Three: Public image has turned a corner

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CEO Dyson says network’s reputation has improved and it’s now first for customer service 

Three claims the poor public perception of its network quality and customer service is now a thing of the past.

The comments were made by Three CEO David Dyson (pictured), who was speaking at the operator’s latest business update in central London this month.

Dyson explained how Three has been working hard to counteract criticism of these areas of the business and has now “turned the corner”.

Dyson quoted the results of a recent YouGov survey, carried out in March, which measured the performance of each of the UK mobile networks.

Three was rated first for overall customer service and for tablets and was second, behind O2, for smartphones. In April, it was rated first for mobile broadband. Dyson claimed the company retained these positions in Q1.

He also explained how Three has been working with the ResponseTek telco call centre to contact its customers, asking them to rate its network on a scale of 0-9. He claims the results from February showed almost a quarter (24 per cent) of those questioned gave it full marks, with more than half (52 per cent) awarding it a score of seven or above.

Dyson said: “There is a gap between market perception and real-life customer experience that we have worked hard to address. Historically, there may have been issues where customers have not had the best experience, as our network certainly wasn’t where it needed to be, but we have started to address those.

“There is a combination of data which suggests we have started to turn the corner in terms of customer experience.

“Historically, we have struggled in terms of quality, but there is now a significant gap between perception and reality with customer service levels. We can change and build on the perception as to where we are.”

Three was also deemed to provide the best customer experience for iPhone users in Q1 this year, having been voted second in Q3 2011.

“Our iPhone customers are telling us they’re getting a much better experience or they’re enjoying the service more than iPhone customers on other networks.”

Network strength

The increase in customer satisfaction can be attributed to the increasing strength of Three’s network, according to Dyson.

Three initially shared its network with T-Mobile, and currently has 12,600 sites nationwide. With the formation of Everything Everywhere, Three is now working with Orange to increase that number. Orange has around 11,000 sites and, as with the process it completed with T-Mobile,

Dyson said Three is taking the best sites and bringing them into the shared network. Orange will then decommission all of the surplus sites. This will result in Three having around 18,000 sites in 2015.

Dyson said most of these 18,000 sites have already been built, but they now need to be integrated into the network

He said: “To fuel our growth, we have to have the right network, both in terms of quality and cost structure.

“This is already the best network in the country and it’s only going to get better. We want to sustain that but we are just as focused on cost structure so that we can remain competitive.

“The biggest factor in this shift change in customer experience has been the network. These positive results start with providing a rock-solid network that provides a good-quality data experience.

“When customers have network problems they tend to be the hardest issues to resolve, so having that solid network foundation in place where people don’t need to call and ask questions is a really strong pillar to improving performance.”

Customer increase

Three chief financial officer Richard Woodward said the operator’s increasing contract customer base and decreasing churn levels also show it is achieving its customer satisfaction aims, claiming the latter puts it on a par with its operator competitors.

In the second half of last year, Three added 425,000 contract customers – just over double the 207,000 subscribers it added in the first half of the year. Overall, it added 651,000 contract customers and 615,000 prepay subscribers in 2011.

In the first three months of this year, the operator added 182,000 contract customers, again more than double the 84,000 subscribers sequentially. It now has a total customer base of 8.1 million subscribers and has set itself a target of having 10 million customers by 2015.

Contract churn has also halved in the past two years, from 2.3 per cent in the first half of 2010 to 1.1 per cent in the first quarter of this year. This is a fall of 0.3 percentage points from the second half of 2011.

Smartphone sales accounted for nearly all handsets (99 per cent) bought in January as opposed to 43 per cent two years earlier.

Woodward said: “We’re starting to see the shift in momentum, and there is definitely a change in the way our business is growing. There is a huge shift towards high-end devices and data-centric tariffs, with the One Plan being a very significant tariff for us.

“Getting the iPhone in July 2010 was a big driver for growth and retention and, in addition, having the right tariffs and other devices has also helped this too. We’ve now got to a position in churn that is absolutely among the best in the market.”

According to Dyson, Three’s focus on data and unlimited usage through ‘One Plan’ and ‘Ultimate Internet Plan’ is starting to pay dividends, as that is the direction the consumer market is shifting towards.

He said in line with Three’s improving performance, financial losses are no longer a worry and it has proved it has shifted away from the negative market perception of five years ago, when its customer service was regarded as the worst in the industry.

“Nine years after we launched, it feels our time has finally come. We’re having increasing influence on the market, and that is around consumer demand. Data is now mass-market and more people want high-quality data at the right price.

“The financial performance is no longer a drag for us. We have been a loss-making company historically, but we’ve proven in the past year that we can grow strongly financially and keep our head above water, which is always a challenge for mobile operators.

“You won’t see a huge advertising campaign pushing the brand. We’re going to ensure our customers get the best possible end-to-end experience, and hope they become advocates of our brand.

“They should be our best opportunity to convince people that have a different perception of us that if you take a chance, you’ll end up on the best network.

“The market is shifting in our favour. It’s about execution and staying ahead of the game. I’m confident the trends we have seen will continue.

“It’s about having the right products and tariffs and our unlimited data proposition gives customers fear-free usage of the handset. It means they get more out of it than on other networks.

“We want them to enjoy the smartphone for what it is capable of, and we’re ensuring that they don’t feel constrained in what they do. “

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