JV sets out pioneer spirit and ‘techno-mix’ strategy

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Everything Everywhere sets up inland network roaming, and explains vision again

The chief protagonists in the UK merger of Orange and T-Mobile said local enterpreneurialism will drive the joint venture and create a kind of ‘techno-mix’ to make good on the promise of its Everything Everywhere brand.

Twelve months after shaking hands on the project, Deutsche Telekom chief executive René Obermann and France Telecom deputy chief Gervais Pellissier said their UK joint venture will run freely of disruptive shareholder intervention.

Obermann said: “It will not be driven by Bonn; it is not going to be line-item managed by the shareholders. It will be driven by the local management, as it should be.”

Pellissier sounded less standoffish, but portrayed France Telecom’s role as supporter of its UK management, rather than as meddler in local affairs.

“This is a solution that will be managed neither by Bonn, nor Paris, but with support from shareholders – because, clearly, these are big companies and this is a global industry, so you cannot just act on a country basis. There will be a mix between support and autonomy,” Pellissier said.

Flanked also by Everything Everywhere chairman and Deustche Telekom chief financial officer Tim Höttges and Everything Everywhere chief financial officer Richard Moat, the company’s chief executive Tom Alexander (pictured) used the occasion of the project’s first anniversary to announce inland roaming between Orange’s and T-Mobile’s networks, the first major consumer benefit of the merger.

From October 5, customers of both will be able to roam between the networks for voice calls, according to best signal.

Customers will be required to opt-in to the service as it works out final issues with certain of 1,600 handsets on its base, most notably the BlackBerry Bold.

But, from next year, it will be available as standard, and coverage will also switch in-call. 3G data roaming will be available in the first half of next year, and the service will be rolled out to MVNO partners, including Virgin Mobile, thereafter.

The October trial will be attended by a national marketing campaign, with adjacent adverts carrying a “dialogue” about shared coverage between the Orange and T-Mobile brands.

T-Mobile’s 50 per cent stake in the MBNL network-sharing joint venture with Three UK, meanwhile, transfers directly to Everything Everywhere,  and will see its operator brands share around 15,000 3G sites with Three.

Alexander explained the brand concept in terms of network coverage. “The UK has forgotten and left behind some basics – coverage for voice calls and data is really important. People talk about it down the pub, about which networks work. We are not doing enough or talking enough about it as an industry.

“T-Mobile and Orange have both invested hugely in 3G over the years; we’ve got very mature networks, better than our competitors in 3G. Delivering this ‘everywhere’, this multi-network coverage enhancement, is a major step-change. Together, we have much much better networks than our competitors’. So those little black spots are now covered.”

Alexander also talked up Orange’s HD Voice service, which will be made available to T-Mobile customers next year also.

He said: “The vast majority of new-generation handsets have this capability, but other networks have not invested. HD Voice will become the norm in time, but it is an important part of our quality message now.”

Expanding on the new brand and joint-venture mission, Alexander said: “We need smart network capability not just for customers to roam from Orange to T-Mobile but seamlessly onto multi-networks – fixed to mobile to Wi-Fi hotspots, of which we have 300 already, and will expand. It is our responsibility to the Everything Everywhere vision to make that as seamless as possible.”

Obermann and Pellissier, meanwhile, had some fun with old rivalries and national stereotypes (see below), but echoed Alexander.

Obermann remarked: “We are making major steps into gigabyte and terabyte society – gigabyte connectivity and terabyte consumption. ‘Everything Everywhere’ is how that manifests – customers want instant access to everything, wherever they are.

“And so I support Tom’s statement on the technology mix. We have only scratched the service. The ability for companies like ours to handle traffic and to provide a really good customer experience very much depends on how effectively we handle this  techno mix – that we use UMTS, LTE and Wi-Fi networks, and so on.”

More specific strategic detail is expected from Everything Everywhere at its Investors’ Day on September 28.

Deutsche Telekom CEO René Obermann on autonomy of Everything Everywhere JV with France Telecom:

“Ever since we acquired Mercury One2One, we heard local management in the UK couldn’t do what it thought was right because it was too dominated by Bonn; that there was too much bureaucracy from Germany. And myself, Gervais (see below) and the board are very much of the opinion it has to be a company with a start-up pioneering spirit, with entrepreneurial people led by Tom.

“And Tom has shown he is very entrepreneurial; he has good vision and can deliver on it. So the good news is it is not going to be driven by Bonn; it is not going to be line-item managed by the shareholders. It will be driven by local management. The bad news is there are no more excuses.”

France Telecom (FT) deputy CEO Gervais Pellissier on importance of UK to FT and Deutsche Telekom (DT):

“The simplest tale for FT and DT would have been for this one to sell, that one to sell, both of us to sell to someone else. You know, the UK market looks difficult in terms of margin; you can’t say it isn’t. But we like the UK; it is a nice market in lots of ways. It is the origin of the Orange brand. It is the home of lots of innovation in this industry.

“Strong brands originated and have been successful here – for Telefónica, O2 UK is better than the rest, and for France Telecom, Orange UK was better than the rest for mobile. For Deutsche Telekom, I don’t know, but for at least two of the four operators, it is a good place to be – and I don’t even mention Vodafone, which is also a strong leader clearly.

‘This is an important market; it is not the birthplace of GSM, which is France and Germany, but it has grown here better and faster than those two continental markets. So we both like this market and we have had to find a way to remain in the UK.

“This is a solution that will be managed neither by Paris nor Bonn, but with support from the shareholders – because these are big companies and this is a global industry so you cannot just act on a country basis. This is why there is a mix of support and autonomy.

‘There is a long history between FT and DT. The question is, can we work together? Well, we have for a year, and for longer since we started talking.
And it is thanks to our British colleagues we can work together; you are good middle men.”

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