3 Realizes Its Customers Aren't Nuts; But Still Can't Let Go Of Full Control

from the so-that's-how-it-works,-huh? dept

There are two really interesting things that came out of today’s announcement by UK-based wireless operator 3 today that they were going to focus much more heavily on being a mobile broadband player than being a mobile phone operator. For those who don’t follow the wireless industry closely, 3 was the first mobile operator to launch a “3G” service — but they did so on March 3rd, 2003 more because they liked the date (03/03/03) for marketing reasons, rather than that they had the network and associated services ready. Since then, they’ve made numerous missteps in trying to promote their service. They launched with bulky, expensive 3G phones that no one wanted, believing that people would pay a premium for the ugly phones in order to do video calling — something that still hasn’t caught on. Meanwhile, through it all, they refused to learn the lesson that the internet should have taught them, that people want to be free to do whatever they want with data services, and that’s what encourages adoption. Instead, an executive from 3 claimed that the company’s customers were “nuts” if they wanted to access the full internet, and they were much better off with the extremely limited walled garden the company provided people. Today’s announcement suggests they’ve finally realized that’s not true, and that their value really is in providing mobile connectivity, rather than a heavily limited version of what they think people want. That’s a good sign, though, the fact that it took them more than three and a half years to realize it should send up warning flags.

However, there is one oddity in the announcement. As part of the announcement, 3 talked up various deals with lots of companies, including Skype, Yahoo, Microsoft and Google. They also announced a deal with Sling Media, makers of the Slingbox that lets you watch your television over the internet, including on mobile devices. It’s not at all clear why 3 would need to announce support from these companies if all they’re offering is a data connection. Once that’s there, it’s up to the users who they work with, whether it’s Google, Yahoo, Sling, Skype or someone entirely different. With Sling especially, the company is hyping this up as a big deal since it’s their first mobile partner. However, as we’ve noted in the past, it doesn’t make sense for Sling to need to sign partnerships with mobile operators. As long as mobile operators are offering unlimited data services (which is always a tricky subject), it’s up to the users, not the operators, to decide if they want to make use of Sling’s product. By even suggesting that Sling needs “permission” from the operators, shows that they still can’t get it out of their heads that they should be the gatekeeper to the walled garden.


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Comments on “3 Realizes Its Customers Aren't Nuts; But Still Can't Let Go Of Full Control”

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19 Comments
Chris says:

Not nuts, but reluctant to cut "unlimited" prices

Mike-

I disagree. The way carrier’s approach “application-based” data pricing is to offer such an app like Sling with unlimited data usage only for that very Sling-IP for much less than what an unlimited data pricing plan without app restrictions would cost. Say an unlimited data plan is $60 per month, an app restricted “Sling plan” could be selling for as low as $10/mo or even $5 if there is a 2 year commitment.

The thinking is that breakage (i.e. the number of folks NOT using their app) will more than compensate for the loss on the heavy Sling users.

I think this is actually a smart way of doing things, as the cost of offering data over 3G networks is inherently higher than any of the non-regulated spectrum technologies or wireline broadband. This way, you increase the number of potential data plan subs big time.

Of course, the key question of carriers being “nuts” or not will be if they are willing to permit all apps on the unrestricted unlimited data plans – which you (and I) are probably suspicious about.

Best, Chris

Derek Kerton (profile) says:

Agree With Commenters

I’m with Chris, Gabriel and Julian on this. Distribution and simplicity are very important in this case. I’ve spoken with Sling Media in the past, and they are certain that distribution deals with carriers will get them greater market awareness and lower adoption hurdles. Sling will still sell more of their boxes, and maybe even get a rev share. Package pricing as mentioned by Chris is something Sprint PCS has been doing successfully for specific apps for a while, and it has worked.

The important thing that Mike worries about is whether 3 will *also* offer open access to the data pipe, so that, for example I prefer to use Orb over sling, I would be free to do so on 3’s network. But we all should agree that there is a difference between a “default” service provider and a “mandatory” choice. Like Windows: IE is the default, but you can still run with the fox.

Daniel (user link) says:

3 customer

as a (nearly) 2 year 3 customer i must say that i find the amount of slating that 3 get rather stupid, initially the phones were bad, yes, initially the coverage was poor, true. but nowadays? its like comparing the new skodas to the old ones, the last couple of years in the mobile industry has been like a decade or 2 in the automotive industry. the new phones are neither ugly or expensive, and contracts are usually (and they have crept up to almost the same as the other operators) a hell of a lot better than you get with other providers.

the only problem i have with 3 is the “walled garden” as you put it, back in the day on my gx20 with a full HTML supported browser i ran a mobile website, then i lost interest in when i moved to 3 because (a) it didnt support HTML browsing (the phone not 3) and (b) i was unable to access it anyway!

video calling never took off because it was always too expensive and there werent enough people on it,i think i used it for novelty purposes about 3 times (mainly when a friend or relative got a 3g phone), if it was made the same price as a phone call then it would probably be more popular, especially with the younger generations.

still the free music clips, news, reviews, downloads and games have all made it worthwhile, what other operator offered things like this free? it really is free to browse (their intranet content) still, you only have to pay if you want to get out and onto the rest of the internet.

Ben says:

Re: 3 customer

I find the arguemnt that 3 are OK because the ONLY thing wrong with them is that you have not been able to access the internet with your mobile is rather a strange attitude. From ym point of view the single major advantage of a 3G mobile network over a 2G one is the ability to access the internet at a reasonable speed. Yeah full websites are a bit pointless but there are quite a few usefull mobile ones but more importantly there is more to the internet than the www. I want to send IMs, pick up my email, synchronise my diary and contacts with my work exchange server, make cheap voip calls over seas, listen to internet radio etc. I have always thought it was totally insane to launch a 3G mobile network where the only thing you could really do over and above a 2g was to make video calls or access overpriced “content” such as football video clips or music videos at £1.50($2.80 ish) a go. Thanks god after three and a half years they have finally pulled their head out of their arse and realised the blindingly obvious, 3G is ALL about mobile data.

3ster says:

I'm on 3

My package I get:-
200 phonecall minutes – Used
100 texts – Used
25 Picture texts – Don’t really use
25 mins of video calls – Never been useful
£5 of downloads – Don’t really use

The video calls are awful quality, hard to understand, antisocial (in an office environment), require the recipent to have a 3 video phone (no cross network possible). All this assuming that you (and your mate) have got a 3G signal.

The downloads are even worse. Nothing worth watching. The videos I do download can’t be played on my laptop. Not tried downloading music, but I can’t be arsed to browse through their slow menus to select a possible tune.

Picture messages only send thumbnail sized images. Useless.

The only reason I’m on 3 is for 200 free minutes for £15pm which I think is quite reasonable.

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