NSA-Verizon scandal could have a 'huge impact on customers' openness to share', says Telefonica Group CIO

O2 will have to tread carefully with its use of customer data, says Phil Jordan

The National Security Agency's (NSA) collection of telephone records of millions of Verizon customers could have a "huge impact on customers' openness to share", according to Telefonica group CIO Phil Jordan.

In an exclusive interview with Computing, Jordan explained that Telefonica, better known in the UK as O2, is looking at new business models that rely customer insight.

The project, which sits inside the telecoms giant's big data agenda, includes O2 Priority, which allows the company to deliver targeted offers of third-party products to its customers based on their preferences and locations.

"We've been a big data company forever in the sense that we carry a lot of data, with much of it being very sensitive; our customers' billing records, where they are, who they're speaking to, and we've always had a responsibility to protect customers' privacy very seriously, I don't think that anything has changed," Jordan said.

"I guess what we're hoping for is for customers to be willing to share their preferences with us, and that is a very clear decision point for them, and then we can provide value to them," he added.

Mobile operator Verizon has millions of customers in the US and has been required to give the NSA information on all telephone calls in its systems on an "ongoing, daily basis", according to the Guardian.

And Jordan believes that this will have an effect on Telefonica's customer base, as they may be more reluctant to share information.

"Of course it has a bearing. I think for certain segments of our customer base it may have a huge influence on openness to share. I think it's a generational thing. People have different attitudes to sharing information. We have customers who are in their 70s and 80s who are very anxious not to share [personal information] and to think of somebody watching them, and then you have customers in their teens who have a completely different mind-set in the digital world as they have grown up with social networks," he said.

"The important thing is recognising the different attitudes and risk tolerances of our various customers, and for us to tailor products, services and experiences accordingly, because if we put a product in the market that is at one end of the spectrum with those customers, then there is a very real danger that we will disenfranchise segments of our customer base and we can't afford to do that," he added.

Jordan added that it was a path that Telefonica would be "treading really carefully" over the next few years.