With the launch of EE TV, James Pearce says the operator has proven it is one step ahead of its rivals in the innovation stakes
Rival operators better peel their eyes: the launch of EE TV has once again highlighted EE’s dominant position as the leading firm in the mobile telecoms industry.
Already the UK’s biggest network with more than 25 million mobile customers and 31 million across all services as of Q2, EE has expanded services into television by offering more than 70 channels and on-demand and catch-up services, shaking up the telecoms market in the process.
Quad-play – the bundling of mobile, broadband, TV and wireless services – isn’t a new concept, with Virgin Media already offering a quadruple play bundle, which launched in May. Virgin also makes a lot of noise about cross-selling between customer bases. Within its Q2 results, it revealed quad-play penetration has increased to 16.7 per cent from 16.1 per cent a year ago. The potential is there.
EE’s decision to release a TV offering gives it a framework to enter a quad -play market which analysts Ovum expects to grow.
Global figures from Ovum predict quad-play bundles to be the fastest-growing bundle type, rising from nine million subscriptions in 2013 to almost 46 million by 2019, a 31 per cent compound annual growth rate. The analysts claim Western Europe will see particularly strong growth, as incumbents leverage their mobile assets in response to increasing triple-play penetration.
Those figures show why the TV market is so enticing for EE and its rivals, and also why fixed line players like BT have been working on bringing a consumer mobile strategy to market.
That competition does provide a major stumbling block for the operator. BT already offers an established TV package that includes BT Sport, putting it in direct competition with BSkyB. Virgin and TalkTalk also offer a range of services that include TV, broadband and landlines.
But EE’s key competitors in the mobile market offer a lot less in terms of TV content. Vodafone has inclusive access to Netflix, Sky Sports Mobile or Spotify free for the first six months as part of it’s Vodafone Red 4G tariffs – but these are add-ons rather than a separate product or service
EE is offering a set-top box in a television market that is already highly saturated, with Freeview on most TVs already providing 70 channels. Smart TVs also give people access to online content, including catch-up TV and online-based apps like YouTube.
These are all features of EE TV that are already widely available, raising a question as to why consumers would choose EE’s offering over rival TV services.
The addition of technology that allows you to use your mobile phone as a remote control is neat, but not world-changing.
However, EE offering the service free to broadband customers is key, as it makes its broadband package more enticing. Broadband is an area that EE has managed to really turn around in the last year. In Q2 2014, the firm had 775,000 broadband customers, an increase of 71,000 from Q2 2013, after three years of falling subscriber numbers.
In a Q&A with Mobile News, EE chief marketing officer Pippa Dunn said the operator had set its sights on the 40 per cent of homes which use Freeview services and sees EE TV as a way of increasing its Home Broadband footprint. Dunn pointed to the Freeview user interface as a weakness, and said EE’s offering is simpler.
The ability to share content across multiple devices also makes sense, as EE can push the idea of an integrated service to mobile and broadband customers. This, along with the idea of having one bill for all of these services, help make the proposition more appealing.
EE has once again changed the mobile game. After becoming the first operator to launch 4G in the UK in October 2012 – 10 months ahead of O2 and Vodafone – and the first to offer sharer tariffs across multiple devices, it has again shown it is driving innovation and creativity by offering something brand new to the mobile market.
EE chief executive Olaf Swantee said the firm has provided a “huge wake-up call” to its rivals and it’s difficult not to agree. With EE TV, the operator has really changed the channel.