Newsbyte talks to … Marc Allera
Marc Allera is CEO, EE
Marc, EE's been part of the BT Group for about 10 months now, how's the integration going?
The integration process is going very well. EE is a powerful business in its own right but the UK is becoming increasingly convergent so we're also a great fit for BT. Several hundred EE people have relocated from our offices in Paddington to new accommodation in BT Centre. And we've begun selling BT products in some EE stores, for example BT Sport.
Do you feel that EE can keep its strong brand?
Yes. EE is an amazing brand and it's not just me that thinks so. We're the number one in the eyes of UK consumers for network. The number one for mobile brand awareness. And equal number one for first choice purchase intent. That's incredible for a brand that is still relatively new on the scene.
We're as powerful as brands in the same space that have been around for decades so that tells me we're doing the right thing. The EE brand is working really hard for the group, as part of our multi-brand strategy.
4G rollout is front and centre of your strategy, is 4G changing people's mobile behaviour?
We already see among 16-34 year olds that the smartphone is the most important device for their online access. Consumers spend more time online on their mobile than they do on their desktop or laptop.
We're seeing the evidence of increased data usage on our network every day. With each new variant of a device, customers are using 20% more data.
We're now carrying as much data in a month as we did in a year before the launch of 4G on EE. And that's even with the phasing out of unlimited contracts.
By September 2017, we predict 95% of EE customers will have 4G devices – so the amount of data they use will continue to rise. This means it's our duty to provide a great network with the quality of service that customers expect. That's what drives our strategy. Our aim is to be the best for network and customer service, and also the best for people.
Can you expand on that?
First and foremost, EE is a mobile network business. More accurately, we're a mobile network business in a 4G world, and so our aim is to deliver 4G to as many parts of the UK as is physically possible. We now cover three quarters of the UK with 4G. We've added 50,000 square kilometres of 4G in the last year alone – that's an area bigger than Belgium. In fact 4G from EE is now available in more places than any 3G network, just four years after launch.
We aim to hit 92% by September next year. By this time, the majority of EE customers will have an outdoor experience that means they'll never spend any time off our 4G network. And by 2020 our aim is to cover 95% of the UK with 4G.
On the topic of mobile coverage, can you tell us about your 'Clear on Coverage' campaign please?
Whether it's through advertising, coverage checkers, or at the point of sale, I think the mobile industry has inadvertently created a gap between customer expectation and the reality of using a mobile network. And I think a big part of that is down to the issue of population coverage.
As an industry we've typically talked about coverage using population-based metrics. Claims of '99% population coverage' sound great but they can lead to false expectations – In an EE survey of 4,000 consumers, 50% expected this to mean that they would have mobile signal wherever they go in the UK. Clearly that's not necessarily the case, particularly in rural areas. Too often, the customer experience has been very different from the marketing. 90% population coverage corresponds to about 40% geographic coverage. So based on that, if you move around with your mobile – which is the whole point – you may find that more than half of the time you have no signal at all.
That's why we're asking our peers and the mobile industry to get 'Clear on Coverage'. We're calling for UK mobile operators to deliver clearer information about where customers can expect to get a mobile signal.
I've written to the CEOs of O2, Three and Vodafone on the subject, and I've also written to Ofcom.
We'd like to support Ofcom in being the independent source of information on mobile coverage and quality. And we're calling for geographic coverage to be made the standard industry measurement. It'll provide customers with greater clarity on where they can make a call and use data across the UK.
It's important because whether mobile customers are streaming music or making video calls, a 4G signal is increasingly no longer just a 'nice to have' – it's a 'must have'.
So what is EE doing to be clear on coverage?
To start with, I'm pledging that from January 2017, EE will report all coverage in geographic terms, ie as a percentage of the UK's landmass. We'll also:
- stop using population coverage measurements in isolation when communicating with customers;
- publish regular updates on geographic coverage and data speed by county and by major roads;
- work with Ofcom to provide consumer advice on the role of devices in network experience; and
- meet with Ofcom and all operator CEOs to agree next steps on how to get 'Clear on Coverage'.
Can you give us an update on what you're doing to improve the customer experience?
Firstly, following the onshoring of all EE pay monthly customer service calls in July, we'll complete our commitment to answer all EE customer service calls in the UK and Ireland by onshoring pay-as-you-go and Home customer service calls in December. We've created more than 1,000 new call centre jobs in North Tyneside, Darlington, Plymouth and Merthyr Tydfil in 2016.
We plan to be number one for customer experience and the improvements we've made have seen complaints drop 50% year on year. They're now well below the industry average with fewer than five complaints per 100,000 customers, and customer churn has fallen to its lowest ever levels at just 1%.
We've also launched an innovative Network Status Checker tool on our website. It's a proactive way for us to provide real-time updates about network performance and any planned maintenance or upgrades. Customers can use the tool to report problems and register for text and email updates. Using the MyPlaces feature, they can set tailored alerts for up to five places that are important to them, such as their place of work, home or home of a loved one, and they will receive personalised alerts if there are network issues affecting these places.
The UK mobile industry is under revenue pressure, can you say something about what you're doing in response to that challenge?
There are some headwinds. On the regulatory side, we see the eroding of roaming revenue, as well as revenue from non-geographic numbers. Increased competition over many years has seen unlimited voice and SMS as standard, and larger data bundles mean that out-of-bundle revenue is falling. And then 'over the top' players are also affecting core revenue sources. SMS and MMS substitution has been joined by voice substitution. This all means that we have to be smarter to drive revenue. Our response is 'More for More'.
Put simply, it means getting people to pay more so that they get more. It sounds simple enough, but to achieve the first bit what they get has to be really compelling. For us it has meant:
- a tariff refresh including a new, premium upsell option;
- new product initiatives such as BT Sport and Apple Music, these help drive data usage; and
- gearing the business to focus on the things that customers care about, such as new device launches and exclusive partnerships. We've just had our most successful ever iPhone launch. In fact we sold more than any operator across Europe.
As I mentioned earlier, customers use around 20% more data on each new device variant. Add that to the new tariffs and product initiatives and you drive monthly recurring charge upwards. In the last quarter, this strategy delivered EE's best-ever results.
Marc, thanks very much for your time.