In a letter to customers, it said: “Due to a change of strategy at TDC, TDC has decided to withdraw from the UK market. Consequently you will not be able to use your easyMobile service in the UK from midnight on 13 December 2006. Our agreement with you will then formally end on 20 December 2006.”
EasyMobile said outstanding balances would be repaid in full.
TDC, originally the state owned telecoms company of Denmark, was a listed company on the Copenhagen stock exchange when it was licensed to operate the easyMobile brand by the easyGroup in 2005. The easyGroup took no financial risk in the licensing agreement and has described the easyMobile brand as a profitable deal, delivering easyGroup six-figure royalty streams from TDC.
EasyMobile never looked a runaway success, even given its frequently stated “start small, run lean” aims. But things started to come to the boil when TDC was purchased in a €10bn deal at the start of the year by a consortium of private equity houses.
easyGroup believed that the easyMobile venture was starved of funding on the grounds that the investors looked to TDC’s core Danish market, and it felt that its brand would have been at risk if it hadn’t got out.
“Simply put, TDC is no longer a worthy licensee of the easy brand and damages will be sought to compensate for any damage done to the brand in the past or in the future,” said Stelios, the easyGroup chairman and founder. “I will make sure that TDC understands that it must treat the customers and the staff well and I am already putting a new service in place with a new partner under it.”
Stelios will retain control of the easyMobile brand. He said he’d search out other suppliers to support the venture, but most bookies were no longer taking bets on its demise.