Mark Ritson: Why BT must kill off the EE brand

If regulators approve BT’s acquisition of mobile network EE later this month it will create a headache for the executives who must decide the future of two strong brands, however there is only one sensible outcome.

Ritson award winner

Crikey! The year is barely a week old and already we have one of the biggest British branding conundrums of recent years in front of us. I speak, of course, of the imminent £12.5bn acquisition of EE by BT. Simple transaction value makes it an enormous deal, but add in the strategic consequences of Britain’s biggest 4G player merging with the country’s leading superfast broadband supplier and the implications are huge.

The branding decision could not be much bigger either. Despite, or perhaps because of, the obvious strategic synergies of blending broadband with 4G the deal has resulted in an unfortunate branding surfeit. BT offers mobile phone services as well as broadband, and EE offers both too.

An idiot would simply suggest that the new company runs both brands side by side or uses BT for broadband and EE for mobile. But the costs of this dual execution combined with the lack of corporate focus would leave BT significantly vulnerable to competitors over the long haul.

There are plenty of precedents in the telecommunications industry to suggest that only one brand will ultimately emerge. Back in 2006 AT&T were thought to have paid $4bn for the Cingular brand as part of the $86bn acquisition of BellSouth.

Despite this outlay, within a year AT&T had begun phasing out Cingular and migrating customers across to their AT&T Mobile offering. Even EE can look back to its own origins, from the UK merger of Orange and T-Mobile and the eventual disappearance of those two titans and their replacement with the EE brand, as evidence of the need to focus.

But which brand? You can make a very strong case for either brand being retained. In fact, let’s make those cases side by side.

Let’s start with the case for EE. First, it’s huge. With more than 24 million mobile customers in the UK it is by far this country’s biggest mobile network brand and more than 100 times bigger in customer terms than BT’s tiny mobile operation.

It’s also a brand that is extremely well managed, at least these days. It was launched back in 2010 with the ridiculous name of Everything Everywhere thanks to the combined efforts of Saatchi and Saatchi and Fallon (stick to the communications stuff guys). Even the incoming CEO thought the name “silly” and it was soon abbreviated to EE by Wolff Olins.

The brand then positioned itself successfully around its new 4G services clearly communicating a brand image of enabling access to superfast network services. The Kevin Bacon ads were, despite much creative derision, a vital way to build both awareness and associations and attracted millions more to the brand.

The fact that Brand Finance valued the EE brand as being worth £4bn last year confirms both the size of the business and the power of its brand. It also means that a significant chunk of the £12.5bn acquisition fee must have been taken up by the intangible asset value of EE’s not inconsiderable brand equity. It would take a brave soul to kill, or even phase out, such a huge asset having just acquired it.

Mobile networks net promoter score
Source: Satmetrix

And yet, if you see things from a BT point of view, that might just be the best option going forward. EE is a big brand but BT is a behemoth of an organisation these days with revenues in excess of £17bn.

While the BT Mobile brand is hardly gigantic at present, insiders might point to the fact that EE has the lowest net promoter score of any of the major mobile networks and suggest that a careful migration of EE’s huge customer base to BT could ultimately prove a positive move for customers – especially if the deal is sweetened with bundled deals on broadband at the same time. Customers prefer one brand and one bill just as much as organisations.

BT Group architecture
Courtesy BT Group

The biggest argument in favour of the BT brand is, however, driven by the existing brand architecture of the company now acquiring EE. One glance at BT Group reveals it to be a ‘branded house, different identity’, all driven by the BT brand (see above). The idea that BT Group would sacrifice the strategic focus and inestimable synergies of this architecture to transform itself into a house of brands in order to accommodate EE in the long term is laughable.

The deal will be confirmed later this month and then, by year’s end, expect EE to be gradually phased into the BT brand and ultimately to become just another short chapter in the history of telecommunications branding. Filed somewhere between Cellnet and Motorola.



There are 22 comments at the moment, we would love to hear your opinion too.

  1. Surely the answer is Orange. Still has great brand awareness and approval (in my experience), albeit heritage stuff. Byword for service and innovation – BT could use that couldn’t they?

    • Gareth Abel 14 Jan 2016

      Very unlikely as they’d have to licence it. Also doesn’t help them to take a step forward and own their own future. Orange continues to thrive in other markets though.

  2. FredB 14 Jan 2016

    I agree that driving towards a single BT brand is a likely outcome. But BT’s current approach to brand architecture is not a reason to ditch the EE brand. That’s like arguing that Apple should drop Beats just because of the way Apple has gone about its branding in the past. Strong brand architecture proponents recognise that, in order to avoid wanton value destruction, strategy and structure need to have flexibility to accommodate the quality of the brand assets that they, sometimes unexpectedly, find themselves with.

  3. Mark, thought provoking stuff as always, fully agree it should be one brand but would question the BT approach;

    Let’s face it branding is ultimately a superficial name game which only works if you actually add real substance to style. However if you link it with a true desire to disrupt a pretty complacent industry, as most big business is nowadays, you may just have a real game changer.

    So I would advocate a completely new brand name that is linked with an approach that stops chasing profits for short term profits sake and actually builds long term sustainable value. Yes a bit of a mad idea, namely put your customers first rather most company people’s belief that is their salary, their share price/dividends and their self centred career that is the priority.

    So a few top of mind examples on how to disrupt the industry.

    1) Link phone contracts to product life-cycles. Yep you may lose a bit of income short term but would potentially gain massively. Apple release a new phone every year yet I have to sign an 18 month contract – go figure!

    2) Truly invest in mobile connectivity. It is quite scandalous that it continues to be virtually impossible to get a decent signal on a train, tube or plane. Maybe I’m being a bit thick but surely better and regular internet access especially in down moments might actually make money?

    Finally just to wrap up maybe an idea re a name for the new company, and fully agree with your dismissal of Everything Everywhere. I thought FACTGACAIC. Yep a bit of a mouth full and sounds like a small Welsh town but far more relevant as a branding approach, namely an acronym that stands for Finally A Company That Gives A Crap About Its Customers. You never know it might just catch on, you never know?

  4. Wozza 14 Jan 2016

    C’mon guys, they’ve obviously missed a trick here, it obviously should be… drum roll… BTEE…

  5. james atkins 14 Jan 2016

    TEE BEE?

  6. Gareth Abel 14 Jan 2016

    Now’s actually a good time to use Everything Everywhere. I agree that it was very vague when first introduced and suffered collateral damage from how difficult it was for everyone (customers, employees, stakeholders) when the Orange & T-Mobile merger took place.

    Everything Everywhere now has real meaning. Industry-leading position on Mobile / Fixed / Broadband and strong growth in TV. Would be a bold step for BT, but that’s what the industry needs. That said customers will need a smoother transition than the previous one.

    • keith_lucas 15 Jan 2016

      Not sure, as a brand name, Everything Everywhere means much more than Anyone Anywhere would? Besides the brand is EE which is pretty anodyne. As an ethos it works rather better.
      Perhaps BT should rebrand using Everything Everywhere as the strapline?

  7. keith_lucas 15 Jan 2016

    I would seriously question the brand valuation of EE, not least when “the average telecoms brand or bank was overstated by almost 400% by the valuation firms”, according to our columnist (April 22). It might have grown in stature but it remains the awkward love child of Orange and T-Mobile (both of whose brands, I suggest, offer more substance and meaning), it is a mask of convenience behind which lies a partnership between uncooperative parents who remain competitors outside the UK. Brands that are skin-deep are rarely sustainable because they ultimately lack integrity and consistency. BT, for all its foibles, stands as a robust basis for an integrated communications platform both in the UK and globally.

  8. Al King 15 Jan 2016

    Happy New Year Mark.

  9. So – we have a state funded monopoly spending £12Bn on purchasing their way back into a market they elected to leave some years ago.

    £12Bn would have gone a very long way to rolling out real fibre optic broadband which would not only close the digital divide but also propel the country to the top of the international leader board in terms of internet access.

    I can’t help but think they have their priorities wrong, and there’s something amiss with “the system” when tax payers are spending billions on BT, but they haven’t yet got the basics right. As the former CTO of BT, Peter Cochrane says, super fast broadband is neither super nor fast (and it’s not fibre optic either).

    This acquisition of EE makes them an even more dominant in the market.

    ps. we have no 4G in this country – it’s LGE, a different thing.

    • I agree, it is disgusting how BT is crippling rural and peripheral areas of the country with their refusal to upgrade their pathetic broadband network. I have a paltry 1meg here in Devon, and am not getting it upgraded despite millions more of public money being given to them by the local authority to do just this. The government needs to intervene urgently. Fast broadband isn’t available in the areas where it has the biggest potential benefit

  10. Jonathan Cahill 18 Jan 2016

    Amused, but not surprised, at the censorship of my comment asking Mark Ritson to make up his mind as to whether brand valuations are valid or not.

    • Samuel Joy 18 Jan 2016

      Hi Jonathan, apologies but we have no record of another comment from yourself on this article in our system. Do you know when it was posted, as this seems like a system error (we certainly haven’t censored it)? Regards, MW

      • Jonathan Cahill 18 Jan 2016

        I think it was Friday. It did appear on the conments at the time.

        That’s why l came to an apparently erroneous conclusion, for which, apologies.
        Sent from my HTC

        —– Reply message —–

        • Samuel Joy 18 Jan 2016

          Hi Jonathan, no need to apologise. Sorry about the message disappearing but thanks for flagging it – may be an issue with the commenting system. Thanks, MW

          • Jonathan Cahill 19 Jan 2016

            Okay. l might as well make the comment. l was perplexed by Mark Ritson quoting brand values as evidence when he had just attended a debate in which he rubbished them. l think he needs to make up his mind.

            It seems to be another example of measurement being taken as reality, something which happens too often in marketing. l think the best comment is “get real” – they don’t!

    • Samuel Joy 18 Jan 2016

      Hi Jonathan, apologies but we have no record of another comment from yourself on this article in our system. Do you know when it was posted, as this seems like a system error (we certainly haven’t censored it)? Regards, MW

  11. Dom Graham 19 Jan 2016

    I really can’t see what the issue is with running both brands – EE’s Broadband service is terrible and BT’s place in the mobile market is non-existent by comparison. Ergo, refocus EE entirely into mobile 4G, moving BT mobile to EE, and likewise BT swallows up the EE broadband customers. Keep two strong brands in the market that benefit from the strength of consolidation, but do not compete with each other. This happens in other industries regularly.

  12. Neil Armstrong 1 Feb 2016

    BT has been multi-brand since acquiring Plusnet. They’ve announced in their Q3 results today that they are retaining the EE band (for now)

  13. Steve 14 Jul 2017

    While i agree that killing off the EE brand would be stupid at the moment because of its following, BT could do this gradually by making their deals better than their EE brand, so eventually making EE a lot less attractive. I wouldn’t be surprised if that’s not how it is going to pan out thus making EE just a company we used to know.

Leave a comment