Faulty Towers: EE gets cheap loan to bring its 4G infrastructure up to scratch

Everything Everywhere, which it patently never was and never could be, is the consumer-facing identity of the joint venture between Orange and T-Mobile in Britain. Behind them stand the parent companies of France Telecom and Deutsche Telekom.

The bombastic and hubristic name "Everything Everywhere" the jv saddled itself with caused much mirth in the media, considerable confusion to the public and made the company such a laughing stock and the butt of so many jokes that in the end the top brass were forced to change the name to EE - which still confuses the hell out of a lot of people.

An EE shop opened quite recently on my local High Street. It is so low key (the logos and paint job are more like camouflage than the in-you-face branding bling so beloved of its rivals) that it just fades into the background in comparison with neighbouring retail outlets. Indeed you can, as I have, walk straight past it without seeing it or the premises registering on you conscious mind. If you do stop and look through the window the interior is sort of retro-trendy post-modernist effort with a distinctly 1960s feel to it.

Earlier this week, armed with my trusty Press Card and a notebook, I stood outside the store in question and took a straw poll of passers by. Hardly scientific, I'll be the first to admit but of the 20 people who would talk to me - and not everyone would - 16 did not know what the EE logo is and 14 of them had no idea what the shop sells. Prompted by me to take a look inside and report back, 15 respondents did eventually twig that the shop sells mobile devices and services, but it took a while for the penny to drop.

However, so ironically retro is the interior design that three people thought it was either a joke pop-up of a 1960's gas or electricity utility payments office, a film set (we get a lot of filming around this leafy neck of the London woods) and one deluded soul who believed it to be "something to do with the council". We joked about this and the chap added, "One almost expects the Rolling Stones (the local geriatric rocksters who played London yet again last week) to be in there picking up their pensions." Well, its recognition of a sort I suppose, but perhaps not quite what EE has in mind.

However, EE has more than a recognition problem on its hands. In August this year the UK regulator Ofcom approved Everything Everywhere's request to use its surplus spectrum capacity to launch 4G services in Britain - much to the predictable and intense fury of its competitors who will not be able to offer so-called '4G' services until well into next year. Appeals have been lodged and court cases threatened. Meanwhile, EE is now offering a '4G' service of sorts, in very limited locations, while its rivals stand in the wings gnashing their teeth and rending their loincloths. Not a pretty sight.

And now, it transpires EE is discovering that many of its cell towers and antennas are not tall enough to handle those much-vaulted (but very limited) 4G services.

Another mobile spectrum auction looms in the UK (of which more later) and EE, despite its already privileged position on a far from level playing field, will be one of the bidders. If or, (let's face it) when it gets that extra spectrum it will have to spend big bucks on increasing the height of many of its comms structures by several metres. Indeed, in many cases, it will have to double their height from the current average of 15 metres to 30 metres.

Leaving aside the pollution and despoilment of the of the landscape this will inevitably engender, and all the planning issues that will now arise, the fact that EE has had to go cap in hand to the European Investment Bank to fund the infrastructure adaptations surely shows that parent companies France Telecom and Deutsche Telekom, who between them stumped-up £1.5 billion in loans to EE when it was formed in 2010, are no longer prepared to dip deeper into their pockets to fund further expensive investments for their oddly-named offspring.

EE got a £875 million bank loan all of its very own last year and also raised €500 million in a bond issue. The operator says it will not begin to increase the height of its masts until after the upcoming 4G spectrum auction is over and will also spend some of the loan on its stressed backhaul network. EE has promised that it will invest £1.5 billion in total on its infrastructure between now and 2015.

Meanwhile, in the House of Commons this week, the Chancellor of the Exchequer, George Osborne, issued his so-called "Autumn Statement" in which he selflessly condemned the UK to an ongoing period of austerity that will now, according to his forecast, last until at least 2018. Given that the Chancellor's forecasts are about as scientific and accurate a shoving a periscope up the backside of a goat in a search for economic enlightenment, the UK will be back to 18th century values this government pines for well before then.

Mr. Osborne repeated the trick that all Chancellors before him have used and, over the decades have brought to the peak of perfection - he baffled his audience of Members of Parliament (and the general public) with a bravura performance of financial legerdemain that would cause the three-card-trick merchants of Oxford Street to tip their tattered titfers in awed homage.

While he claims to be down big time of those corporations that would take advantage of legal loopholes to minimise their tax payments to the UK exchequer, the Chancellor himself isn't averse to a bit of financial jiggery-pokery. Hence his claim that, whilst everything else on the pecuniary front is going down the Swannee faster than the good ship Robert E Lee with a hurricane blowing at its stern, the amount the government has borrowed since his last statement, is actually down.

But not so. Once the smoke machine and mirrors had been packed away it turned out that government spending was "down" ,as Osborne claimed, only because he has included in his calculations and posted into the national books on the plus side a sum of £3.5 billion for a 4G spectrum auction that A) hasn't taken place yet and won't happen for many months to come and, B) may not raise £3.5 billion even when it eventually does happen. You try that on with the tax man and see where it gets you - sewing mailbags on Dartmoor, in Dartmoor.