O2 beats Vodafone to ring up its largest corporate deal with AA

O2, the UK mobile phone company owned by Spain's Telefonica, has won its largest corporate contract after signing up the AA, Britain's largest roadside breakdown service.

Alongside the corporate contract with the AA, O2 will benefit from a commercial agreement to provide a range of "hands free" mobile phone packages to around 4.2 million AA members across Britain.

O2 won the contract from Vodafone following a tender process and trials of its network. O2 declined to quantify the value of the agreement, but such deals are typically multi-million pound contracts.

Competition for large contracts to supply businesses with mobile communications services has increased over the past year as consumer voice tariffs and roaming charges have come down rapidly as a result of competition and regulatory pressure.

O2 will provide around 5,500 voice connections and more than 3,000 data connections to AA service staff across the UK. With more than 5,000 vehicles on the road, the demands on the AA's telecoms supplier are "incredibly exacting when it comes to overall network performance on coverage, resilience and speed", the AA said. The strength of O2's data network was particularly important during the trial, as this is essential to managing work flow across the AA's service fleet. The AA fixes about 80 per cent of UK breakdowns, making the efficient management of its fleet of on-road workers critical to its operations.

O2 will also work with the AA to offer its members "hands free" telecoms services. It is illegal to hold a mobile phone while driving a car in the UK. Drivers who want to take calls while on the road need to buy additional equipment so that calls can be made or received without taking their hands off the wheel.

Unlike other O2 partners such as Tesco and Disney, The AA will not launch a branded mobile phone service. It already offers personal finance services such as motor and home insurance and loans.

Trevor Didcock, the director of information systems at the AA, said: "Creating value and benefits for our members is paramount to our success, and to that end O2 make an excellent partner."