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X-Series pricing tests mobile broadband market

Analysts praise 3's pricing model, claiming it will be the first real test of whether people want the internet on their phones
Written by David Meyer, Contributor on

The low pricing of operator 3's mobile internet package makes it a litmus test for whether consumers really want such a service, a senior analyst has predicted.

3 announced the pricing for X-Series services on Friday, placing the basic Silver package at £5 per month and the premium Gold package — which adds on Slingbox place-shifted TV and Orb remote PC access software — at £10 per month. These tariffs are in addition to the price of the contract the user must have with 3, the lowest being £20 per month.

The service, which gives flat-rate access to a range of mobile broadband services, was announced two weeks ago, but pricing had been the unknown variable stopping analysts from wholeheartedly endorsing it.

Ovum's John Delaney told ZDNet UK on Friday that 3's pricing was "aggressive", but suggested that it may still be difficult to reach the mass market through a contract add-on.

"The mass market is pre-pay. In order to get the majority of the market onto something like this you would first need to persuade them to migrate from pre-pay to contract," said Delaney, who added that operators had always been largely unsuccessful in doing so.

However, Delaney also said that the deal would be "very attractive" to the contract sector because it compared favourably with alternatives such as T-Mobile's Web'n'Walk package — in which web applications are not as well configured to work "out of the box".

"We still don't really know for sure whether consumers want to be able to use the internet on their mobile phones in the same way they use it on their PCs," Delaney said. "What we've got with 3 is the nearest thing we've had to a test of that market. If their customers really want it, the other operators will certainly respond."

Analyst Dean Bubley of Disruptive Analysis was also enthusiastic about the pricing, saying it was lower than he had expected. However, Bubley pointed out that the level of subsidy offered by 3 on X-Series handsets would be another major factor if the cost of the phone means "you're spending an extra £150 quid than you would on another contract".

Both analysts reacted positively to the data limits imposed within the X-Series pricing plans. General surfing is limited to 1GB per month, which Delaney said would be "quite difficult to break" on a phone. Skype calls are limited to 5,000 minutes a month, Microsoft Live Messenger to 10,000 messages a month and — if you have the Gold package — Orb and Slingbox functionality to 80 hours a month.

However, 3 does discourage customers from using their X-Series handsets as modems for their PCs, so they can't be used as replacements for domestic ADSL lines.

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