Year in review 2012: Everything Everywhere morphs into EE, sets the LTE pace
The news: Despite being merged for more than two years, Orange UK and T-Mobile UK still entered 2012 as awkward and clumsy partners. The attempt to rebrand the combined firm as Everything Everywhere had meet with consumer bemusement, and been slammed by its new CEO Olaf Swantee as "a silly name with a stopping effect."
Discussions over what brand name to use for the company were underway, although both parents, France Telecom and Deutsche Telekom, denied suggestions that the Orange and T-Mobile names would be dumped. By late January, Everything Everywhere marketing staff had decided that the two brands would be repositioned with Orange becoming a premium brand and T-Mobile as a low-cost offering.
While this tinkering with names continued, Deutsche Telekom was rumoured in February to be weighing its options to sell its 50 per cent holding in Everything Everywhere, driven by a need to recoup the cash it was intending to receive from the sale of T-Mobile USA to AT&T, which collapsed in December 2011.
Over the next few months, the company forgot about what to label itself and began to use its muscle to proper effect. First, it reported it had boosted core service revenues by over 2 per cent and, critically, gained approval from the UK telecoms regulator Ofcom to reuse its 1800 MHz 2G spectrum for LTE services.
Vodafone said it was surprised Ofcom's decision, claiming that it was concerned that the move had been taken prior to the UK's LTE spectrum auction rules being finalised. Heaping pressure on its rivals, Everything Everywhere said in May it was ready to launch LTE this year (using the refarmed 2G frequencies) but was being hampered by Vodafone and O2 not working to build the necessary ecosystem. The company said it was making the required investment to gain a head-start on it UK rivals, while they have instead focused on improving their 3G networks.
However, in October, Everything Everywhere launched the UK's first LTE service and used the occasion to rebranded itself as EE. EE launched the service in 10 UK cities and priced it 10 to 20 per cent more than its 3G service, albeit with the promise of delivering downlink speeds that are five times faster.
By November, EE's parents were firming up plans for an initial public offering, adding that many private equity firms were interested in acquiring a stake. However, France Telecom CFO Gervais Pellissier hedged on the timing of any IPO, stating that selling a minority stake in EE would depend on the pace at which UK consumers subscribe to the operator's premium-priced LTE service.
Moving up a gear, EE announced in December that its LTE network would be expanded to cover a further 17 towns and cities across the UK by March 2013.
Why it was significant: The ugly ducklings of Orange UK and T-Mobile UK have been transformed into a single company and are outstripping the competition with the rapid launch of LTE. The EE management has demonstrated that merging two culturally different mobile operators can be achieved, albeit at the cost of initial consumer confusion and cutting swathes of employees.
However, the masterstroke EE made this year was in "persuading" Ofcom to refarm its 2G spectrum for LTE use, and thereby gain a huge time-to-market advantage over its rivals. Its joint owners might just have positioned EE for a successful IPO in 2013.
- 2Year in review 2012: Everything Everywhere morphs into EE, sets the LTE pace