3 takes a One Plan gamble on voice

3 has launched a new tariff called the One Plan, which includes thousands of minutes per month of calls to other networks.

The tariff is a consumer proposition, so not the sort of thing we usually pay much attention to around ZD Towers, but its backstory is interesting — if you're into the long-running mobile termination rates (MTRs) story.

First, the tariff: 2,000 any network minutes, 5,000 3-to-3 minutes, 5,000 texts and 1GB of data, for £25 a month on a year's SIM-only contract and also available in a variety of different permutations, depending on contract length, subsidised handset and so on.

That's a lot of minutes (perhaps a nonsensically huge number) and here's the thing: 3 says it's only doing this because MTRs should tumble from 4.3p a minute to 0.5p a minute in March next year. Because 3 is the permanent underdog in the UK mobile market, this cut acts in its favour — the current system sees it paying out a lot more for its customers calling phones on other networks than it gets from customers of other networks calling 3 phones.

"I am clear that termination rates are going to come down," 3 CEO Kevin Russell said at a rather eventful Thursday morning media briefing. "We're going early — we're not going to wait nine months for reduced termination rates to come in. It's important for us to go hard and go hard now."

"At a strategic level it's a big deal for us," Russell added. "We're going back into the heart of the contract market — £25 and above. We're going to go head-to-head with the big guys here." He added that he still wants to see termination rates come down to 0.25p — an eventuality that would probably greatly please BT, the other great loser in the current MTR set-up.

It's hard to tell how this will work out for 3. On the one hand, they're talking about levels of minutes that are unlikely to be used in practice, and the offer could bring in many new customers; on the other, the company is going to shell out an awful lot in MTRs in the next nine months if people really do reach those limits.

Either way, 3 feels it has to do something about its voice revenue. Russell displayed a graph of the operator's voice and data revenues, showing the latter to be wildly accelerating upwards — he reckons 3's network carries half of all mobile data in the UK right now — but also showing voice to be utterly flat over the past couple of years. Now we know how 3 intends to change this trend.

PS - Vodafone, which stands to lose out in the new MTR regime, has a somewhat different take on things...