Important note: this experiment lasted for one day. People are known to respond positively to change, regardless of what the change was.
http://www.paulgraham.com/foundersatwork.html
http://www.paulgraham.com/boss.html
The bulk of the programming work in this world was not performed by handsome people in suits or fine cloths at clean desks in fabric covered boxes with serious professional expressions on between the hours of 9 to 5 under the direction and supervision of a non technical manager (with regular staff meetings).
The best programming is on par with performing neurosurgery on humans, we don't put neurosurgeons in a cubicle from 9 to 5 and measure them by how many hours they sat in the surgery room chair. We don't force them to "look busy" in their cubicle after they did a tough operation for 3 hours. A good neurosurgeon has to be on top of his game when he is cutting people. Humans are not on top of their game when they are forced to "look busy" for 8 hours a day.
Have those O2 employees work from home for a whole week and let's see where it goes.
Working in a place where that was required damn near drove me crazy and made me extremely unproductive (since you learn how to look busy and find yourself using your newly acquired skill at every possible opportunity, possibly out of spite). Managers take note - you are shooting yourselves in the foot with such policies.