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Third Generation Network, First Generation Strategy: My short experience with Hutchison 3G

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.”

(Silicon Republic Article)

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.)

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  1. Most people don’t actually want Internet Access on their phones. The vast majority of people want to make phone calls, and send texts, and maybe get some funky ringtones or text alerts.

    You’re rant is great and all, and 3 probably isn’t for me, but saying that it’s the cause of all their woes is ridiculous.

    He is right. People who want to use 3 are the exception rather than the rule, and you don’t base a business on exceptions.

    “the only thing the company is offering that is attractive is cheap voice calls.”

    Offering a good rate on it’s core-business – that’s a big deal, you make it sound trivial.

  2. No, I agree, cheap calls are important. The reason I make a point of it is that in the Silicon Republic article linked in the article the company makes it clear that they don’t want to be viewed as a ‘cheap’ alternative, some sort of budget operator. But in practice, that’s all they are.

    I agree that most people don’t want to access data services at all and that voice and text are what really matter.

    However, the whole point of having a fancy phone like the 6680 (with an RRP of around 600 euros) is to be able to take advantage of web-based features and network apps. If customers can’t use them, what’s the point in wasting all that money? Obviously they don’t view early adopters as simply being exceptions.

    It isn’t just this one thing that will cause issues for them. It’s a combination of things.

    In particular, I think the lack of a pre-pay offering or low-cost billpay option (important for cost-sensitive users), combined with the lack of Internet access for early adopters, combined with the fact that heavy business users will be unwilling to rely on such a new network is going to make things very difficult for them in the short term. The annoying thing is that there’s no real sense to it.


  3. Hutchison needs to start doing what its paying customers want, not what its management consultants tells it … Phone users will be a lot more innovative with coming up with uses for the Hutch network than Hutch itself will ever be

    Antoin, I couldn’t agree more – this is why I recommended that 3 Ireland start a blog (

    If they had a blog they could listen to their customers and potential customers directly and learn from them what they are doing wrong and what they are doing right.

    This ability to learn from your customers is what makes business blogging a revolutionary technology for those businesses who embrace it.

  4. Good article. Interesting to see what the customer experience with 3 is like.

    Its amazing that they dont offer internet access. In my opinion wireless portable internet is going to be huge over the next few years. Be it business men with PDAs or kids with Sony PSPs. All 3 is doing is forcing customers to carry a second device. Some may do that, but many will switch networks.

    Selling downloads of music videos for 2 euros yet failing to provide a pre-pay offer is another mistake. The people who will download the latest Dido video are kids who get pre-pay phones from their parents.

  5. Antoin — agreed with you on this one.

    It’s funny, I can’t recall anyone seriously proposing the ‘walled garden’ in the past 5 years, until hearing this. I thought that one had gone down with Compuserve. Even AOL is a front-end on the ‘net these days…

    BTW I should note that in general, the European outlook on using the net from the mobile phone seems to be all wrong. One thing the US phones are doing well now is internet integration; my current provider, Cingular GSM, have seamless integration between SMS on the phone and AOL instant messenger — I can AIM message people from the phone, and they can reply, gatewayed to SMS. it’s a really fantastic, killer feature, and one I haven’t heard of at home.

  6. So I got a call from the contact centre in Three today, asking why I’d sent the phone back. So I told ’em most of the above.

  7. I’ve been looking at changing from vodafone for a
    while – but have been caught because my home address does’nt have 02/Meteor Coverage. I’m considering changing to three because one big plus that Three has is that they have 2G net roaming with vodafone – so at a minimum your coverage is as good as vodafone – Secondly their prices for a user who has a 100 or more spend a month for vodafone bill pay means at least a 50% saving on voice (roughly)
    Meteor are by far and away the cheapest for voice calls at the moment however they don’t have a 3G licence – three have a big plus in the fact that video calls and voice cost the same.
    The only thing stopping me from moving straight away is that the number portability is’nt set up properly yet.
    As a vodafone customer who has gotten nothing from vodafone except expensive bills for the last 10 years – I would encourage everyone to change – As to which operator – I would say Meteor or Three – at least in the cases of these two they are competing somewhat on price.
    The sooner everyone starts moving to the operators that are trying to be competitive on price – the sooner that we’ll get reasonable call charges in Ireland.

  8. Europe : 3, the UK’s first video mobile network, today announced the launch of two new services to deliver a high quality mobile internet experience. From mid-September customers on 3 will be able to sign up to the two new services ‘Mobile Web’ and the ‘Wireless Web’.

    Mobile Web
    The 3 Mobile Web service will enable customers to visit hundreds of the internet’s most popular sites direct from their video mobiles while ensuring a high quality viewing experience. For a flat rate of just £2.50 per month, customers with a contract on 3 will be able to download up to 5 MegaBytes of content, or an average of 500 pages each month from the ‘Mobile Web’, depending on the richness of the page.

    The ‘Mobile Web’ significantly extends 3’s service for customers, by offering them access to websites that are optimised for viewing on compatible video mobiles. This means the customer can be sure that both front pages and sub-pages are viewable, that the speed of download is high and that all the site’s key activities are available.

    3 expects the number of sites accessible through the ‘Mobile Web’ to grow quickly as more sites are optimised and has invited customers to nominate sites they would like to access from their mobiles.

    Gareth Jones, COO of 3, said: “We are about offering the best of the web on mobile and ensuring the customer experience. Currently only a fraction of the internet works well on mobile – but the good news is that many of the UK’s most popular sites, including the BBC, eBay and Amazon have now been optimised. We are committed to extending the choice of high-quality video mobile services – this service means the best of internet is now available to our customers over their mobiles.

    He added: “This is a two-way street, we have over three million customers and we want our customers’ help – we’re asking them to nominate what sites they want and we’ll check whether they make sense on mobile. We expect to add hundreds more over the coming months.”

    3 will continue to offer services directly through its ‘Today on 3’ entertainment channel, as well as via a range of sites managed by partners such as and FHM – which offer a bespoke mobile experience. All 3 customers also have a unique 3 email address and access to off-portal content via video shortcodes.

    Wireless Web
    ‘Wireless Web’ will be available on 3 from mid-September to provide open internet access for customers with laptops, using their 3 handset as a modem.

    For customers with a contract on 3, the Wireless Web provides internet access at a flat rate of £45 per month, under this price plan customers will be able to download up to 512 MegaBytes of data.

    Graeme Oxby, Marketing Director of 3 UK said: “For the mobile worker, the Wireless Web offers an unbeatable service to all our customers who currently have a contract on 3. Like all 3’s products and services, we’ve designed Wireless Web to be simple and easy to understand. It is simply priced, offering great value, simply packaged and as we have the best 3G coverage, we believe it is simply the best for service.”

  9. I agree with all of the above and what is even worse is that if you are outside of the video service area you have no web access at all, so you cant get to see even text only articles in the news for example. I have also found that when not in 3G area and presumably served by Vodafone, the voice quality is actually really poor.
    I’m sending my phone back , which is a shame as it is a nice phone (Motorola) aand the €25 a month for 200 minutes is a good deal

  10. Dear sir,

    i want to use 3g mobile in chennai how can i go for the network is that service provided in ur network. pls do the needful to use the system.

  11. hey guys anyone tried to configure a european phone to connect to AOL, msn or yahoo messenger without their phone service integrating it by monkeying with the phone internet settings? anyone know what the settings and servers are to hook it up?

  12. I would recommend some one to start a blog in Chennai too. We happen to have a lot of network blocks which doesnt allow people to make outgoing as well as receive incoming calls.

  13. I have just today got myself a Nokia 6280 on 3 Ireland prepay and discovered that I cannot use the phone to surf the web. Which is what I thought a 3G phone was all about.

    I am really annoyed at this. I am wondering though if anyone has tried installing Opera Mini Web browser (by running the .jar files from the SD card) on the phone to see if this will bypass the 3 walled garden approach??

    Please let me know.

  14. I don’t think this will make any difference. It’s cut off at the network level. You might be able to figure out a way to get it to work through a proxy, but it’s tricky.