easyMobile, the no-frills mobile phone network arm of Sir Stelios Haji-Ioannous easyGroup, is to close its service in the UK and Germany on 13 December. Mobile Marketing understands that easyMobiles 80,000 customers were informed of the decision by text message.
SMS has been used controversially before by companies to inform staff of redundancies. In August this year, Blue Banana, a body piercing and jewellery shop in Cardiff, Wales, used a text message to sack a member of staff while she was off work with a migraine. It defended the decision by saying it was keeping in touch with youth culture. This is thought to be the first time, however, that a business has uses SMS to inform customers of its decision to close.
In a statement on the companys website, easyMobile blames the decision on a change of ownership at Danish telecoms company TDC, which was granted a licence to operate the easyMobile service in the UK and Germany in the spring of 2005. In January this year, TDC was acquired by a consortium of private equity houses, including KKR, Perima, Providence Equity Partners, Blackstone and Apax.
This was Europes first Euro 10 billion private equity deal and, as is standard practice with new owners of this type, ventures outside the core market of TDC (ie outside Denmark) were starved of funding and the management was purged the statement says. Despite lengthy negotiations between TDC and the easyGroup to find a way to continue the easyMobile service, the easyGroup has decided that its brand is at risk if it stays in the hands of TDC and therefore today it has terminated its brand license of the easyMobile name to TDC for breaching the terms of the brand licence agreement.
The announcement is, however, unlikely to signal the end of the easyMobile brand. easyGroup says it intends to retake control of the brand and find new partners with whom to commercialise the service.