O2 mulls entering fixed line operations in UK by March

Telefónica O2 UK Ltd (O2), Europe's largest telecommunications company by market capitalisation, has decided to provide fixed-line voice calls for its residential customers in the UK from March, marking a shift in strategy.

"By moving into the fixed line market we are now able to provide our business customers with a genuine end-to-end service which incorporates landline, broadband and hi-speed data as well as the mobile and consultancy services we already offer," Ben Dowd, business sales director for O2 in the UK, said.

O2 is part of Telefonica Europe plc which is a business division of Telefonica SA, the owner of O2 in the UK, Ireland, Slovakia, Germany and the Czech Republic.

The move to bundle fixed-line voice calls with its existing mobile and broadband offerings comes nearly a decade after O2 was demerged from BT Group PLC.

The company, which has about 20.7 million mobile customers and 457,000 fixed broadband customers, will now go head-to-head with BT and Carphone Warehouse Group PLC's TalkTalk Group.

In mobile, O2 is the largest operator in the UK, ahead of Vodafone Group PLC. France Telecom SA's Orange and Deutsche Telekom's T-Mobile plan to merge their UK operations into a joint venture this year to leapfrog O2 as the country's largest mobile operator.