The Company Must Tread Carefully to Reduce Confusion Among Newly Acquired Customers
BT has today overcome the final regulatory hurdle in its acquisition of EE, and attention will now turn to how BT will position its mobile services. Central to this is the future of the EE brand.
It seems inevitable that BT will move to replace the EE name, but it shouldn’t rush to do so. EE has benefitted from strong investment to become synonymous with widespread 4G coverage, and awareness continues to improve. A greater priority for BT will be the complex task of reworking back-end and billing systems as it merges the UK’s largest fixed-line and mobile operators, and only then should it start to articulate changes to consumers.
BT will need to tread carefully while it rebrands to reduce confusion among its newly acquired customers. It marks another step in the long journey of subscribers who originally took out a contract with One2One, and follows rebranding of the network to T-Mobile in 2002 before a merger with Orange created the Everything Everywhere and EE monikers. These same customers’ mobile service provider will shortly change names again, this time to BT.
BT’s legacy association with fixed-line services could be a challenge for the company’s mobile ambitions in the consumer market. However, recent stronger promotion of the fledgling BT Mobile offering is helping to address this. A sensible approach for this segment could be to first offer BT products and services in selected EE stores, or to use the EE brand name alongside BT Mobile’s marketing. This would help customers to begin to make an association between the two companies, reminiscent of the way EE brought together the Orange and T-Mobile names a couple of years ago. However, BT might be better advised to rebrand more quickly in enterprise given its already established strong presence in this sector.
The purchase of EE also paves the way for significant high-street rebranding. BT’s lack of a retail presence is its Achilles heel, but converting EE shops will enable it to present and communicate its multiplay service face-to-face. This could give it a major boost as the UK market inevitably evolves to toward offering bundles of mobile, broadband and TV.
However, I still believe EE’s brand name in the UK will outlast O2 despite today’s news. Parent CK Hutchison will look to quickly rebrand O2 as Three should it receive regulatory approval for the planned £10.25 billion acquisition. This would follow a similar approach in Ireland and create advantages of scale and consistency across its European reach.
But O2 clearly possesses a stronger brand in the UK than Three thanks to considerable investment, and won the Marketing Society Brand of the Year award in 2015. Jettisoning the O2 name could be a risky move — in particular, Three must be very careful in assessing the future of O2-branded initiatives like Priority that play a crucial role in its strong customer loyalty.
One thing is clear: UK consumers should be prepared for major changes to mobile providers’ branding and standing over the next couple of years.
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