[3GScottishUser]

From The Inquirer (26/11/2006):

ONLY DAYS after Canning Fok, CEO of Hutchison Whampoa, denied that its 3G mobile network, 3, was up for sale, it's been confirmed that 3 is to sack about 130 managers in its UK operation.

According to a report in The Mail on Sunday the redundancies would amount to around 15 per cent of the company's total workforce.

Putting a brave face on it, a 3 spokesman told the newspaper that, "Following our annual planning process, 3 will actually employ more people in 2007 than this year."

The newspaper is adamant that disposing of the managers is a clear sign that the company is actually up for sale, saying that 3's employees are now even more convinced of the fact.

Obviously there's speculation as to who might actually buy 3 –especially since Vodafone CEO, Arun Sarin, has publicly stated that he might be interested.

The Mail on Sunday is also tipping France Telecom/Orange and (even less likely) BT to acquire 3. However, given the recent remarks made by O2 chief, Peter Erskine, the INQ is tipping O2 as the most likely candidate.

Firstly because 3's 3G customerbase would make a nice fit with O2. But mainly because O2's parent, Telefonica, is doing really well and would almost certainly look favourably on the purchase.

By contrast, Sarin would probably have an uphill battle to convince his shareholders than purchasing another floundering network would add value to it UK operations.

http://www.theinquirer.net/default.aspx?article=35970

[3GScottishUser]

The Mail On Sunday Article (26/11/2006):

Mobile phone group 3 is to get rid of about 130 managers despite a bullish presentation only days ago by Canning Fok, chief executive of parent company Hutchison Whampoa.

Industry sources say the redundancies amount to around 15 per cent of the workforce at the company's headquarters in Maidenhead, Berkshire. One source said: 'There is an air of despondency at 3. Everyone fears for the future.'

The company has just launched a new package of phones and internet access amid great fanfare and Fok denied that the group was up for sale.

But insiders say that by sacking the managers, a clear message is being sent that the phone group is up for sale. 'We all know that 3 is struggling to keep customers,' the source said. 'The more they deny there is a sale, the less employees believe it.'

Vodafone boss Arun Sarin said he would be interested in buying the company if it was up for sale. Other potential buyers of UK assets include BT and Orange.

The company recently appointed Kevin Russell as deputy chief executive. Russell, who was previously in charge of the group's Australian arm, is expected to take over from chief executive Bob Fuller.

Some sources say that Fuller could go as soon as the New Year, though he is booked to make a speech at a major conference in February.

A 3 spokesman said: 'Following our annual planning process, 3 will actually employ more people in 2007 than this year, but I can confirm about 130 management jobs will go.'

http://www.mailonsunday.co.uk/pages/dmstandard/frame.html?in_bottom=http://www.thisismoney.com/news

[Hands0n]

Can anyone make a worse job of running 3 than Bob Fuller? It really is too soon to tell, but Kevin Russell has a job on his hands, picking up the pieces that are scattered all over the floor.

The biggest hurdle that any CEO of 3 has is to mitigate the constant damage that is inflicted upon 3's reputation by those gross inepts at 3's Mumbai call centre. 3 have placed a total reliance upon Mumbai to handle the mass of Customer Service business, this they do extremely badly. The entire CS attitude in India is a billion miles away from what is expected and required of in the UK. We do not appreciate the lofty "we couldn't care less now you've signed the contract" attitude. Almost anything beyond the scripted actions is guaranteed to end up in bitterness and failure with a compltely disaffected Customer. For almost four years 3 has presided over this shambolic state of affairs and done nothing about it. But they are astonished at their Customer attrition rates! It really does not take any kind of genius to spot that the Mumbai CS is a cancer in 3's corporate body.

So, I wish Kevin Russell well, and I bid Bob Fuller good riddance, go now, you really have nothing to say that is at all meaningful or required.

Kevin's honeymoon period will be short and not so sweet. He has but one shot at turning 3 around. Otherwise it'll be so badly off that even the vultures will fly past.

[3GScottishUser]

I think whatever happens history will judge that Bob Fuller was a victim of a number of circumstances rather than being the cause of his own demise.

The technology was flaky in the early days and head office made life more difficult by imposing customer service arrangements in Mumbai. Add to that the drought of handsets and the lack of competitive pre-pay models and it's quite remarkable that Bob managed to acquire over 3 million customers for 3 UK even allowing for the fact that he paid a huge sum for what he actually got!! The consumer market willl have made any venture into the business sector a mountain to climb and the changes in strategy from huge bundles of basic services to hybrid ones with emphisis on content will have confused customers and I doubt if Bob had much say in that.

3G has been a bad gamble for all the networks so far because there has been no 'killer application' found. That is a problem for them all but a huge one if thats all you have to sell and therein was the sad reality for Bob Fuller.

The UK has not been fertile for Hutchison 2nd time around. Rumours have surfaced about churn, poor service and HWL's partners did'nt hang around long when they saw where it was heading. KPN & NTT DoCoMo too a huge hit and left HWL with 3 UK and the costs to develop it. There have been a few crazy periods where you could get a free phone and free services for a year or an expensive pre-pay handset for virtually nothing but all of that nonsense simply piled on the agony that would inflate churn which would be blamed on 'poor quality customers' latterly. What was unique in 2003 and most of 2004 is available from all the networks in 2006 and beyond and Canning Fok knows that the window of opportunity has all but closed for HWL and 3 UK. Kevin might have a go again with capped tariffs borrowed from the Australian model but the genie is now well and truly out of the bottle and there are other dark clouds on the horizon including huge reductions in revenues thanks to Ofcom's 3G termination charge reductions.

3 UK have been in retreat for over a year. The network maintenance was outsourced to Ericcson and staff transfrerred. Commissions to dealers have been reduced and 3 is now scarce in multiples and they have little High Street presence as yet. Now managers are being culled. The signs point one way and the press and other networks sense the hardship and the stark reality that if HWL could'nt convince Italian investors to buy into 3 Italia which has twice the marlet share they have in the UK they have limited options, hense the speculation as the losses accumulate.

Will 3 UK exist beyond 2007? I doubt it and so do an increasing number of industry analysts and informed press speculators.

BTW, don't shed a tear for Bob Fuller. He will have a lucrative pension and severance and is not too old to turn up again after a break! Unlike most he probably does not need to consider working again but I bet he won't be able to stay away from commerce too long.... premature I know but in a way I hope he returns and we witness some of the flair he exhibited during his distinguished helmanship at Orange.