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Gabriella: British Tech Wars. In this lesson, we will be talking to you about the top five battles in the field of British technology.
Gina: Yes, these are companies that are directly competing against each other for the same customer base or are developing the same technologies.
Gabriella: Okay, let’s start with competition number 5 – Everything Everywhere vs. O2.
Gina: They are the two biggest mobile phone companies in the UK. Everything Everywhere is a young company as it was only formed in July 2010.
Gabriella: But, it isn’t new to the market, is it?
Gina: Not at all. It was created by the merger of the phone networks Orange and T-Mobile, so when it came into existence in July 2010 it already had a sizeable customer base and was already established, albeit as separate companies.
Gabriella: The merger wasn’t completely smooth though, was it?
Gina: No… some customers had their terms and conditions changed and there were a few legal cases lodged against EE that were mainly resolved out of court.
Gabriella: How many customers does EE have now?
Gina: As of November 2010, EE had around 28 million customers in the UK.
Gabriella: How about O2?
Gina: O2 had about 24 million customers in July 2010 also, so as you can see they are close competitors. O2 was originally part of the larger BT Group and was established in 1995.
Gabriella: There can’t have been many mobile phones around then!
Gina: I don’t imagine so, no! O2 have achieved a high profile in the UK by gaining a number of sponsorship deals, especially with concert venues such as the O2 Arena in London, and they have a working relationship with Vodafone so that the two companies can share each other’s networks.
Gabriella: So is the main reason for competition between the two companies gaining extra customers?
Gina: Mainly. They are also competing to develop future technologies, although both companies have heavily invested in the 4G network as they’ve been awarded 4G contracts by Ofcom, the government authority for communications.
Gabriella: EE already have their 4G network up and running, don’t they?
Gina: Yes, they do. O2 should also have theirs open shortly. I think that the pricing and reliability of their 4G services will be very important in future years.
Gabriella: Okay. Let’s move onto number four – Sage Group vs. SAP. These are both software companies, right?
Gina: Yes. Sage group specialises in enterprise resource planning, or ERP software, which is a software that specifically helps businesses. SAP cover more types of software, but their most successful and well-known software is also an ERP software.
Gabriella: Sage group specialises in small businesses, right?
Gina: It does, but that doesn’t mean it isn’t successful. It’s the third largest company of its type in the world which is an amazing achievement for a company that started out writing software for one accountancy company!
Gabriella: Yeah, that’s quite an expansion! How about SAP?
Gina: SAP had a better start as they were founded in Germany by some ex-IBM engineers. SAP ERP became immensely successful throughout the 80s and 90s.
Gabriella: So they both produce similar software and have both been very successful with it.
Gina: That’s correct. SAP tend to deal with larger businesses than Sage do, however.
Gabriella: Right. Moving on, our third battle is Friends Reunited vs. Facebook.
Gina: Friends Reunited was the first social network to really achieve fame and notoriety in the UK.
Gabriella: Yeah, I remember Friends Reunited. It was created by a husband and wife team, wasn’t it?
Gina: It was. There weren’t really any alternatives when it was launched in July 2000 so in the first 18 months after being launched online it attracted 2.5 million members. It had a subscription service though – after connecting with old school friends or work colleagues you had to pay in order to message them.
Gabriella: It still became very successful though, didn’t it? When ITV bought it in 2005 it had 15 million members and was sold for £120 million.
Gina: Yes, everything was fine until other social networking sites started to appear that had more features and were free.
Gabriella: Like Facebook.
Gina: Yes - Like good old Facebook! It started in February 2004 as a way for students at Harvard University to connect but in September 2006 it was opened to everybody worldwide. As of March 2013, Facebook claims to have 1.1 billion active users a month.
Gabriella: And Friends Reunited…
Gina: Well, in December 2011 the current owners valued Friends Reunited at £5.2 million.
Gabriella: That’s a big drop from the £120 million ITV paid for it.
Gina: And peanuts compared to the $104 billion that Facebook is valued at.
Gabriella: Wow. Our next corporate battle is ARM Holdings vs. Intel.
Gina: ARM Holdings is a company that specialises in developing processors for electronics. It is especially popular in the field of mobile phones.
Gabriella: Yes, 90% of all mobile phones have ARM technology inside, don’t they?
Gina: That’s right. ARM processors are known for having a low electricity consumption, so they’re ideal for mobile phones and other portable devices.
Gabriella: ARM has an interesting business model, don’t you think? They license their technology to other companies.
Gina: Yeah. ARM don’t really manufacture their own processors. Instead they develop the technology and allow other companies to make their processors using ARM technology.
Gabriella: How about IBM?
Gina: IBM also make processors and during the 1990s became the most popular processors for PCs in the world. But, IBM have seen their business falter recently.
Gabriella: PCs aren’t as popular anymore, are they?
Gina: No. Smartphones and tablets are becoming more popular so that’s bad news for IBM but good news for ARM.
Gabriella: What are IBM doing about this?
Gina: They’ve partnered with Google in order to make processors for the Android 2.3 platform, so they’re trying to move into ARM’s smartphone territory.
Gabriella: And ARM?
Gina: They’ve developed processors for Windows 8, and are predicted to have a PC market share of 23% by 2015.
Gabriella: The two companies are trying to take each other’s business.
Gina: Yes. And what makes it even better is that some of IBM’s processors use ARM technology, so really, ARM win either way.
Gabriella: They certainly do! So let’s finish now with company battle number 1 – BskyB vs. Virgin Media.
Gina: Most of the battles we’ve talked about so far have just been a case of two companies competing in the same area. There’s been no real animosity or anger between the companies but this one, battle number 1, became personal.
Gabriella: Sounds like a film! And that is fitting, as they are both, amongst other things, providers of pay TV services.
Gina: Yeah. BSkyB are a satellite TV provider whereas Virgin Media are a fixed provider and deliver their services via cable.
Gabriella: How many customers do the two companies have?
Gina: BSkyB lead the way with 10 million subscribers as of June 2012. Virgin Media are lagging behind with 4.8 million as of December 2011.
Gabriella: So, what about this personal battle?
Gina: Well, BSkyB have their own channels and Virgin Media also have their own channels. The two companies had a deal that meant that BSkyB channels would be shown on Virgin, and vice versa. But, when it came to renegotiate the payment for the channels, things went a bit wrong.
Gabriella: Ah, I remember this. Virgin complained that BSkyB had increased the prices of their channels too much and it resulted in the BSkyB channels being pulled from Virgin, right?
Gina: Yes. The dispute ran for 21 months and both companies initiated High Court proceedings against each other. Eventually it was all sorted out and the channels returned to both providers.
Gabriella: They are still competing for customers though, for both their pay TV services and other services such as broadband and home phone services.
Gina: Yes. It’s good to have some competition in the pay TV services area!
Gabriella: I agree! So that was our top five battles in British technology.


Gina: Thank you for listening, everyone, and we’ll see you next time.
Gabriella: See you! Bye!