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Three Flagging in UK's Mobile Network Race
Smallest Network Claims Bigger Players are Freezing it Out

The UK’s smallest network operator, Three, seems more poorly named by the day. Lately, the forth-largest provider is lucky to be in the race at all.

Last week the provider formally complained to the European Commission that a mobile commerce deal between its rivals was anti-competitive. Earlier in the week, the company had expressed a similar sentiment in response to a delay in Ofcom’s auction of the UK’s 4G spectrum. The charge of shutting down competition is a critical one in the UK market where just three providers - Everything Everywhere, Telefonica-owned O2 and Vodafone – take up 90% of the market.

Three is owned by Hutchinson so it hardly lacks expertise or financial clout yet, seven years after coming to the UK, the network is still very much the underdog. That reputation doesn’t seem to be proving a problem at the moment., however Three are attracting smartphone users in their droves by offering far higher data allowances than their rivals. Despite signing up with Apple later than its rivals, the provider now sells 30% of all new iPhones.


But there’s a flip-side. It’s those same high data usage consumers that would be willing to leave if the provider is locked out of participation in m-commerce or, worse, fails to get a fair shot at offering 4G. The provider's exclusion is most explicit in the case of the mobile commerce deal. In June, the three big networks announced that they’d be working together on two major mobile revenue streams: payment systems and advertising.

"The planned and explicit exclusion of Three from the proposed UK m-commerce joint venture is designed to weaken Three's ability to be a competitive force in the UK,” said Three's regulatory affairs director, Stephen Lerner. Other providers counter that Three is not big enough to count on the issue and will, in any case, be able to take advantage of m-commerce devices at their release. Cold comfort in a business with so much staked on technological, and monetizing, innovation.

Announcing that the UK’s 4G spectrum would be auctioned off, the communications regulator, Ofcom, said that the auction was, "critical to the future of the UK mobile telecommunications market… [and] of significant importance to the wider economy." Now that critical auction has been delayed. Instead of taking place in early 2012, as planned, the sell-off has been set back to mid 2013. The auction is just as critical to the survival of Three which was significantly disadvantaged earlier in the year by the regulator’s decision to dole out extra 2G spectrum for 3G use.

The re-use of 2G primarily benefited O2 and Vodafone, leaving Three and Everything Everywhere at somewhat of a disadvantage. Ofcom deny that the new auction date is a significant departure. Earlier this week, they described the 2012 deadline as “always ambitious” and pointed out that the change leaves the rollout date for 4G services unchanged. In theory, then, consumers aren’t losing out on anything. That theory only holds as long as Ofcom hold the reigns on their spectrum auction, though, and, right now, that’s in doubt.

Telefonica-owned O2 have taken concerns about the regulator ‘s handling of the auction to the ever-busy office of the EU’s competition commission. Their reasoning is comically opposed to Three’s concerns: O2 argue that restricting the amount of spectrum any one company can buy constitutes a state aid. If the EU agree, it’ll be more difficult than ever for Three to get a foothold in the market and the network's boom in users seems to suggest that the UK would be much poorer for that.

Julia Kukiewicz edits consumer site, Choose, which covers the cheapest broadband as well as premium deals such as BT Infinity.
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winsyrstrife
River City Bounce
Premium Member
join:2002-04-30
Brooklyn, NY

winsyrstrife

Premium Member

Who's on 4th?

Costello: Oh look, 3 is 4.
Abbot: What are you talking about you idiot?! Everyone knows 3 is 3.
Costello: Isn't that obvious?
Abbot: You just said 3 is 4!
Costello: I know what I said. See for yourself, 3 is 4.
Abbot: OK...3 is 4.
Costello: And now, 3 wants 4G.
Abbot: YOU ALREADY SAID THEY'RE 4!!, and don't call me G.
axus
join:2001-06-18
Washington, DC

axus

Member

Interesting

Good info, but what exactly are the plans for m-commerce? It's something that 3 companies are developing themselves, without government help?

If the information isn't shared, if three companies are colluding on some shared proprietary standard, that is anti-competitive behavior. Based on what you wrote, I get the impression that the information will be shared, but "3" wants a hand in writing the standard, and presumably vetoing things it doesn't like. Forcing that to happen seems like too much regulation for something the government isn't developing itself.

I'd say the right thing to do is give "3" an ear into the meetings, to know what's going on, but I don't see what right they have to make decisions for people who don't want them to.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: Interesting

m-commerce is about digital downloads. here is the email my company got back from the Company the Big 3 has teamed up with:

Thank you for your recent BilltoMobile inquiry. I have reviewed your website. When you have a moment, can you please send me a product description of the item(s) that you would like to use BilltoMobile? Please note that direct to carrier billing is approved for online digital content (no physical goods) per the carriers. Thanks!

Kassandra Shoreland

BilltoMobile

Merchant Sales Manager

So it's just a digital wallet basically what you can already do with the carriers and the Android market place- you can bill your purchases directly to your phone bill.

sk1939
Premium Member
join:2010-10-23
Frederick, MD

sk1939

Premium Member

Re: Interesting

So this is a new development which we don't even have in the US and is still behind Japan's billing technology.
hottboiinnc4
ME
join:2003-10-15
Cleveland, OH

hottboiinnc4

Member

Re: Interesting

same basic thing.