3 moves operators towards a bit pipe role

Rating: Jericho

by Louise Wells

Perhaps it’s no surprise that 3G specialist 3 is the first to break step. Many mobile operators moved from being innovative and fresh to controlling and boring in the space of ten years. 3 has somehow refused to bow to peer pressure, announcing a radical change of direction

On 17 November, as Hutichison Whampoa’s finance director told the world’s press, “People want choice, so we are changing the business model. Essentially, we are tearing down the walls of the garden.” He wasn’t kidding. On 1 December, as promised, the UK company published its mobile broadband pricing plan.

There are two packages, X-Series Silver will cost £5 per month and X-Series Gold £10 per month ON TOP OF the basic voice and text subscription.

X-Series Silver bundles unlimited Skype calls with Skype PC users anywhere in the world and to any other Skype 3 mobile customer, plus unlimited instant messages, to or from Windows Live Messenger or Yahoo! Messenger, to another X-Series handset, or a PC. Customers will also be able to search and browse the Internet from their mobile.

X-Series Gold will allow users to watch their home TV through Slingbox, or access their PC files on the move, plus all the Internet communications and information services available with X-Series Silver. X-Series Gold customer will be able to buy a Slingbox from 3 for the reduced price of £99. Customers who already own a Slingbox can join 3 and opt for the X-Series Gold service.

The X-Series from 3 will be available with two handsets, the Nokia N73 and the Sony Ericsson W950i in January. Customers will choose their standard price plan and then plug in either X-Series Silver or X-Series Gold on top of their standard text and voice packages. In 2007, 3 will continue to expand the range of X-Series handsets and services. The X-Series from 3 will also come bundled with 512MB memory for the Nokia N73 and 4GB memory for the Sony Ericsson W950i.

3 has also moved to address one of the big grumbles about roaming charges: from January 2007 there will be no international roaming voice call charges when using Skype on 3’s networks overseas.
Still , there are a number of grumbles about 3’s announcements, including the fact that Skype drives most of us nuts on the fixed Internet and so is likely to be even worse on the mobile super hypeway and the jury’s out on Slingox’s performance until we’ve seen a demo.

There is a fair use policy, although it seems reasonable, oh, and you can only sign up for six months’ minimum service and through 3’s high street stores. And why oh why will the handsets and service only be available AFTER Christmas and how soon will there by more.
There is also the old adage that the definition of a pioneer is one who is found with the arrows in their back.
Nevertheless, this move by 3 will strike fear into the hearts of all mobile operators who have fought so hard for so long against open Internet access for subscribers that would reduce them to bit pipe status. The distant rumble of tumbling bricks will get louder and operators must concentrate on how they can make the best of the situation instead of trying to shore the garden walls up. Their role as a payment mechanism is a terrific advantage, for starters, that they could put to greater and more profitable use, including attacking the growing and hugely damaging problem of revenue leakage. Perhaps they could use some of the redundant bricks?

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