3 sets out new service model


3 UK and VoIP provider Skype gathered UK press together last week to announce how they will change the way the mobile industry provides and charges for services to customers. That was how the pair sold it to the media, anyway.

3, playing catch up in the UK market by portraying itself as consumer champion, claims the mobile industry is no longer serving customers’ needs, and should move away from upfront service fees to deploy mobile data functions  in new ways.

So, 3 has made Skype calls free to customers in a move that runs contrary to its rivals’ policy on mobile VoIP traffic

Customers with a 3 SIM card and a Skype-enabled 3G handset, will be able to make free Skype-to-Skype calls and instant messages without being required to sign up to a monthly subscription or to top-up their prepay account.

3 is offering the Skype calls free of any data charges or airtime payments. Customers will be required to buy a 3 SIM card only, usable with any unlocked 3G device.

VoIP providers, represented by the Voice on the Net (VON) coalition, last month urged European leaders to allow mobile customers unrestricted access to mobile VoIP services, following T-Mobile’s move to block Skype on Apple iPhones in Germany.

T-Mobile Germany’s action was the latest in a string of blockages by incumbent providers against mobile VoIP services in the UK and Europe. 3, Skype and VON argue such anticompetitive behaviour by old guard network operators denies punters natural choice.

Skype claims customer demand is through the roof. Its Skype application for the Apple iPhone and iPod Touch was downloaded by one million customers within 36 hours of its release on April 1, and two million within 14 days of launch.

Skype also claims to be running on 10 per cent of iPhones on the street, and ranks as the number one download on Apple’s App Store in 40 markets, including Japan, the US and the UK.

3 UK chief executive Kevin Russell (pictured), as head of a challenger brand, is outspoken on regulatory and legacy issues within the industry anyway.

He reckons the market is led by “artificial” rules on pricing, governed by mobile termination rates, and held back by inertia around number porting. Where regulatory reform has passed, Russell has looked to pass on costs to consumers, he maintains.

He is frustrated by rivals’ protectionist attitude and lack of ambition for data communications; the very reason network providers paid out billions for 3G licences in the first place.

With the Skype initiative, Russell claims 3 will force and drag the industry “kicking and screaming” in to a new era for mobile data, which will properly “open up” the internet and create substantial new data revenue streams while traditional voice is commodotised further.

Russell’s intention has been, since taking the job as head of 3 UK two years ago, to challenge the UK market status quo, and to grow 3’s share of the UK market in the process. The Skype deal goes a significant way to disrupting the applecart, he points out.

“We are different. We are here to challenge and change this market; we have the flexibility to do it because we are out there to grow market share and get customers. We are in this fortuitous position where our growth is fuelled by customers coming to us,” explains Russell.

“We are pushing hard to see termination rates lowered or to disappear and we as a business will push and adopt aggressively services that can move the market place towards an internet-based model like Skype.
“My perennial frustration is, as an industry, our inability or reluctance to capture those opportunities in mobile, and to quite frankly replicate in mobile, out and about, what can be done on a PC.”

Full article in Mobile News issue 438 (May 4, 2009).

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