O2 is being investigated by the Serious Fraud Office.

Telecoms company O2 is being investigated by the UK’s Serious Fraud Office and has made financial provisions against the potential costs of violations of anti-bribery laws, the company revealed in a financial statement.

O2 said it was co-operating with a government probe and was also conducting its own internal investigation. It did not divulge details of the requests for disclosure made by government officials relating to “possible violations of anti-bribery laws and regulations”.

The Sunday Telegraph newspaper first reported the group was being investigated by the SFO over allegations of irregularities in its relationships with customers.

Rumours about a probe had circulated in the industry since the abrupt departure of two senior executives in 2017. The first mention of an investigation appeared in its accounts in the same year.

Both O2 and the SFO declined to comment. Ofcom, the UK’s telecoms industry regulator, also declined to comment.

In a footnote to its first-quarter accounts, O2 said that while it was not possible to predict the full scope or duration of this matter, it “considers it can make a reliable estimate of the outcome and has made an accrual for this amount for the three-month period ended 31 March 2021”.

However, it made use of a clause in accounting rules to keep the amount of the provision confidential on the grounds that “further disclosure will be seriously prejudicial to future developments”.

The form of words is largely identical to that used in notes to the full-year results of O2 Holdings in previous years, when the UK’s largest mobile network operator was a wholly owned subsidiary of Spain’s Telefónica.

It is now owned by a joint venture held equally by Telefónica and US cable giant Liberty Global after a transaction that completed in June. A new management team led by German chief executive Lutz Schüler is now running the venture.

For much of the mobile phone industry’s history, resellers were a key conduit between networks, handset manufacturers and consumers. They sold handsets and call plans as bundled packages and often had fractious relationships with the big networks.

The administrators of Phones4u, a reseller that collapsed in 2014, have sued several major network operators, alleging they colluded to orchestrate its demise. The operators have denied the allegations.

In recent years, networks have attempted to establish more direct relationships with consumers and have opened high street store networks of their own. O2 and Virgin Media now have a combined 430 stores in the UK.

The popularity of the traditional 24-month contract has also waned, with consumers upgrading less frequently and increasingly opting to buy handsets and call plans separately rather than as a package.

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