WAN service and plans to roll out other hosted services and solutions based around flexible working.

"We expect this to become a really significant part of our business, [2e2 is] at £430m at the moment and if this goes to plan by the end of next year it could represent around 10% of sales," he told MicroScope.

No separate legal entity has been formed but there is a separate P&L and all profits will be shared between O2 and 2e2, he added.

Grossman said customers wanted suppliers to become one-stop shops and at the same time carriers had reached market saturation point in terms of minutes and lines and were seeking growth opportunities in the "broader IT services" space.

Around 15% of 2e2 revenues come from telcos including O2, Orange, Vodafone and Hutchinson and the JV - while locking out any other similar partnerships for five years - does not prohibit the integrator from continuing those relationships.

In a statement, Ben Dowd, O2 business director said the JV "will see us moving from managing simple data and broadband connections to overseeing complex business applications and communications infrastructures".

The JV would not adversely affect O2's relationship with Azzurri said Martin Flick, director of mobility and converged solutions, and pointed to the telco's track record of working with multiple sales channels both directly and indirectly.

"As O2 move closer into the world of UC we expect that methodology to continue," he said.

The success of mobile operators' expansion beyond network services into the general IT services market is questionable, said TechMarketView managing partner Anthony Miller.

"Let's see if O2 can make a better job of this than its peers," he said.


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