Three's Porting Ratio Stands At Three To One For 2011

[Hands0n]

For the second year running Three have confounded their critics and detractors by turning in an increasing profit, year on year.

Significant to their 2011 results Three have also been able to announce a fairly encouraging porting ratio and an increase of UK market share to around 11%. For the smallest MNO to be able to put out such figures to industry and The City is encouraging news to their customers and staff. The firm is a long way from disappearing round the commercial U-bend and into oblivion.

As we head into the LTE auctions later on this year, and with a reduced number of MNOs following the EE construction of T-Mobile and Orange, it is ever more vital that Three succeed in the UK. There is no one to follow them and if the unthinkable happened it would be a black day for customer choice and compelling tariffs and propositions here. With the effective loss of two MNOs (counting the EE venture as a consolidation of two into one, and Three going) the UK would be left with just three operators. The richness of variety and choice that we currently enjoy would disappear. We'd likely face a model comparable to the USA, Canada and some European nations where the power of the MNO is disproportionately loaded against consumer choice.

If Three can pull off a similar success into 2013, acquire the necessary LTE licenses and some lower frequency spectrum, they'll be in a strong position to consider their longevity assured. It may also make them rather attractive for acquisition by a new parent. HWL may be able to realise a significant return on investment selling Three as a very strong going concern. Again, that would not be a bad thing at all if the new parent is in the business of growing them. But this is wild speculation right now. What happens next during 2012 will be defining for Three's future success.

Three claims it is currently gaining three times as many customers as it is losing to other networks.

The operator said the 3:1 porting ratio, which indicates customers switching their phone from one network to another, has helped it increase its share of the handset market to around 11 per cent.

Three said its share of monthly contract sales is also well above its current share of the market.

During 2011, Three added 1.26 million customers, “the vast majority” of which were postpaid handset customers, said Three chief financial officer Richard Woodward (pictured).

Woodward said: “I look at it every day in terms of the figures we get from GFK in terms of share in the marketplace now and I know what my churn is and I know where my customers come from.

“I also know that more customers port into me than port out by a significant margin.

“What I am critical on is what percentage share do I take in the market every week, and as long as that is higher than what my current share is and my churn is under control, then I am growing.”

In its full-year 2011 results, Three recorded underlying profits of £30 million and revenues of £1.7 billion, up 14 per cent on 2010.
Woodward said the 2011 results showed Three had turned a corner and wuld continue to record growth in revenues and profits in the future.

He said: “We have seen competition being fairly active in the first quarter, but we have come back fairly robustly.

“I think it will continue to be a highly competitive market but we are comfortable that we now have a growing brand awareness and a growing relevance. People are starting to take us much more seriously off the back of our network and the other things we are doing.”

Source: http://www.mobilenewscwp.co.uk/2012/...-three-to-one/

[Wilt]

Nice to see them growing like this - seems to be being sustained too.

All they need to do now is sort phone cs out. Perhaps now that they're in profit they will take a look at this.

[Ben]

Yeah, it's good news to be sure, but a few things they could work on:

- Customer services. The Twitter team was quite revolutionary, but they need to take it to the next level and 'reinvent' mobile operator CS.
- Femtocell strategy. Yes, it's important to me. They're constrained by poor performing spectrum, a good femtocell strategy is essential.
- LTE. They need to ensure they secure low frequency spectrum in the upcoming auctions if they're to be a viable 4th player in the UK mobile market for the long term.

Tariffs are great I think, I like the website, and I like the brand and the general attitude. There are just holes that need to be filled.

[Sajjad Rahman]

Good news indeed. I am a huge fan of 3 mobile network and love their 3G connectivity strengths a lot.

[Hands0n]

Indeed. Three's 3G network and tariffs are unsurpassable at best, difficult to beat at worst. But their overarching problem, their albatross, is their off-shore Call Centre that drives so much bad will and poor opinion of the company. Even OFCOM's own investigations reveal the same. And all of that is such a crying shame for Three. Without that Call Centre generating so much complaint they would be a significant and major threat to the "big four" incumbent operators in the UK.

None of that is to take away from Three's 2011 achievement and I am hoping that they go from strength to strength.

[3GScottishUser]

I really dont believe the hype 3 UK are putting out.

They made a fraction of 1% profit on paper with no chance of recouping the billions they have spent in the last 9 years.

The numbers are open to question as they have users included like me who have spent nothing in 4 years (my Skypephone SIM is still active with £8 worth of credit!), and what about all those SIM only deals for voice and data that will never be extended because its cheaper to buy a new one than to top-up an exisiting one!

I'm sure 3 UK are doing better with their unlimited data but that is no longer unique and Talk Mobile have deals that match and some that beat 3's offerings with the added advantage that they use a network that has both GSM and UMTS coverage. 3's big issue is customer satisfaction and their customer service which most here and on forums and review sites confirm is still well below an acceptable standard. David Dyson probably won't be able to change what his predecessors knew was a major issue and that poses the question about the whole business strategy of HWL with 3 UK.

The 3 brand is damaged goods and has been ditched in Australia in favour of Vodafone. Hutchison Vodafone Austrailia combined 3 and Vodafone with HWL as minority shareholders. The business is so bad that both HWL and Vodafone have despatched their top people to try and salvage something out of it but their first move was to bin the three brand. Just visit www.three.com.au to see what has happened in the last few weeks.

I'm not convinced 3 UK are on a roll for long with their focus on expensive (£30+ per month) contract deals with up front handset costs and unrealistic PAYG pricing. Time will tell but I'm sure 3 UK is still in troubled waters and the varnish of the latest figures will become dull very soon especially when EE get moving with LTE and O2 and Vodafone's 900Mhz UMTS roll out.

[Wilt]

I don't understand how the PAYG argument still holds any water when the vast majority of port-ins are new postpaid customers?

Both this article and their latest released annual results confirm that their contract additions are growing at a good rate. Furthermore, Three has a higher proportion of contract customers than PAYG customers.

I'm sure Three are quite happy to accept many new PAYG customers to boost their headline customer figures, but other networks are also guilty of this. O2 are asking cancelling postpaid customers to downgrade to PAYG rather than cancelling to keep them on the books for a further six months.

I do find it hard to believe that selling cheap mobile data SIMs on eBay/Amazon is having a large impact on customer numbers. And that certainly isn't having any impact on the postpaid customer numbers.

[Ben]

Despite no immediate LTE or 3G900 prospects, Three are the go-to network for mobile broadband and I can't see that changing at any point in the next 12-18 months. I always use my Three MiFi over the Vodafone one in the UK now and it never lets me down. The Vodafone one all too often relies on slow 2G fallback, due to a half-hearted 3G rollout on Vodafone's part. All I use the Vodafone one for is roaming abroad, because of the price. Foreign networks always seem so much better than ours anyway, so it doesn't matter who bills me.

There may be a long journey ahead, but I'm convinced they can make the long-haul if the financial backing stays solid.