EE's Olaf Swantee speaks out on the industry's biggest issues

EE's Olaf Swantee speaks out on the industry's biggest issues

Swantee on… Why EE is winning at 4G

‘We have demonstrated a stronger revenue pull compared with some of our main competitors based on 4G. This shows that it is possible with 4G and a network to differentiate and to generate more revenue. We have introduced what we call a double speed offering, which is basically a tariff where customers get twice the speed of normal 4G and that tariff is super popular, attracting two thirds of all new iPhone customers. This demonstrates that people are willing to pay for network differentiation; that’s great news, that’s something we haven’t had in this industry in a long time.’

Swantee on… Why the UK is a hard market

‘I think the industry makes it very hard for itself. I mean clearly there are opportunities these days to work with other tools rather than just making a product available at a low price. It’s not enough to fight some of the headwinds that we have from a revenue perspective. First, there is incredible price competition – the pricing in the UK is a third of what it is in the United States. Second is the fact that we have very heavy regulation. There is regulation from Ofcom, regulation from Europe and sometimes even regulation from government, and all three things together create a very heavy regulatory environment. Third – and this is an international trend, but it’s very strong in the UK – is the fact that customers are increasingly unprepared to pay money outside the normal excess fee for telecommunications. They don’t want to get a bill shock.’

Swantee on… The sales strategy 

‘Elements of our strategy have already come through, although it’s not something that is ever completed. We will continue to evaluate our indirect and direct models, but you can already see a lot of what we have done because of that review. First, we have increased the number of stores; second, off the back of the Phones 4u bankruptcy we have stopped trading with that entity. You have seen us intensify our activities and try to improve our B2B channel and indirect channels for SMB. We’ve tried to improve our procedures in co-operation with our B2B partners. We are actively driving our strategy to the market, but there are still decisions to be taken and we will continue to take those over the next six to 12 months.’

Swantee on… The performance of direct channels

‘If you look at our Q3 results, our direct channels have become more important year-over-year by four points, so we’re now close to 60% direct and we’re quite pleased with our performance. It’s not that indirect is unimportant, but we have a legacy of having a higher reliance on indirect compared with some of the other players in the market. And that’s why, having seen that direct share improve, it’s good for us. So we’re starting to see a solid development of that.’

Swantee on… Flotation

‘EE will continue to see a lot of rumours around its shareholder structure because we are a successful joint venture, and unlike most joint ventures in the world. When you have a joint venture like that there will be constant debate about what will happen… will we be an IPO? Will we be a private equity owned business? Will we be a combination of elements like an IPO plus? The people that make the decisions on that are certainly not myself or people working for me. Those decisions are squarely with our shareholders, and currently they would say they are happy with our performance. They are certainly not in a rush. Orange CEO Gervais Pellissier has been quoted as saying there is no rush to monetise their stake or their ownership of EE. He has also said that there is no need to make any changes because it is working. There will no doubt be new rumours, and it will go on for a long time, I think.’

Swantee on… Restructuring customer service

‘The challenge for the industry overall is that customers are asking more questions than before because our product is being used differently – and I don’t think you’d get a different answer from Vodafone, O2 or any of the other companies. You now get questions about Android, iOS, and internet access, as well as ones about service. The customer service role in our industry is becoming more important, and the problem for the industry is that it is positioned in a lot of companies as a cost centre. And when something is a cost centre it’s hard to create a fantastic service because it’s all about the number of calls and the cost of calls. So what we are trying to do is not only be answering the phone, but having more people in our retail stores and in our contact centres. We have also made certain parts of the services journey chargeable. We’ve introduced some new elements such as evening tariffs to try to turn this from a cost centre into a profit centre. If you look at some of the most successful industries in the world, such as the IT industry, they have services that people pay for and are quite happy with. For example, we find that customers who have handset insurance actually have a higher satisfaction score when they have an incident, compared with customers who don’t have insurance.’ 

Swantee… The impact of restructuring

‘Overall, we retained the same number of employees last year. We are hiring more people on the front line and there is still some integration work we’ve had to do in the back and support management areas. For example, we’re moving from three headquarters to two. I expect 350 jobs to be affected there, but in return we are hiring 360 people in retail and we’re ensuring 600 people’s jobs.’ 


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