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3 to push VoIP and instant messaging

The UK's smallest operator intends to shift its focus away from content and towards the kinds of services discouraged by its rivals
Written by David Meyer, Contributor

The smallest mobile-phone operator in the UK, 3, is to heavily promote IP telephony and instant messaging on its network, its chief executive has said.

Speaking at a mobile-broadband roundtable on Tuesday, Kevin Russell said the operator was "not too focused on content right now" and was instead planning to attack its larger competitors by actively pushing the types of "disruptive" services from which they tend to shy away.

As 3 is small compared to the competition it has traditionally offered newer services in a bid to steal market share. A notable example was the X-Series launch in late 2006, when 3 partnered up with VoIP provider Skype at the same time as launching the UK's first "all-you-can-eat" mobile data tariff.

"Email, VoIP, instant messaging — these are areas we will push hard," said Russell. "[These are] communications services that go around the [traditional mobile voice and text] regime, so they are very appropriate for 3 to target. You can go down the music or TV paths but my personal view is that you have to simplify the focus of your business to get it right."

Most operators have traditionally tried to discourage the use of their mobile-broadband networks for VoIP, instant messaging (IM), and so on for reasons including network capacity and latency issues. It is widely accepted that operators are keen to avoid such services as they take away call and text-message revenue and put that traffic onto a flat-priced data network instead.

Some operators, such as T-Mobile, do allow VoIP and IM, but only at a higher-priced "tier" of service. However, Russell said it would be two to three years before 3 offered true VoIP; what 3 offers at the moment is a more traditional, circuit-switched voice connection with presence (the ability to tell whether someone else is "online" or not) provided via IP.

3's introduction of USB-connected mobile-broadband dongles for laptops has been a great success, Russell claimed. He said that, since they were launched by the operator five months ago, data traffic on 3's network has increased sevenfold. However, he claimed that 3 could "comfortably afford" the usage levels on the network, even though its mobile-broadband tariffs are aggressively priced, from £10 per month (for 1GB's usage).

However, Russell poured scorn on industry claims that mobile-broadband usage would overtake that of fixed-line broadband in 2012, reaching 70 to 90 percent of the market in 2015. "Technically speaking, I don't believe [mobile broadband] is as good as fixed," he said. "Its benefits come in flexibility and convenience, but I'm not going to bang a drum that says mobile will replace fixed. [Mobile broadband] is a new market."

The operator currently has mobile broadband, or HSPA, speeds of 3.6Mbps. According to Russell, it will upgrade its network to 7.2Mbps later this year and start upgrading that to 14.4Mbps late in 2009. Once known for its poor coverage, 3 significantly boosted its footprint in the UK by creating a "joint venture" network-sharing agreement with T-Mobile in December last year.

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