O2 Holdings Limited SWOT and PESTLE Analysis

Strength

1. One of the largest telecom and entertainment companies in the UK with 45 million + subscribers: While O2 was one of the biggest telecommunication companies in the UK earlier; after its merger with Virgin Media in June 2021, it has become the biggest player in the market. As of the third quarter of 2021, Virgin Media O2 (VMO2) has 47 million UK connections across broadband, mobile, TV and home phone. Their own fixed network currently passes over 15.5 million premises alongside a mobile network that covers 99% of the nation’s population with 4G, and almost 200 towns and cities with 5G services. They employ around 18000 people and have more than 430 retail stores. The company has committed to investing around 10 billion pounds in the UK over the next ten years. Its 5G and gigabit broadband plans have ensured fast future expansion of the company as well.

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Weakness

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Opportunity

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Threat

1. Changing data protection and privacy regulations will require revamped operations: Following Brexit, the UK government invited proposals for its own laws on data protection since EU’s General Data Protection Regulation (GDPR) law was no longer binding on it. The Telecommunications (Security) Bill gives the UK government new powers to boost the security of telecommunication services. With the rise in Internet of Things (IoT), the regulations for security have also increased. The government plans to set a secondary legislative body to delegate defining the actions taken by telecommunication companies. While these rules are set in place to protect public’s privacy, their compliance involve significant costs and work on the behalf of telecommunication companies. Non-compliance of these rules will bear penalties and the company needs to ensure that they adhere to all laws to avoid investigation and run the risk of losing public trust.

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Political

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Economic

1. Recession and inflationary pressures of the pandemic likely to affect consumer spending and economic growth: As a result of the coronavirus pandemic, the UK’s GDP declined 9.7% in 2020. In 2021, the country enforced a third lockdown and saw a rise in Omicron cases. As of October 2021, the GDP was still 0.5% lesser than pre-pandemic levels. In addition to that the country is experiencing unprecedented levels of inflation. It hovered around 5.1% in November 2021 which was a ten year high. Global supply chain issues and rising energy prices contribute to this rise and it’s expected to go up in 2022. Bank of England inflation will hit 7% in April 2022. High inflations will negatively affect household budgets and will even hinder any expected economic growth. In their annual report of 2020, O2 reported that the risk of adverse economic environment affecting their functioning has increased. Tight consumer budgets owed to inflation will curb demand of services offered by O2.

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Social

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Technological

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Legal

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Environmental

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