3 is opening up two new areas for growth that it has previously shunned: prepay and virtual networks.
Its incursions into wholesale have been restricted to just Gamma Telecom so far, a long way behind its rival network operators, which have portfolios of MVNO partners.
Sales and marketing director Marc Allera has big plans for the operator, as 3’s parent company, Hutchison Whampoa, recently declared it would break into profit for the first time.
Allera (pictured) has reshuffled his team, with roles reflecting the new focus on virtual networks.
3’s head of retail strategy, David Bickett, has been appointed as business development director and will be responsible for the team focusing on wholesale markets. The size of the team ‘will depend on the number of MVNOs we get’, Allera tells Mobile.
He has also appointed Deborah Corless in the new role of director of customer management, replacing Fergal Walker, head of propositions. O2’s Amanda Lambert has recently taken on Allera’s previous role of sales director.
Allera says: ‘We have a new team – wholesale and business development. We will be seeking out more MVNOs and we’ve got several in the pipeline.’
He talks of ‘a number of exciting opportunities’, adding: ‘We will be looking at mobile broadband, new channels and new distribution routes in 2009. If you look at prepay – grocery chains are selling mobile broadband – there are opportunities.
Return to prepay
Allera adds: ‘Sainsbury’s is selling mobile broadband – it was a niche product and now there are two and a half million mobile broadband customers. We have one million, so we are number one in this market.’
3’s return to the prepay market comes after an alarming experience in its early days, when its highly subsidised handsets were box broken on a worrying scale.
The operator had always struggled to make 3G handsets attractive at prepay prices. As more handsets become available for under £100, Allera believes it is time to go back into the market.
Prepay for 3 was limited to INQ and Skype handsets in 2008. The network is expected to release a raft of prepay handsets over the coming months, priced between £50 and £80. The INQ phone is currently £79.99.
Allera says: ‘We are seeing very encouraging figures that mobile internet has taken off on handsets, and we focus on giving the customer a great experience. For example, 65% of INQ customers use Facebook.’
3 also has a role to play in the Government’s plans to bring 2MB broadband access to all by 2012, as revealed in its Digital Britain report.
3’s network share deal with T-Mobile is gathering momentum and was key in the considerable 66% cost reduction that the operator saw in 2008. Allera says: ‘We are now focused on building Britain’s biggest broadband network to allow access to a “best in class” connection.’
Allera says 3 has given broadband access ‘to towns up and down the country’, citing Lossiemouth in Scotland as an example of a small town that now has 3G coverage.
He says: ‘We are very excited about the role we can play in Digital Britain and we believe mobile broadband is part of that. Every day 10,000 more people are getting broadband coverage. We have consolidated with T-Mobile, doubling the size of the network.’
He also highlights the decreasing margins of rivals as they cut customers’ bills to halt churn.
Allera adds: ‘Keep an eye on prepay mobile broadband. We are looking at Sim-only, but we view it as a time bomb. The margin dilution impact is a huge take for an incumbent, but for us the risk is less. As an industry, it will be interesting to watch.’