easyMobile – did it jump or was it pushed?
On one level it looks simple. TDC, through its majority shareholding in TIH Invest, owns easyMobile UK, licensing the use of the brand from easyGroup. Following poor performance, it has decided to close the operation because it was simply not attracting enough customers. But there is more to this than meets the eye.
With only 80,000 people signing up for an easyMobile SIM in the UK, TDC apparently decided that it was just not worth carrying on. Conversely in Germany, where there were 182,000 customers by September this year, TDC has decided to take total control of the operation. TDC’s German subsidiary Talkline bought the remaining 20% of easyMobile Germany from TIH, and will now call the company callmobile. (easyMobile Netherlands was closed in July, only nine months after operning)
Asked why the company had decided to change the brand name of the German operation, a TDC spokesperson said that it was to give “more flexibility.”
However, at the end of last week easyGroup, which owns the easy brand, had said it was withdrawing the brand license it had granted to TDC because it considered the company “no longer a worthy licensee of the easy brand”.
EasyGroup alleged that since TDC’s purchase by a consortium of private equity houses in January this year, ventures outside of Denmark had been “starved of funding and the management purged”.
Stelios, easyGroup chairman said that his company would also be seeking damages to compensate for “any damage done to the brand in the past or in the future.”
So why did TDC close easyMobile UK? Was it because easyGroup withdrew the brand license? Well plainly that’s the not the whole reason, because TDC has continued in Germany under a different brand name, which it could have done in the UK if it wanted to.
TDC claims that the UK business was simply underperforming. A TDC spokesperson would not say how much of an investment in the business the company has written off. At first when asked if it was a big loss he said, “Er…yeah.” He then said the company had suffered a “small loss”. Pressed further he settled for a plain old “a loss.”
EasyGroup obviously feels the UK business was being starved and was harming its own brand – hence the decision to revoke the license and seek damages.
So where to now? Well, first off, the 80,000 existing easyMobile UKcustomers can transfer to Carphone Warehouse, whose Fresh Mobile services offers similar tariffs to EasyMobile’s, through their existing online account. (By the way, Fresh, formerly a fierce competitor of easyMobile, has had a nice little windfall here.) If customers don’t want to go to Carphone Warehouse they can get their number ported to another operator (“free of charge”) or they can close their account and be reimbursed for any outstanding credit they have with the operator.
As for easyGroup, it says that it will look to get back into the mobile market, with a new partner or partners. Whether it will go down the licensing route again is yet to be seen.
