U.K. Mobile Carrier EE to Gift Apple Music to New Customersby
Free subscriptions to Apple Music could cut churn, EE CEO says
Second such deal for Apple in so many years, EE says
EE, the mobile division of telecoms provider BT Group Plc, said Friday it would offer free subscriptions to Apple’s streaming music product, Apple Music, to fend off rivals vying for customers in the U.K.’s crowded mobile marketplace.
New EE post-paid contracts and renewals will come with six free months of Apple Music starting Sept. 1, Marc Allera, Chief Executive Officer of EE, said in an interview, without disclosing what the network will pay Apple for the service.
He said the churn rate of customers switching away from EE "has been improving," currently standing at 1 percent. "Offerings like this will help lower churn further," Allera said.
It’s the second time Apple has licensed its music content to a mobile provider that would then give it away for free, following a similar pact that it signed last year with Australian mobile provider Telstra Corp., Allera said.
EE and other U.K. telecoms providers hope to attract customers from one another with new content offerings.
This spring, EE began giving its users sports content licensed by its parent company, BT. The move was seen as a response to a deal between rival network provider Telefonica SA and Sky Plc. Under that deal, Champions League and Formula 1 content from Sky was pushed out to Telefonica’s O2’s network in the U.K.
Apple said in June it has 15 million paying subscribers. EE has said previously it has 14 million 4G customers. Giving just a portion of those users access to Apple’s music streaming service -- if only temporarily -- could help close some of the gap between Apple’s subscriber base and that of Stockholm-based music streaming service Spotify Ltd., which has 39 million paid subscribers according to a recent Billboard report.
Deutsche Telekom AG’s T-Mobile division is expected to announce a similar deal with Apple in September, according to German media.
Allera said EE would continue to buy content, rather than make its own.
"The approach we are taking is to work with partners to create these services, not create them ourselves," Allera said. "Operators have tried to create their own portals to take customers away from services they were using. That didn’t work."