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02 faces bill for network failure

The O2 phone network is facing a substantial bill for compensation, after nearly 8 million customers were affected by a massive network failure. Faulty software led to a 24 hour communication blackout across the UK and Ireland.

With mobile companies battling for a share of the growing smartphone market, and the Olympics just days away, the 02 failure comes at the worst possible time. It represents a considerable embarrassment and commercial disaster for the company, which is the UK’s second largest UK mobile phone network, with the motto "we’re better connected."

One operator told The Guardian that roughly 200 000 calls to 02 phones were failing every half hour during the outage. Telecom regulator Ofcom will launch an investigation into the failure. "We have been in contact with O2 throughout the outage," an Ofcom spokesman said, "and we will be discussing it further to fully understand what happened."

O2’s chief executive Ronan Dunne apologised to customers. "We reckon that about a third of our customers were potentially impacted," he told Sky News, "and as a service provider we absolutely want to make up for the service they didn't get." Asked if he was embarrassed by the failure Dunne said, "Yes, I am. I am a customer myself."

That’s hardly a revelation. It would have been even more embarrassing if the 02 chief executive had a mobile contract with Orange or T-Mobile. Dunne didn’t specify the compensation that 02 would offer, but it is likely to involve a period of free calls rather than cash refunds.

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