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Telefonica recruits EA to lure punters with games, deals

O2 might be a bit-pipe, but Telefonica won't be

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Telefonica Digital, the service branch of O2's owner, has signed a content deal with Electronic Arts in the hope of cementing customer relationships with bundled deals.

The contract allows Telefonica Digital to create promotions based around EA games including The Sims, FIFA and Monopoly, with the stated intention of turning the brand into a purchasing destination for any mobile customer, rather than a portal for those on the O2 network.

Telefonica, which operates in the UK under the O2 brand, announced last September that it would be setting up a "digital" division to create and sell content, as opposed to network services. That division is already running VoIP service Jajah, which Telefonica acquired back in 2009, but deals like this one with EA will give it more control over content, and more freedom to create promotional packages.

UK customers, for example, will now get three months of free EA games with their first purchase, something which Telefonica hopes will attract more customers and get some feature phone owners downloading applications. While that's going on, Telefonica will be looking at the numbers with a view to offering more subscription-based gaming, and other packaged offerings.

“By making a differentiated play in this most emotive and immersive entertainment medium we are fostering a much deeper connection with our customers – another significant step in becoming a true aggregator of experiences," says the canned statement, and while the offering is for O2 customers today the plan is clearly to spread beyond that base.

All the network operators are struggling to avoid becoming mere "bit pipes", as the fixed ISPs have largely become, but strategies differ. Telefonica's decision to split its content services from the telco side is to be applauded, though it's not without precedent.

Those with long memories will recall when the content part of O2 – Genie – was based in Hammersmith, while the telco was in the wilds of Slough. Combining the two was culturally difficult; the sharp end of convergence, not to mention the unpopularity of Slough among the Hammersmith staff was immortalised in this video:

O2's Slough site is a lot nicer now, but not nice enough for the core of Telefonica Digital staff, some of whom do remember the Hammersmith days. They're busy moving to their shiny new Regent Street offices in the centre of London. Splitting out the content risks alienating the network staff, which is what happened last time, but content really is a different business which gains little by sharing an office. ®

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