3 moves to take 3G mainstream

08 Jan 2007

Kicking off in the UK, Hutchison Whampoa has signalled the global launch of the flat-rate X-Series 'Swiss Army penknife' collection of mobile services from 3. Following deals with a roster of partners, 3 customers will be able to make unlimited calls from their mobiles using Skype, watch their home television via their mobile using Sling, access their home PC remotely using Orb, deal on e-Bay, and have access to the Internet and messaging services from Yahoo!, Windows Live Messenger and Google.

With X-Series 3 is endeavoring to replicate the fixed-line broadband business model in the mobile arena, offering use of mobile Internet services free at the time of use, for a flat fee.

'This is the Internet as it was meant to be and what people have been waiting for. Mobile broadband is the natural next step for mobile services, extending the full power of the Internet to mobile handsets,' commented Canning Fok, Hutchison Whampoa group managing director. 'By partnering with the leaders of the Internet and the leading handset makers, the X-Series from 3 will give everyone access to more of what they want, when they want it, and however much of it they want, all free when they use it.'

'We believe that giving our customers the benefit of the favorable economics of the broadband world will lead more customers to join our network. That is the proposition the 3 Group will be putting forward in all of its markets under the X-Series,' elaborated Hutchison Whampoa finance director Frank Sixt. 'This is why we created 3, and what our network was designed to deliver. The X-Series heralds important changes in the business model for mobile media and internet. Moving away from unit charges will set mobile users free to enjoy broadband services without fear of bill-shock.'

Research company Ovum's take on this Whampoa/3 initiative is interesting. 'Mobile operators in Western Europe have mostly been trying to avoid having their data business follow the Internet business model,' said Ovum principal analyst John Delaney. 'By that, we mean free services, no usage-related charges, no automatic visibility of the access-provider brand. 3 now seems to be embracing the Internet model - at least, to the extent that today's technology can support it.'
'Everything about the Internet that worries the mobile operators is here. Flat-rate data tariffs remove the link between service usage and end-user revenues. VoIP undermines mobile voice revenues. Instant messaging offers text messaging at a fraction of the price of SMS. The big portal brands are far more powerfully associated with Internet services than the operators' brands. Open Internet access means you never have to see the operator's portal again, if you don't want to.'

In Ovum's view the strategy is clearly risky with, in the worst case, 3's role being reduced to that of simply providing Internet access. But it may be, adds Ovum, that as the UK's smallest operator, and the one with the least legacy stake in the traditional business of mobile telecoms, this is 3's best hope for the future.

However, the lack of information about cost at launch was noted. 'That's what will ultimately determine whether X-Series becomes a mass-market service or remains confined to the category of 'expensive toys for rich boys',' concludes Delaney.

The X-Series from 3 was launched in the UK on December 1 and in 3's other markets around the world is planned for early 2007. Initial handsets for the service are the Nokia N73 and the Sony Ericsson W950i.

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