Overkill in an already flooded market for mobile?
Everything Everywhere has announced the launch of EE, a new brand that will take the company's 4G and fibre services for fixed line broadband out to the public. EE will become the new name of the Everything Everywhere business and its network.
EE will be launched as a new customer brand in coming weeks, standing alongside Orange and T-Mobile in an already crowded UK market.
However, Carrie Pawsey, senior telecoms strategy analyst at Ovum, commented on the benefit of the launch of yet another brand in the mobile market: 'The long term objective of Everything Everywhere has always been to bring the EE brand to the UK market, and therefore the timing is right in that it will be differentiated by being a 4G service.
'For customers wanting a 4G handset and faster network speeds, this will be only available via the EE brand, not on the other two sub brands. This suggests that the long term viability of the legacy brands is limited and we would expect them to retire T-Mobile and Orange in the medium term. This then begs the question why not do it today? It will be expensive to maintain three brands, even if marketing spend is reduced for Orange and T-Mobile, it seems a costly exercise at a time when most operators are looking to reduce costs,' she remarked.
'From a strategic and cost position we cannot see this how sustaining three brands is a long term solution and the quicker the two legacy brands are withdrawn, the better for the business,' continued Pawsey. 'In regards to its fibre services, while the UK market is highly crowded, we think there is still an opportunity for a dominant total communications provider that gives users a fantastic experience whether it's on fixed or mobile and that is where we think EE is going to position itself.'
Although a confusing addition alongside the parent companies, Mark Newman, chief research officer at Informa Telecoms & Media, says EE as a separate brand will work: 'By introducing a dedicated new brand on its 4G network, Everything Everywhere will be able to position EE as its premium service and, it hopes, migrate customers onto the new network. Over a period of time EE will come to be viewed as the service for heavy mobile Internet users while T-Mobile will be the brand for cost conscious prepaid customers and Orange, the brand associated with offers such as Orange Wednesdays.'
Newman commented: 'It's a good time to be launching a new mobile brand in the UK. EE will to all intents and purposes be a new network but crucially, one which has excellent coverage to compete with the existing players. This is what has made it difficult for new operators like 3 in the past. Most importantly, when EE launches later this year it will have at least five devices that work on the 4G network including the best-selling Samsung Galaxy 3.' However, Newman added that EE will have to be careful about over promising on 4G capabilities, particularly because the company has stated its 4G network will only cover 30% of the population by the end of 2012. Those customers on the EE brand will also have access 3G in the UK outside of the 4G cities, and further towns, cities and rural areas will follow rapidly, the company claimed, with 2013 population coverage to reach 70%, with 98% covered by 2014.
Newman noted: 'It will need to strike a balance between extolling the virtues of 4G in terms of speed and latency while, at the same time, continuing to invest in and market its 3G network capability,' he said.
Everything Everywhere also stated it intends to now launch a fixed fibre service to homes and businesses, with fixed line internet speeds typically ten times faster than today's average broadband speeds. This is despite Orange previously having sold off the majority of its fixed fibre service.
Pawsey noted: 'This announcement to launch fibre services has two key implications. The first is that it reinforces the premium EE brand, as fibre will not be available on the Orange brand. Secondly EE is using fixed fibre services to complement 4G mobile. We think EE will offer attractive bundles for customers wishing to take fixed and mobile broadband services together.
'No one in the UK has got quad play right, but interestingly one of the most successful operators at selling fixed and mobile services together is Orange France with its Open product that now has in excess of one million customers,' continued Pawsey. 'While Virgin has a quad play offer and Talk Talk is rumoured to be looking to increase its mobile customer base both of them have relatively insignificant mobile market shares. Similarly Vodafone and O2 also sell fixed broadband, but they aren't aggressive enough to take on the fixed players for a significant fixed broadband market share. Yes, the UK telecoms market is highly crowded, but we think there is still an opportunity for a dominant total communications provider that gives users a fantastic experience whether it's on fixed or mobile and that is where we think EE is going to position itself.'
4G is switched on in London, Bristol, Cardiff and Birmingham now for the company's engineers to begin live testing and systems integration, in readiness for the customer launch.
EE's 2012 launch schedule will see 16 areas of the country connected to 4G by Christmas; the UK's four capitals and twelve other major cities. The 16 cities are London, Edinburgh, Cardiff, Belfast, Birmingham, Bristol, Derby, Glasgow, Hull, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Sheffield and Southampton.
EE confirmed it is to launch the following 4G devices: Samsung Galaxy SIII LTE; Nokia Lumia 920; Nokia Lumia 820; The HTC One XL; Huawei Ascend P1 LTE; Huawei E589 Mobile WiFi; Huawei E392 Mobile Broadband stick.
