Mobile's race to the bottom

20 Nov 2006

Hutchison's new X-Series is more than just a collection of cool apps: it's a shot across the bows of the whole mobile industry.

Hutch announced last week it was going to bring Google, Skype, Orb, Sling Media and other content to the mobile phone.

Branded as the X-Series, these will be available in the UK from next month and in other markets in early 2007. Customers will pay a flat access fee for X-Series on top of a basic subscription. Apart from that, Hutch hasn't given any specifics about pricing - but it doesn't have to.

When it says that the X-Series "will lay the foundations for the mobile broadband charging models of the future", the company speaks truly. It's the Internet model come to the cellular sector, and Hutchison is betting the house on it.

As Ovum's principal analyst John Delaney says, "Everything about the Internet that worries the mobile operators is here."

We're talking flat-rate data tariffs, VoIP, instant messaging (that threatens to do to SMS what VoIP is doing to voice), open Net access, and the close bundling of powerful Internet brands who threaten to take over the customer.

It's quite a gamble by Hutchison Whampoa group MD Canning Fok. Then again, he's been the main force behind the company's disastrous foray into 3G and is feeling the heat.

The conglomerate has lost more than $8 billion in the last three years on his 3G plunge. For all that money and effort, it has signed up a paltry 13.5 million customers in half a dozen markets in three years.

With the heavy network rollout capex behind, and with the promise of genuine broadband speeds ahead, now is an apt time for a ratcheting up of price competition.

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