I just received a shiny new Nokia 6680 phone from Three Ireland on Friday. Nice phone, OK price for calls. The thing that appealed to me when I was ordering it was that I would be able to use it to keep an eye on my email and do a little light web browsing. But it turns out that Three don’t let you use the phone that way, so I’m returning it.
Three doesn’t allow users to access the Internet from their shiny new broadband phones. I rang up the call centre to check on this, and they confirmed that Internet access isn’t a service they offer. They can only access the things that Three has decided customers should be allowed to access. The main services are games, pop videos, lightweight news services and maybe a bit of soft porn. Funnily enough, these are all things that you have to pay extra for, sooner or later. I can’t see them appealing to anyone except teenagers who like spending their parents’ money and patients in hospitals with no televisions.
It should go without saying that every other mobile operator in the UK and Ireland offers Internet access. Three is the sole exception.
Not a lot of interest to me I’m afraid. I’d rather be able to access Google and check out the odd serious site, maybe read some RSS feeds, post to weblogs, maybe start a photoblog. It’s not just that I’m boring. I just need to be able to justify the purchase of a nice, fairly expensive phone with the ability to do something useful.
Still, it is a nice phone. The camera seems pretty good (it’s even got a flash, which is amazing) and the video features seems to be workable. There’s a nice bright screen. The keyboard is pretty good, even for typing, when you get the hang of it.
Three Ireland also seems like a pretty decent network. Now, I only really checked it around my own area in Dublin 2, and I didn’t go into any big buildings, but it seemed very good. The voice quality seemed that bit better than what I’m used to on Vodafone, but that could be to do with the phone. I was also impressed with the speed and quality of the video downloads. It’s not like television, but the downloads happen pretty quick. (Of course, these things always work well on a brand new network with few users. The key is to keep the quality good as the number of customers increases.)
So, with all this work done, and with so much money spent sending out fancy phones, why won’t Three Ireland let paying users do what they like on their expensive mobile phones. I’ve done some research on it, and this is what I found out.
(But first, something I should explain before we go on. ‘Three’ is a company known by many names, and it can be very confusing. The main names used are: ‘Three’, ‘3’, ‘3 Ireland’, ‘Three Ireland’, ‘Hutchison 3G’, ‘Hutchison Whampoa’ and ‘Hutchison’. To the people who know it well, it is known as ‘Hutch’.)
Gareth Jones (Hutch’s COO in the UK) says:
“People don’t want open access, that’s not what our customers tell us they want. Anyone in their right mind who tries to do anything on the Internet with a screen that size has to be nuts.”
(according to report in I-mode strategy)
So not only will these guys not give me the service I want and am prepared to pay for now the boss guy is saying I’m nuts.
Of course, Three customers in Australia don’t have to put up with this nonsense. Apparently they can access the Internet if they want to. But different rules apply on this side of the planet, apparently.
The same guy spouted more similar rubbish to an Irish publication, Silicon Republic
3’s content proposition differs from existing Irish operators in offering its customers a ‘walled garden’, a controlled environment rather than open access to the internet. “Some 80pc of what you can do on the internet [with a mobile device] is unusable,” according to Jones. “Our services will work and they’re protected. But it’s not a walled garden because if people tell us what they want we’ll try to put it up there for them.”
3 has affiliated ‘managed’ sites, such a Footballs 365, that are available to its customers. He says there is irrefutable evidence that ‘real people’ only to go to four or five sites and warns that a more open network will only encourage viruses. “They are here and they’ll get worse. You try going back to your operator and telling them you’ve got a ruined €500 PDA. They will want nothing to do with you. The way we do it is a responsible stance from a mobile operator.”
Where does this guy get off? What does this irrefutable evidence he has have anything to do with the current issue? If he is so worried about viruses, then why doesn’t he ban email and MMS from being sent to Three mobile phones as well? Since Gary thinks a mobile company should take responsibility for what happens on phones, will Hutch also be taking responsibility for premium SMS scams and overcharging?
There are some harsh home truths that Hutchison and its shareholders need to hear:
1. The content Hutch offers is basically crap. I haven’t gone through and viewed it all, but it’s clear that it’s mostly repurposed from tired old media sources in the UK and US. It’s forced, derivative, aimless. It is just an agglomeration of brands. There is no plan. There is nothing remotely comprehensive about it. There is no strategy, no shape. It is grossly overpriced (how is it worth two euros to see a Dido promotional video, which can be seen for free on MTV?).
2. The Hutchison business model is all mixed up. Hutch thinks it can make money in content, but it will never be a ‘content’ business like News International or Time Warner. It’s just not structured in an appropriate way. The only ways it will make money is by shifting packets, carrying voice calls and (possibly) mediating payments. This is the model that i-mode has followed in Japan. It worked there, so get with the program.
3. Hutchison needs to start doing what its paying customers want, not what its management consultants tells it. You can’t tell people what they can and can’t do with their phones. It’s their phone, it’s their money. The future is in open standards and open frontiers. ‘Walled gardens’, closed networks and restrictive practices are things of the past.
4. Hutchison isn’t an innovative content and product company, and it probably never will be. It’s an investment company that rolls out networks. Phone users will be a lot more innovative with coming up with uses for the Hutch network than Hutch itself will ever be.
There are other problems in Three Ireland too. Their market entry strategy is a load of rubbish. The way they’ve designed their price plans, the service has been made unappealing to just about everyone. They have no pre-pay offer, so they’ve missed the Yoof market (who just might be willing to pay the money to watch that Dido video). Their price packages are really only attractive to heavy users (there’s a minimum spend of EUR 25/month). However, serious business users aren’t going to be prepared to move to such an immature network at such an early stage. I originally thought that Three Ireland was trying to appeal to ‘early adopters’, but by ruling out Internet access, they’ve ruled out that marketplace too.
The launch, which was targeted at business journalists didn’t really make an impact. Hutchison claims to see itself as a ‘value’ network, rather than a cheap network, but the only thing the company is offering that is attractive is cheap voice calls.
This is all having an impact on the P+L. The last time I checked, Hutchison was building up losses at a rate of knots (the company had a loss of USD 2.3 billion in 2004). This loss doesn’t include the major investment in the new networks (EUR 200m in Ireland alone). The way things are going, this burn is going to continue for quite a while.
And Gary Jones is out there telling journalists that ex-customers like me are nuts. I wish him luck. My search for a new mobile phone operator continues.
Disclosure: I provide limited consulting services to another company entering the Irish mobile marketplace. (But I would have written the above even if I weren’t.)