Michael Garwood says the recent announcements made by the operator provide it something it has struggled to do previously – take market share from rivals
Oh to be a fly on the wall at O2 and Vodafone this week.
Despite their appeals to Ofcom, their rival Everything Everywhere has become the first UK operator to launch a 4G network – and the news didn’t break quietly either.
Up until that moment, the combination of the number 4 and the letter G would have been largely alien to the UK public, but the breaking news headlines which introduced reports online and on TV will have left the public in little doubt that the launch of 4G is a big deal for the UK – and the technology is only available on one network.
This could be a defining moment for Everything Everywhere, which has now been rebranded as EE. The T-Mobile and Orange joint venture has done little to justify its existence to date – but last week’s announcement has planted its name firmly in the history books and it now has a fantastic opportunity to do something it has struggled to do so far – prise market share from its rivals.
And there is little O2 and Vodafone can do about it. O2 said last week it is in discussions with Ofcom and the government to speed up the process of the 4G auction, which is set to take place in January, declaring it in the public interest to do so. And it has a point.
Because should this fail, O2 anticipates – and presumably the same goes for Vodafone – it will not join the 4G party until at least the summer of 2013, thus giving EE a potential 10- or 11-month
And this comes during a period when handset upgrades are at their peak. Carphone Warehouse announced last week it has seen a significant number of customers put their upgrade on hold as they wait for news about the iPhone 5.
In previous years this has been a key period for the likes of O2, which held the exclusive on the original iPhone back in 2007 and still claims to have the largest iPhone base in the country.
The only difference is this time around the latest iPhone is compatible with 4G – and only one network can fulfil its potential at present.
Much will depend on how EE pushes this fact. Customers will need to be educated if they are to capitalise. 4G will be available at launch in four cities – London, Birmingham, Cardiff and Bristol – all areas of the country in which Orange has always had a significant customer base.
Interestingly, EE says it will have a third of the UK population (20 million people) covered by 4G by the end of the year, 70 per cent by the end of 2012 and 98 per cent by the end of 2014.
O2 and Vodafone said back in June, following the announcement of a network equipment share deal, they expect to have 98 per cent 2G and 3G coverage by 2015. The length of time before they can deploy the same statistics on 4G will be critical.
EE cannot afford to sit back – and the suggestion is it won’t. It is taking dramatic, if not drastic, measures to ensure its new EE branding is well recognised.
It plans to rebrand its entire 700 plus retail base in the coming weeks – with personnel at the firm claiming this will be done largely overnight – rather than being a long-drawn-out process – at a cost of £50 million.
It would be interesting to know just how much money EE has now wasted on the 32 impressive Everything Everywhere-branded retail stores that have been rolled out over the past 18 months or so.
With each new store set to be rebadged and recoloured yellow and green (“aqua”), it is difficult to see what they can actually salvage.
And that prompts another question. What will happen to the stores? The official line from EE is no stores will be cut. But this is hard to believe. Even in a world where Starbucks coffee shops are found on every corner, it’s hard to imagine EE stores being placed – as in some instances on the high street – next door to one another.
Time will tell, but it would be a bigger waste of money if they went ahead and later decided duplication was not a good business plan. But it would undoubtedly save vast sums of money in staff and store rental costs – as it has done internally, with thousand of jobs cut when the JV gathered pace.
Back then the industry wondered whether the Orange and T-Mobile brands would be kept, which they have been. But they are surely on borrowed time in the UK now. Any customers wishing to have access to 4G can only do so by switching to the EE tariff – something they will surely do in their droves.
Everywhere Everywhere needed something above and beyond two-for-one cinema tickets to draw customers to its network. With 4G in its armoury it has it.