EE: a hungry cannibal out to EEat its own children
Lset week saw the curious move to launch "EE" into the already over-branded UK mobile network market. EE is the new name for Everything Everywhere, the joint venture created by the merger of Orange and T-Mobile. EE will be the UK's first 4G network, promising speeds up to 10x faster than current 3G. It will run alongside Orange and T-Mobile, rather than replacing them as rumours I posted on earlier in the year suggested.
Here's why I think this approach is flawed.
Back in 2009 I suggested the best route for the new UK joint venture (JV) between France Telecom's Orange and T-Mobile was to re-brand the whole business as Orange. This would have made life much simpler for consumers, and created focus and economies of scale for the business. Its what joint owner France Telecom did when launching Orange in France to replace three mobile brands, over 10 years ago.
Instead, the JV created Everything Everywhere as the name for a joint network and store chain, with both Orange and T-Mobile carrying on. This was already a bit barmy, adding complexity instead of removing it. Even the company's own CEO, Olaf Swantee, commented that"Everything Everwhere is not a brand, it's a silly name".
And now to make things even worse, EE will become a consumer facing network brand in its own right. Now, the poor old UK consumer has to choose between six different big mobile network brands, each flogging a bewildering range of tariffs (EE, Orange, T-Mobile, 3, Vodafone and O2). Ben Padley, a digital expert, got it right when he said: "This swirling ball of change creates confusion".
And this in a market which most consumers just don't care that much about. Its a low interest category. All most of us care about is getting a cool phone on a network that works and is as cheap as possible. This really hit home to me when a lady in a T-Mobile focus group, when asked what network she was on, replied with complete confidence "I'm on the Nokia network".
UPDATE: thanks to Rob Chapman for adding a comment about his own experience as a T-Mobile customer. This suggests that the launch of EE could be the first step towards moving all Orange and T-Mobile customers to the EE network. If this is the case, then EE ARE focusing, and following exactly the same path as France Telecom did in France: replacing existing brands with a totally new one
2. Fragmenting branding efforts
Launching a new brand should be a last resort for a business, as it adds complexity and fragments resources. When launching a new product or service, in this case 4G, the first option should be to see if an existing brand can stretch.
Steven Day, EE's chief of branding, says that "Trying to stretch these brands (Orange and T-Mobile) into other markets is difficult." I'd love to see the evidence that supports this point, as I see no reason why Orange in particular couldn't launch the 4G service. It used to be a brand associated with innovation (e.g. first to launch text messaging) and a set of positive emotional values, with its slogan "The Future's Bright, The Future's Orange".
3. Starving the core, instead of growing it
The Orange brand has lost its way badly after being bought by France Telecom, as I posted on here, zig-zagging from one obscure campaign to another. But launching 4G six months ahead of the competition would have been a wonderful opportunity to re-launch and rejuvenate the brand. This could have given boosted the brand in the same way being first to launch the iPhone helped O2.
Would people really have said, "Oh no. I'm not having 4G if its on Orange. I don't like that brand"? I don't think so.
But instead, Orange and T-Mobile are being starved of the new technology. They will of course be "cannibalised" by the EE launch. And EE is one hungry cannibal. Its out to eat its own children. EE is inviting Orange and T-Mobile consumers who want the new iPhone 5 on 4G to sign up now on their existing network, and then switch to EE when it launches.
NOTE: if Rob is right and EE will replace T-Mobile and Orange, its still a crying shame to see a once brilliant brand as Orange bite the dust owing to mis-brand management.
In conclusion, branding should be about simplifying life for consumers, and creating focus for companies. Less is more. The launch of EE does the opposite, with the biggest winners the brand identity agencies who have created EE and are now busy billing more for creating all the brand guidelines.
4G could well drive some revenue growth for Everything Everywhere. But the cost may be even weaker Orange and T-Mobile brands. Perhaps this is is a scene setter to then eventually move all these networks' customers to EE?