How are we doing?

We’re delivering the Customer Promise
Great value, no catch The service you deserve Easy to use products and services A network you can rely on

Best range of devices

Best place to shop

People who care

Which means

More customers who are happier and more loyal
Net 702k customers added 3 point increase in CFI Reduction in blended churn

Which results in

A solid set of financials
4% revenue growth 29% Profit margin

How are we delivering the Customer Promise?

Best range of devices

Our Results

The market sees O2 as having the best prepay device range in the market- we’re second on the postpay range. We’re working to improve returns rate and fault rate. Also, we’re working to make sure our own branded devices sit well with other branded devices.

Call to Action

Please use the new web site to provide your views on our O2 device range. You can visit the website through the following link http://mobilereviews.o2.co.uk/userreview/home The knowledge of people in O2 will be really useful in ensuring we continue to choose the right devices. Any issues we know of that are consistent faults in our devices should be mailed to Stuart.Hibberd@O2.com.

consequently. Call to Action If you have your own O2 handset and you have been with us for more than 6 months we also want to thank you for your loyalty. please make sure you opt into our treats programme by calling 2211. We are offering all our amazing deals to upgrading customers as well as new customers and as a result we have happier customers who want to stay longer with us. If you are not an O2 customer why not join us? Call staff accounts on 0800 131211 . blended churn is reducing.How are we delivering the Customer Promise? Great value. no catch Our Results Our customers tell us we offer the best value for money in the market and we see more customers are joining O2 than ever before.

How are we delivering the Customer Promise? Best place to shop Our Results We now have 300 stores. [insert web-link to online form] . Go into a store and give us your insights – follow this link for details. Call to Action Ensure that you provide end to end support for channel focus on i-mode. We’re selling more phones direct but still need to push harder to entice our customers to O2 stores and the O2 website to buy O2 Products.and the mystery shopping in the first half of this year has given us very encouraging results.

Where customers are affected they contact us and we must continue our determination in getting the resolution right first time and touch our customers with a great O2 experience. Accuracy and Advice) and our new systems are actively improving the service experience. it has an Impact on our customers. .but we’ll need to go that extra mile to truly give an outstanding service. Complaints are falling and satisfaction is risingwhich is great news. Access. alongside the 4 A’s (Attitude. Call to Action It is essential that everyone makes it work every time because when we don’t.How are we delivering the Customer Promise? The service you deserve Our Results RFT action plans.

Try out our products and services and let us know what you think.asp . the ease to set up and awareness to increase satisfaction in this area. send us your feedback using Open Voice http://vitalo2.pri/idealbb/default. Call to Action Your phone is so much more than a voice and texting device.How are we delivering the Customer Promise? Easy to use products and services Our Results i-Mode has launched with an impressive range of content providers from day1. Our product satisfaction metrics show we need to improve the ease of use.

We’re looking at monitoring a wide range of metrics across the business to underpin this. Leave your story at Open Voice on http://vitalo2. In January when 200 people from across sites meet at our summit. Call to Action Take part in a better place conversation of your own with one of our trained interviewers.How are we delivering the Customer Promise? People who care Our Results Our Better Place programme is well under way which will eventually touch every person in the company and make O2 a great place to work.asp . Directorates and job roles will explore how to do more of the things that we have heard from you will make O2 a better place.pri/idealbb/default.

Finance and HR . This is alongside our consistent performance in the key ways we measure network performance. we will be giving our CS advisors the ability to access network information Call to Action Our Customer Promise extends beyond Networks. We will work to maintain our No1 position for our Network.How are we delivering the Customer Promise? A network you can rely on Our Results We’ve achieved our highest ever network satisfaction score earlier this year. We will plan and put in place the necessary activity to improve performance and reliability of Billing and Prepay systems as well as extending our customer promise to key systems across Retail. Later this year. Customer Service.

value streams -Ensured O2 UK was first FTSE 100 company to achieve investors in excellence standard .Manage the planning process. coordinating the businesses projections into budgets and forecasts Our Leading KPI’s Controllable EBIT EBITDA Margin % % Calls Relating to Postpay Billing into care Focus areas for H2 -Ensure we deliver our promises internally and externally . benefits review . commercial support and decision making across all functions -Provide financial support to business initiatives and sit as an integral partner on other functions teams -Run pricing forum.Provided structure and controlled decision making directly impacting all 7 elements of the customer promise How we impact the other functions -Execute business reporting. Customers impacted by billing issues has decreased significantly -Involuntary churn reduced due to better credit vetting upfront and in retail stores -Delivered the commercial and finance elements of programmes including the franchise initiative.Momentum fund .Control environment -Custodians of the EBIT and EBITDA margin % (absolute profit and the profit % ) -Reduction seen in calls relating to billing into care .Simplification -Drive for Global Billing Association benchmark standard -Deliver reporting of Retail profitability at store level .Finance Our actions to support the Customer Promise -Driven Billing issues to their lowest ever levels. roadmap provision board.Financial Results .Pricing & decision support . billing issues functional forum.

struggling with work / life balance.g. no catch) How we impact the other functions Strategy team working with the business to outline the TSO and Technology Strategy underpinning the O2 UK Business strategy Business solutions working with the business to drive a collaborative approach to business planning (RPB etc. Year end target achievable through continued focus on planning Projects delivered to quality Quality of delivery continues to achieve target Deliver on Time . doing too much. Templated and small change) and greater value Supported the delivery of the 300th O2 shop & the franchise programme (Best place to shop) Continue to support Customer Service expansion including the 4th call centre (Glasgow). new capability work Drive Benefits Focus Deliver Value In Everything We Do By underpinning the 18 month plan Focussing on less and delivering more Delivering to Time..) Delivery team working closer with their business colleagues to deliver more rapid change (e. still more volatility than expected in a year of “doing less” Employee Engagement “Out and abouts” telling us people are still very busy.TSO Our actions to support the Customer Promise Played a key role in launching i-mode (Best range of devices) Supported the biggest marketing quarterly release ever including O2 Treats & i-mode (Great value. under a lot of pressure to deliver Projects delivered on time Strong positive trend rising from 22% (Apr) to 71% (Sep). of adjustments to settle the Roadmap. On Air in Bury & Correspondence Management Plus over 200 other projects Our Leading KPI’s Roadmap Employee Engage- Focus areas for H2 Deliver to Quality Deliver to Budget Develop great customer insights & strong business relationships Drive more configuration vs. Cost & Quality Strengthen TSO Leadership Teams Focus on situational leadership and personal development & continue to re-energise the TSO team Churn ment Positive trend in all KPI’s Roadmap Churn average throughout the year Being achieved despite no.

Customer Service Our actions to support the Customer Promise • 260 coaches recruited and trained to help increase core customer skills • Commencement of management development/accreditation programmes How we impact the other functions • By delivering great Customer Service we reduce the burden on retention activity and prevent customers from seeking ‘customer service’ elsewhere eg by visiting Retail stores. • 4th site – Glasgow in training • Focus on 4 A’s – Attitude. Accuracy and Advice • Development of ‘On Air’ (voice and data recording) • Delivery of adequate staffing levels Our Leading KPI’s Focus areas for H2 • Right First Time remains our key focus in order to provide customers with the one contact resolution they deserve Right First Time Customers Very Satisfied Customer Service CFI • Increasing service skills to improve on the ‘4 A’s’ • Implementation of ‘On Air’ across all sites •Consolidate and reduce number of knowledge bases from 8 to 2 . Access.

maintained and supported a network that has led to the highest ever Customer Satisfaction rating and the highest ever volumes of voice and data traffic Our Leading KPI’s Call Completion Success rate Focus areas for H2 •Deliver targeted population coverage for 3G Minutes per drop Network CFI •Deliver Railway Coverage and 2G site Improvement Plans •Keep on top of growing capacity demands •Develop plans to deliver 100% targets on prepay and billing activity. • Reliable internal systems and well managed offices help everyone in our business get on with their jobs. Network Design & Engineering Our actions to support the Customer Promise How we impact the other functions • Being the No. . 1 Network has provided Marketing and Sales with a valuable selling point especially in high-user segments. • Improving the performance and reliability of billing and prepay reduces the volume of complaints into Customer Service. We have built.Operations.

Without the right devices delivered at the right time and at the right quantity the whole business is compromised and O2’s ability to trade and retain customers is affected • Delivered Project Amazon (devices feedback and rating website) • Quick to market our devices • Improved stock availability • Reduced the number of pre-launch faults • Improved our O2 branded devices • Brought O2 Asia into the Customer Plan Our Leading KPI’s % Branded devices first to market O2 Branded devices delivery i-Mode device delivery plans on time Focus areas for H2 • Leveraging customer benefit from Project Amazon • Continued focus on i-mode rollout • Delivering beautiful O2 branded device plans • Maintain the focus on quick delivery of devices into marketplace Reduce net returns by £2m Product availability against f/c O2 Asia EBITDA / Revenue .Devices Our actions to support the Customer Promise How we impact the other functions • Devices are one of the key purchase decision factors for the customer.

services and roaming agreements Our Leading KPI’s Delivery of cost benefits to reinvest in the customer promise 57. •Great Value and Best Shops . delivering improved IOT terms . Devices.Procurement and Carrier Services Our actions to support the Customer Promise •Savings delivery of over £30m that can be reinvested in the Customer Promise . We expect this to increase to well over £70m by the end of the year Carrier Services. Implementing eProcurement to facilitate usage of preferred contracts • Integration and utilisation of Traffic Direction tools to improve the roaming experience • Driving more roaming agreements across 2G/3G/GPRS and extending our advantage using Camel. Roaming Experience Extension of our camel roaming agreements. Marketing. Marketing and Products are working together to improve the roaming experience for our customers. eProcurement and contract management to ensure benefits are realised • Benefits realisation . giving a true home from home experience How we impact the other functions O2 Procurement has worked jointly with Technology. Finance and HR to deliver over £30m of benefits whilst ensuring that we do not compromise on service or quality. Operations. TSO.06 Focus areas for H2 54% Benefit Realisation Delivery and implementation of e-sourcing.ensuring we utilise preferred suppliers and negotiated contracts to maximise cost efficiencies across the company.Increased the effectiveness of the retail expansion by reducing fit out costs by 20% and service costs by 25% • The Service and Network You deserve Delivering the best roaming experience for our customers through roaming agreements. through improved propositions.

Development communicated and managed Operational efficiencies through improved legal processes Legal & Regulatory Legal & Regulatory Smart pragmatic legal advice assists delivery of business objectives with minimal legal risk Regulatory advice facilitates better stakeholder relationships Our Leading KPI’s Customer Fraud referrals – green 6/6 Focus areas for H2 Business Continuity Programme Fraud & Security Average fraud cases – green 5/6 Nuisance Call Bureau SLA w/Customer Svc –green 5/6 Fraud & Security Fraud in Customer Services Retail Store Visits Fraud Management System contingency Business Development Wholesale YTD EBITDA tracking ahead of forecast Developing wholesale partners in line with O2 strategy Business Development Tesco Mobile Postpay solution i-mode post launch KPIs and move to BAU Legal & Regulatory Highest quality legal advice. successfully launched Introduction of effective approvals process for i-Mode marketing campaigns Pro-active brand protection (Interim Injunction against Novartis). delivered in a cost effective and timely manner Effectively manage legal risks in context of delivering business results and protect reputation of business Legal & Regulatory Continue to improve business awareness amongst team Develop website as a useful tool for business . Achieved cross company implementation of i-mode – all Business Development Launch of Tesco Mobile “Value” tariff i-mode. Business Development. Consolidation of the Nuisance Call Bureau.Fraud & Security. Health & Safety accreditation (only UK operator with this). comprehensive trademark programme (The O2) Business impacts on other business functions assessed. Business Continuity Programme How we impact the other functions Raising awareness of threats to the wider business Fraud & Security Protecting People and Property Supporting operational units with professional security support. Legal & Regulatory Our actions to support the Customer Promise Fraud & Security O2 stores are a safe place to work & shop.

possible targets being discussed Focus areas for H2 • Recruitment in CS (inc. new Glasgow call centre) & Retail • Development of induction experience • Total reward statements • Talent management centres • EDP modules 4&5 • New HR system • Training and development across functions • FT great place to work award entry • Employee Forum in CS (‘Shared Drive’) . results due out in December • Quarterly temperature check: new initiative.HR Our actions to support the Customer Promise • Recruitment of 1600 people in CS & Retail • New induction and training programmes in Retail & CS • Supporting Franchise in retail • Delivery of Georgia & implementation of a new HR structure • Non manager pay award • APR for managers • Balance programme including introduction of fitbug Most elements of HR delivery affect other functions as elements of our work impacts our people at different levels. We have worked cross functionally specifically on:• Talent management centres • People strategy • Georgia How we impact the other functions Our Leading KPI’s People Who Care • Reflect: 2005 survey underway. run for the 1st time in July.

e.Marketing Our actions to support the Customer Promise Prepay the UK’s first Prepay loyalty scheme – 10% top up back every 3 months Launch of Talkalotmore Consumer Postpay Upgrading customers get the same deals as new customers. wireless festival. We are also building emotional loyalty by letting both customers and O2 people experience our sponsorships i. This plan ensures we have enough touch points with customers before and after launching products. no catches! 50% more mins for life when you take out an 18 month contract Business: 1 call ownership 50% extra for life through indirect channels 100% extra for life in our direct channels Corporate: O2 Goodbye asks our customers to consider the benefit of O2 before they leave How we impact the other functions Maintaining our strong relationships with our own retail stores. Our first customer panel is planned for November. online team and indirect partners to sustain O2’s momentum in a hugely competitive market Working with customer service to understand the impact we have on their operation when we launch new propositions into the market Our commitment to deliver the best customer experience and devices helps TSO to launch new products and services that work well and bill properly from day 1 Aligning our KPI’s with our retention centres incentive scheme has helped us to reach our mutual targets Easy to use Products and Services have a great impact across the business: Brand : For the first time ever we have delivered advertising that only talks to our existing customers. . We also continue to focus on delivering consistency through the line for all our campaign activity Products: Focusing on improving customer experience on existing products and delivering the best experience for future products.

Consumer Product Sat in Q2 was marginally behind Orange but above Vodafone and T-mobile. . • Pulling in all the required resources to deliver the promise.Marketing Our Leading KPI’s Focus areas for H2 In addition to the main KPI’s that underpin “More customers who are Happier and More Loyal” (Net additions. Delivering the Product Promise – including • Socializing the plan and strategy. no catch with: O2 treats – available on both pre and post pay Driving I mode connections which gives our customer fast internet access and great content Best for Business unlimited free on net calls and improvements to SME Care Driving data usage across all of the segments ARPU Brand Consideration Product Sat Consumer Product Sat Business Average revenues generated per customer The brand our customers want to be associated with We are working on making our products easier to use. CFI and Churn) We also pay close attention to: Continue to give our customers great value. • Re-defining the way we deliver products. There has been a slight rise in overall satisfaction with business products in Q2 2005. This will also require aligning our processes with the rest of the business.

grow proportion of business and corporate sales reaching silver accreditation Direct sales ratio on target . Direct connections and upgrades .ahead of plan O2 Sales academy .O2 Retail growth in upgrades How we impact the other functions Deliver best channel experience through direct channels and indirect channel partners to reduce impact on Customer Service Consistent Account Management experience reduces churn Our Leading KPI’s Mystery Shopping Index – ahead of target for 1st half Focus areas for H2 O2 Retail store roll-out programme Opening first O2 Retail Franchise pilot stores.Sales & Retail Our actions to support the Customer Promise In addition to ‘Best Place To Shop’ we support other elements of the Customer Plan: Mystery Shopping and Account Management supporting ‘the service you deserve’ ‘Great value. no catch’ .

Through a wide range of risk & issue management. Experience Maintain an open two-way dialogue with each workstream in order to keep close track of key metrics.Customer Director Our actions to support the Customer Promise Better Place The programme exists to make this a great place to work. along with it’s temperature checks which will tell us whether we’re making a difference. Our Leading KPIs Better Place There are a wide range of metrics in place to ensure that we’re making a difference. driving plans to underpin the strategy of “more customers who are happier and more loyal” Experience O2 Tracking a wide range of over 100 metrics underpinning the Customer Promise to monitor whether we are making a difference to the customer experience. Constantly reviewing customer satisfaction results and customer insight. we’ve started to make a positive change to the end-to-end experience.and. stories and opinions that we’ll collect and bring to our January summit. Focus areas for H2 Better Place Through H2. the programme will carry out more and more AI interviews. we’ll also look to staff retention and presence to see whether people are reacting to the positive changes made around O2. planning and communication. in turn. In addition. Each interviews gives us insights. making O2 a better place will touch every person in O2.deliver the “people who care” part of the customer promise This programme is working cross-functionally to understand what our customers truly want and how we can deliver this in the most efficient way How we impact the other functions Better Place Over time. O2 major plans / milestones. key risks and issues. Value Streams will focus on delivery of the phase 1 solutions and will start the next wave of Value Streams Plan to continue in delivering the customer promise through H2. Experience O2 . We will track key metrics like Reflect. the AI effect is clearly visible. stories are taking hold and we’re already seeing a difference. Value Streams Tracking a wide range of metrics to derive a “RAG status” for delivery of the phase 1 solutions Value Streams In H2. Value Streams Value Streams Helping the business to move from a silo’d way of thinking to one that is joined up with a culture of continuous improvement Experience O2 Experience O2 has been the backbone of promise delivery in O2.