Consumer clamour is set to drive the roll-out of Three’s 4G network, as it looks to bring next generation services to cities with the greatest demand.
The operator is earmarking a fourth quarter roll-out of 4G to supplement its existing Ultrafast proposition, which is a dual-carrier HSDPA network. Three is set to have a chunk of 1800MHz spectrum transferred to it by the end of September 2013, in addition to the 800MHz spectrum it bought during the recent 4G auction.
CEO David Dyson said it would hold fire until its rivals bring their own 4G offers to market within the coming months before implementing 4G. Dyson has previously promised that it will offer an unlimited 4G data deal at no extra cost, in a move that flies in the face of its three larger rivals. He said: ‘We don’t necessarily see a need to rush into launching LTE. The first test will be to see how LTE is positioned by O2 and Vodafone and then see how quickly we want to run. We can move fast if we want to. I’m fairly relaxed about it.’
Three was criticised by EE CEO Olaf Swantee in February when he told Mobile he felt its rival’s Ultrafast network ran the risk of ‘confusing’ consumers. Dyson said the network had an education job to do to raise awareness of how the Ultrafast network would work in practice. He said: ‘It will take time to build in the same way that customers’ understanding of 4G is not particularly clear. It’s a new terminology. What we have tried to do with Ultrafast is simplify a landscape that is quite confusing.’
Raising awareness is at the centre of Three’s plans to post its third consecutive yearly profit, after reporting 2012 earnings of £101m. Dyson said the operator’s recent ‘Keep on Internetting’ television campaign, which popularised a moonwalking pony (pictured, above), has been watched around 6 million times on YouTube, and was a means of raising its profile.
He said: ‘From a brand perspective we were last into the market so we are always playing catch up… What we have tried to do is get more on the front foot. We are trying to get people’s awareness of Three and what we do [increased]. We are doing pretty well on that score, as a business of data hungry customers that is more than a niche group of early adopters. We want customers to talk more positively about Three. That’s important in order to continue to grow.’
Meanwhile, the operator said it would look to grow its prepay base, after the sector experienced market-bucking growth. Its base increased by 2% during 2012, with customers opting for SIM-only deals that were used in existing handsets. Chief financial officer Richard Woodward said: ‘Although the general trend is conversion of customers to low end contracts, we have scope to broaden that appeal to things like data rather than voice and text. It’s a key focus for us.’
Three’s customer base increased 11% to 9.1 million, driven by an 18% growth in contract customers. Service revenues were up 3% to £1.35bn.
Author: Graeme Neill