[3GScottishUser]

An interesting insight from an article about 3G network sharing in the Guardian Business Section:

"A deal would help O2 roll-out its 3G network which is the smallest of the four original holders of UK mobile licences. It currently reaches 65% of the UK population and has to be at 80% by the end of the year.

Some analysts have suggested O2 could buy rival 3 to boost its network coverage, but Mr Erskine ruled out this idea.

"We are certainly visiting network sharing but I certainly would not think it likely that we are going to buy 3, in fact I think it's definite that we're not," he said."

http://business.guardian.co.uk/story/0,,2024561,00.html

[getti]

There is no chance O2 would be able to buy 3. Vodafone showed interest when rumors of a sale were here last time but instead we just launched X-Series which was a big announcement.

3 wont get sold to anyone but there will still be rumor after rumor

[3GScottishUser]

There is every chance 3 UK will be sold and even more chance now that the the Big 4 have decided to pool their network resources and share costs. One thing is sure, if 3 UK is sold it'll be for a lot less than what HWL bargained for but like DoCoMo and KPN before they might just have to bit the bullet and take what the market will give them.

With 30 million plus customers on each of 2 jointly owned networks the operating costs reduce (and Ofcom will like that as it means a better deal for customers) but with just about 10% of that number 3 UK are left out in the cold with some very high costs per susbscriber making their service even harder to compete.

I have no doubt that Ofcom would have no problem allowing any of the Big 4 absorb 3 UK but the big question now is who would need to or want to? Its unlikely to have been planned as such but HWL's 3 UK appears to have been caught in a classic business pincer movement that leaves them very exposed with high costs and few options as an independent.

The above coupled with the consolodation of fixed line, Home TV, Broadband and WiFi looks very threatning for a stand alone company struggling to convince customers to buy mobile entertainment services and slashing monthly contract revenues.

I suspect the moves now taking place (if allowed) will be viewed as defining ones not only for the future of 3 UK but the entire UK mobile market.

[Hands0n]

O2 could do with a decent 3G network to replace their ailing effort. 3's would do nicely.

[3GScottishUser]

I think Mr Erskine is probably the most accomplished CEO of any UK mobile operator. He took a basket case BT subsiduary and turned it into a company Telefonica paid £18 billion for and has now landed himself a top job running much more than just 02's mobile interests.

Erskine is shrewd and knows the market. The priority was never 3G to him, it was profits and adding value and he certinly proved he could do that. Remaining technology neutral he has made 02 UK the biggest UK mobile op and the solution to his 3G requirements probably does not lie with buying a lame duck at huge expense, much better to co-operate with T-Mobile and let Vodafone co-operate with Orange and between the two arrangements HWL are left out in the cold with ever increasing subscriber network costs.

Its a poker game and Telefonica, France Telecom, Vodafone and HWL are playing chips that have whole market values. Burnt out in Japan Vofaone repositions in Turkey and India. HWL burns out in Europe and sells India. France Telecom is fed up with Holland and investing in Eastern Europe. Its all much bigger startegy than the sideshow in the UK but the gameplan here seems to be the elimination of the 5th 3G network either by acquisition at a bargain basement price due to market pressure or by total destruction fuelled by alliances, regulation of termination charging and enforced dealer hostility.

Wow... if only they could make a soap about mobile ops at boardroom level .... now that would probably ecllipse the shouting in Eastenders!!

[getti]

YOU AINT MY MUVA.........YES I AM!!
:p :D

[Hands0n]

Nice Conspiracy Theory :D but I rather wonder why the incumbents would be bothered to spend Board time with a spent force like 3? It'll flounder through its own Customer atrition rather than by any devious shenanigans by the so-called Big Four. I've never seen a company so hell-bent on its own oblivion.

As for O2, 3G may not have been an Erskine priority but, in the face of the rivals establishing very credible 3G networks, it may well be a folly decision on his behalf. Their shabby attempt at introducing iMode to the UK is a laughable loss of technological direction. Something that a technology company cannot afford to sustain.

Imagine, for a moment, that O2 really do nothing about the incredible poor quality of their 3G network. Then, see the other three launching services on their 3G networks that cannot be adequately supported on 2G/2.5G. That will leave O2 out in the cold and with little hope of playing a reasonable game of catch-up. It won't be easy for O2 to operate in the wake of the others.

O2 may well be a huge success [right now] at the hands of Erskine. But that does not mean that it will always be in that state. It would be all too easy to lose ground against the competition and suffer the inevitable consequences.

I look at O2 and wonder, truly, what the hell they are up to. Everything is so very average. Nothing much, if at all, innovates. A pregnant pause or corporate entropy? I think we'll have to wait and see if Erskine is playing a good game or an old one that noone else is playing!

History is littered with large businesses and corporations who have gone into liquidation or, at best, our form of Chapter 11.

[3GScottishUser]

Bearing in mind the recent history of the mobile ops in the UK I think if I had any cash to gamble it would be on Erskine's vision of things.

3 is a dead loss, its burnt out and HWL are simply taking a fraction of the commission they were paying to get churn customers through dealers and investing that in their own outlets, which is fine, but now they have to accept £15 a month from customers where the incumbents can charge £30!

It's a hiding to nothing for 3 with Ofcom on the case of 3G termination charges and the big 4 combining network costs and offering converged services. 3's appalling offshore customer service have played a huge part in the demise of the company and the retreat from pre-pay has made 3 an also ran in the UK where that payment method accounts for more than 50% of the total market.

HWL have a massive problem on their hands and I doubt if they will squander the huge profit they just made on Hutch Essar (India) on another go at a totally saturated UK mobile market.

HWL in the UK mobile market are a spent force.

[Hands0n]

Bearing in mind the recent history of the mobile ops in the UK I think if I had any cash to gamble it would be on Erskine's vision of things.

What? To paraphrase a certain tennis player "You can not be serious?" 2G and iMode? Mediocre Voice and Text tariffs, unconvincing Data tariffs and an unviable 3G network? These are not the hallmarks of success.

For sure, his strategy to maintain traditional business may be sound between 2003 and 2007 - but going onwards it will look quite old and tired against what the other three are up to. Business may be slow to champion 3G for their purposes, but when they do any network not delivering it will end up sidelined. Vodafone know this, with their traditional strength in supplying 2G data to businesses. They have not be at all slow to ramp up 3G to a level at which business will feel compelled to buy into - even if it simply means retention the cost of doing data on 3G is a big enough incentive to the mobile operator.

No, I'm not buying Erskine's tactical for anything more than the short-to-medium term. I'd give him less than a year to get O2's 3G act together to face the future as a marginal player.

[Ben]

What? To paraphrase a certain tennis player "You can not be serious?" 2G and iMode? Mediocre Voice and Text tariffs, unconvincing Data tariffs and an unviable 3G network? These are not the hallmarks of success.
I have to say I think Hands0n has a very strong point here. O2 have done remarkably well in the here and now, and the Tesco value proposition is really paying out for them at the lower end of the market - but come on, they have no future strategy! iMode has been the disaster we all knew it would be, and without a third generation network to speak of they're really taking a gamble that no data hungry application is going to take the market by storm and leave them out in the cold as punters of other networks get mobop shareholders rich!

'Be' broadband is O2's most interesting future proposition. We'll be seeing their first converged attempts later this year. Perhaps with the 3G femtocel(?) on every router they can create a large 'perceived' next generation network... but I just don't know how this is going to play out.

[getti]

I agree. O2 just seem to be there because they are there. iMode is a flop due to costly data pricing. The 3G network is a nightmare with very limited coverage and high costs.

The bolt ons for PAYG are expensive and low value for money and as Ben said, they have no direction for the future

[3GScottishUser]

I think some are missing the point!

02 are the UK's most succesful mobile operator. They might not have a full 3G coverage but that has not hindered their progress one iota. They have the widest range of consumer options for information with i-mode and their own services.

02's strategy appears to have been to stick mainly to known popular products and and let others fight for a share of the developing technology market (3G). Were they wrong? I dont think so and they nicely covered themselves with i-mode for those hungry for something new and the desireability of fashion GSM handests has also helped.

The tie-up with T-Mobile should bring them up to speed with 3G but all things considered its doubtful that investment will make much of a difference to them as from where I am sitting they seem to have all of the bases covered for the average mass market mobile customer.

[solo12002]

" but now they have to accept £15 a month from customers where the incumbents can charge £30!"

Thats one way of looking at it. The other is the other networks have been over charging us for years. Im sorry if I was solely after 500 mins a month and not to worried about things like video calls etc, it would be dam silly of me to pay one of the other net works £30 for the same type of deal, I think its a smart move on three.

I dont realy like them, but given their prices and the fact thay have 3G access on their handsets, for a fair price , more than can be said for 02 or vodafone, Ill go with them just for that.

[Hands0n]

02 are the UK's most succesful mobile operator. They might not have a full 3G coverage but that has not hindered their progress one iota.


Yes it has, they are losing custom that wants 3G for whatever purpose. They will continue to lose custom in the face of applications and services that are only truly suited to the higher speeds that 3G/3G+ can offer. O2 are not in a position to compete with their rival networks. That, for one simple example, is not a good position to be in.



They have the widest range of consumer options for information with i-mode and their own services.

02's strategy appears to have been to stick mainly to known popular products and and let others fight for a share of the developing technology market (3G). Were they wrong? I dont think so and they nicely covered themselves with i-mode for those hungry for something new and the desireability of fashion GSM handests has also helped.


Outside of Japan i-Mode is an irrelevance. O2 have pinned their colours to a lame duck.



The tie-up with T-Mobile should bring them up to speed with 3G but all things considered its doubtful that investment will make much of a difference to them as from where I am sitting they seem to have all of the bases covered for the average mass market mobile customer.

I couldn't disagree more. The sole reason that O2 are tying up with T-Mobile is that they realise themselves that they are not 3G ready and unlikely to be in the short-to-medium term. They will miss out on all of the 3G-friendly product, and tied to what is a legacy 2G network they are not in any position to compete on their own.

It may well be that O2 have done a lot of things right in the past. But never before have they been faced with the situation they are now in. One in which they are unable to compete with network services and facilities on such a large scale. Even the latest incumbent has a viable 3G network that outstrips what was the original Cellular Network provider in the UK. A shameful position for O2 to be found in.

[getti]

" but now they have to accept £15 a month from customers where the incumbents can charge £30!"

Thats one way of looking at it. The other is the other networks have been over charging us for years. Im sorry if I was solely after 500 mins a month and not to worried about things like video calls etc, it would be dam silly of me to pay one of the other net works £30 for the same type of deal, I think its a smart move on three.

I dont realy like them, but given their prices and the fact thay have 3G access on their handsets, for a fair price , more than can be said for 02 or vodafone, Ill go with them just for that.

Amen solo. Thats why 3 have the 15 pound deals for people who want a good phone to call and text on. Plus having the other things is a bonus. My store is nearly selling out of the phones its such a good deal.

[3GScottishUser]

Don't kid yourselves.... £15 X 18 = £270.

Now do the sums.....

Handsets cost the network about £100-120 each (We know this as Vodafone sells their PAYG 3G handsets at trade price).

The cost to terminate 500 minutes on other networks is about 3p/min on average - so its £15 a month if they use all of their inclusive minutes to call other moble networks. Suppose they only terminate 60% of calls to x/net mobiles - thats £9 a month X 18 = £162.00. (There are charges to terminate to landlines too of course although they are lower!!)

Then there is the cost of advertising, customer service staff, sales people, premises etc etc... Think of a number... maybe about £30 to £50 over the life of a contract?

They are burning money like crazy!!

The hope is they can generate revenues from texts and content I suppose, but that is a crazy gamble!! They are also relying on ingress the ridiculous high termination charges 3 impose that are about to be quashed by Ofcom!

The fag packet arithmetic produces £120 + £162 = £282 .... less than the £270 3 will ever get and if that deal is sold through dealers they pay them £150 for their efforts!!

The lower prices are great for customers who dont have high expectations and are prepared to accept the level of service they pay for but are not realistic and simply underline the fact that 3 cannot compete on the same level as the others and they have to do that to survive in the long term.

[solo12002]

I think we could all movethe figures anyway we want. For me the botom line is this.

T-Mobile have a very good price plan flext 35 plus web and walk, this gives most ppl what they want. as you see what you get. But currently no half price deals

Three have good plans money wise and now have the x-series, down side it its mobile access only, but again it gives a lot of ppl what they want. Oh they have half price deals as well

Vodaone have stop the clock, passport etc, I wonder how much stop the clock costs vodafone never mind the cost of adds etc maybe more that it costs three for their £15 price plan. is this why they stoped the weekend thing or cut it back, costing to much was it. add this on to the fact that they dont have any date plans that a user could aford any way.

As for 02, well almost no 3G coverge at all and no data plans to match either.

Im sorry but while I hate the CS in india, at times the porn on planet 3, I have to give three credit in that they were the first to issue some decent price plans, the other networks followed and in most cases have still not matched them without things like family, stop the clock or passport other than t-mobile. They have some form of data acess via handsets at a fair price, were vodafones, and o2's never mind orange.

I think three have made a smart move the £15 a month price plan will take PAYG users away from Teso Mobile , O2, Virgin and maybe some of the other networks the plan is great and i think it will be baite to get users onto the network then to think about using the add ons three has.

Ithink it was sill of three to move roaming to Orange and I think it was silly of o2 not to buy three.

[3GScottishUser]

Vodafone have not changed STC for contract customers, yet!!

As far as 3 attracting PAYG customers with their £15 a month deal.... unlikey as it requires a credit check and a direct debit.

02 wont buy 3 because the likely asking price would be far more than its worth to them. Much cheaper to roll out or share costs to roll out with another operator and in the process squeeze HWL out of the market.

[Hands0n]

Off Topic - Yes, STC is still the same for Contract and PAYT. The only change that they have made is to Free Weekends for PAYT (see here (http://online.vodafone.co.uk/dispatch/Portal/appmanager/vodafone/wrp?_nfpb=true&_pageLabel=template12&pageID=PPP_0008) for all of Vodafone's PAYT stuff).

Vodafone's Stop The Clock (http://online.vodafone.co.uk/dispatch/Portal/appmanager/vodafone/wrp?_nfpb=true&_pageLabel=template10&pageID=PPP_0007&redirectedByRedirectsImplServletFlag=true) is unchanged and can be used in conjunction with Free Weekends (once FW runs out then STC kicks in - which is particularly useful for x-net calls).

Although Vodafone are offering what amounts to an array of options for PAYT I do rather think that this is quite understandable and flexible in terms of allowing you, the Customer, to choose a working tariff that suits your pattern of use. The full details of their two plans are here (http://online.vodafone.co.uk/dispatch/Portal/appmanager/vodafone/wrp?_nfpb=true&_pageLabel=template10&pageID=PPP_0038&redirectedByRedirectsImplServletFlag=true). Each of these have their own upside and downside, but best of all the STC, Free Weekends, Passport are all free - although you do have to opt in. The only real negative I can see about Vodafone's PAYT is their ridiculous £7.50 per MB data charge, but then no-one except T-Mobile has got data tariffs quite sorted, yet.

[solo12002]

" As far as 3 attracting PAYG customers with their £15 a month deal.... unlikey as it requires a credit check and a direct debit"

I agree but lets not forget on three you can top up with £25 pounds on PAYG and get 500 mins, I wonder how much that would cost on any other network if you use 500 mins, I mean on most networks its 30/45 ppm x net.

the problem I have with things like STC,Passport and o2 rewards is that you have to opt in and for me personaly I rather have clear easy to understand prices ie, on t-mobile all calls on their PAYG are 12p, you dont have to spend £15 pounds to get it etc. These wonderful things like STC/02 rewards etc confused ppl, the idea of you having to opt in is solely to make sure ppl dont use them rather that the other way round.

Maybe the networks should have us to opt out if we dont want them.