The merger of T-Mobile UK and Orange UK into Everything Everywhere, followed by the launch of the new re-branded EE in September 2012, is an interesting case study in quality-oriented branding in the mobile broadband era. The EE brand is significantly more powerful in the UK today than the separate T-Mobile and Orange brands were prior to the merger.
Does some credit for that probably belong to Ofcom for favoring EE with the opportunity to launch with 4G LTE on day one, before any of the other UK operators? Maybe, but an initial leg up didn't guarantee successful execution of the company's network and brand strategy over the next three and a half years.
Accumulating almost 25 million customers (close to 60% of which are now on 4G), becoming Europe's largest 4G operator, and showing consistent year-on-year improvement in profitability while revenue has flatlined, didn't just happen because of those nice people at Ofcom. Neither did BT's ultimate valuation of £12.5 billion ($18 billion) to acquire the company.
Central to EE's brand-building has been a core theme around the power of its network and the importance of network quality in supporting people in their digital lives. Initially, and most obviously, EE's value proposition revolved around the speed of 4G. Users were wowed at how EE's 4G compared with the comparatively pedestrian 3G speeds of other operators. First to market 4G players elsewhere in the world all enjoyed that same initial lift.
But EE has also maintained consistency in its network investments. Having launched in September 2012 with 2 x 10MHz of 1800MHz spectrum, less than a year later the company began deploying another 2 x 10MHz at 1800MHz. Then at the end of 2014, it began rolling out 4G Carrier Aggregation, combining the existing 20MHz at 1800MHz with an additional 2 x 20MHz at 2.6GHz. Where some 4G operators today are seeing average uplink and downlink speeds deteriorate as their subscriber volumes scale up, EE has made it a key strategic objective not to let those key performance metrics slip back.
The company also has another 2 x 15MHz of 2.6GHz spectrum up its sleeve that may even be turned on later this year, for example for large public events. The primary goal is to maintain current average speeds across more and more users, rather than necessarily increase speeds. And although EE's primary motivation in also rolling out 2 x 5MHz of 800MHz spectrum from later this year is to fulfill its £1 billion ($1.5 billion) contract with the UK's emergency services, regular 4G users will feel additional coverage benefits in indoor and rural areas.
4G data has obviously been central to EE's branding, but voice quality has been given almost as much priority. A year after launching, the company announced a £275 million ($400 million) commitment to driving its dropped call rate down from 0.8% to 0.5%, which is now the European benchmark. Sharing his vision of a mobile network that is "fundamentally defect-free" at a London conference last November, outgoing CEO Olaf Swantee, who oversaw EE's launch through to the sale to BT, stated that the company's dropped call rate now stands at 0.4%.
To reinforce this voice-quality drive, the company launched free voice-over-WiFi (VoWiFi) calling in April 2015. Pitched at providing superior in-building coverage, primarily to ordinary consumers in their homes, EE is reckoned to have more than a million regular VoWiFi users now, and to have carried more than a quarter of a million VoWiFi calls already.
Has EE's execution been flawless over the last three and a half years? Has its brand proved to be immune from the everyday travails and occasional brand-denting snafus of most mobile operators? Not at all. Its performance with respect to customer care continues to be uninspiring, even if is quite a lot better than it was in the first year following the launch alongside the Orange and T-Mobile brands that were kept going.
Ofcom has admonished and fined EE for customer care infringements throughout its life to date. As for its performance in the fixed broadband market, even EE's chief of customer service, Francoise Clemes, admitted in September last year that its broadband customer care has "simply not been good enough."
As a case study in getting everything right all the time, EE doesn't stack up all that well. Then again, who does? But as a case study in taking what advantages are offered you, and running with them to register strong achievements in leveraging network quality for customer growth and improved profitability in mobile services, the EE case study stacks up pretty well -- especially in the broader context of the European market, where inspiration isn't all that easy to find these days.
This blog is sponsored by Huawei.
— Patrick Donegan, Chief Analyst, Heavy Reading