[3GScottishUser]

From This Is Money (10/12/2006):

Investment banking giant Goldman Sachs has approached potential buyers for mobile phone group 3, with a possible price tag of £6bn.

Corporate financier Simon Holden is understood to have held meetings with T-Mobile, O2 and other operators.

Highly placed industry sources say Hutchison Whampoa, 3's Hong Kong-based parent, might ditch the UK operation, which has four million customers but has been notably less successful than sister firms, including those in Italy and Australia.

China Mobile is said to be interested in buying the whole business.

Sources close to Hutchison said senior executives were aware of approaches, but a spokesman said: 'Goldman has no mandate to sell the business - 3 is not for sale.'

But one City source said: 'There was a meeting in Bonn just before Hutchison chief Canning Fok visited the UK to launch 3's latest mobile phones.

'There is no doubt this is happening. O2 also seems to have been approached very recently. No way could this go on without a nod, or at least a wink, from Hutchison.'

Holden, who was made a partner at Goldman in November, is a highly regarded deal-maker in the telecoms and media team in London. The sale of 3 or any part of it would be a highly sensitive transaction.

One source said: 'Fok and his boss tycoon Li Ka-shing have invested heavily in this firm, spending £4.2bn on the UK 3G licence alone. Hutch does not want to look like it is cutting and running.'

One theory is that some operators would like 3's 3G network.

Next year, all 3G licence holders must prove to telecoms regulator Ofcom that their networks cover 80% of the population.

http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=415482&in_page_id=3

[Hands0n]

One thing is for sure, when this kind of FUD is launched into the ether there is something most definitely up.

[Ben]

Things are starting to get interesting down on Planet 3 ;)

[3GScottishUser]

Aye ...... the last few weeks have seen way too much of this stuff for it to be complete speculation.

As they say..... there's no smoke without fire and it looks like things are getting hotter daily in Maidenhead!!

[3g-g]

Shall we make bets as to what happens?! I think we'll need to count getti out of any betting incase he has some insider knowledge! ;)

I'm thinking that none of the UK operators will make the purchase, they've spent enough on 3G networks, why would any of them want to fork out another £6bn for Three?

China Telecom could be an option, however I'm thinking one of the US operators, Sprint or Cingular possibly...

[3GScottishUser]

Fok & Sixt will be hard pushed to get £6 billion for 3 UK!! Mind you that would'nt even cover their outlay - ouch!!

I would'nt have ruled out an existing UK network simply doing the business just to get Huchison out of the market but as things are now they pose little threat to any of the big 4.

So who has got a spare £6 billion to buy 3 UK? It would need to be a company that could integrate the service and make some real savings otherwise there is a risk that a new owner would simply have the same problems HWL suffered from.

So who could raise the cash and could integrate the 3 service?

Here is a short list in no particular order.....

BT
Virgin Networks (NTL)
Orange
T-Mobile
Telefonica 02
Vodafone
TIM
Telia-Sonera
China Mobile
Cingular
Sprint

What odds would you place on the above 'runners'?

One thing is for sure.....the competition has started and the only certain loser is going to be HWL!!

[getti]

My personal fave would be for NTT DoCoMo to step into the frame IF it ever happens and that is IF.

[Hands0n]

We should not discount the Murdoch group - a mobile company would be a handy add-on for Sky Corp.

I think the 6Bn would be an easy price to get for what is a ready-made MNO-in-a-box operation. Implant your own management team and within a few weeks you've got the operation running to your style. Next would be the technical and marketing changes. Within a couple of months, maybe a few more, the entire show would be under the purchaser's branding and the actual technical integrations could occur.

This might all be too much for Sky to resist, if they've got the spare cash lying around somewhere.

[3GScottishUser]

My personal fave would be for NTT DoCoMo to step into the frame IF it ever happens and that is IF.

NTT DoCoMo got their fingers burnt badly with 3 UK and bailed out over a year ago. So did Holland's KPN. Can't see either of them wanting to get involoved again!

As for BSkyB.... maybe..... as it would give them another communications business that could fit well with their existing Satellite TV, Broadband and Landline business. BSkyB knows that competition is coming soon from VOD providers like BT Fusion and Ornage IPTV so they might be quite interested in ways to spread their activities and already have very efficient and experienced customer service staff in the UK.

Outwith the 4 incumbents my money is with BT who probably regret the sale of their wirless division (02). They are making a big effort to expand into content distribution and have tinkered with the MVNO model. They could definately justify the £6 billion and a High Street presence would be no bad thing for them as others bite into their market share.

All interesting stuff..... and I doubt if we will have too long to wait before 3 UK is 'under new management'.

[@NickyColman]

Out of all mentioned above, I think BSkyB would be the better option as a new Three owner! Sky are innovative, agressive, good value, and seem to have reliable services *touches wood and looks suspiciously at Sky+ box*.

I think if Three were to fall into the hands of Bt, then i doubt it would worry the Big 4. Bt didnt really do much with Bt Cellnet before they ditched it and it became O2. I cant see Bt acheiving any revolutionary tarrifs or numbers with Three branded as their own.

Same applies to Virgin Mobile (or Media). I think they would just swallow up Three and nothing more would be seen of them. Ive also got a question, if Virgin Media Mobile or whatever they call themselves, were to buy Three would they still be able to operate their MVNO on -T-Mobile? Effictively, the Virgin operation would span 3 networks - T-Mobile, O2 (Three's 2.5G network) and then Three? Would this violate any laws about competition? Also, hypothetically, if a Virgin 3G customer were to leave the "Three" 3G network, would they then be able to use -T-Mobile's 3G network?

Im confused now lol.

[3GScottishUser]

Hold On..... BT actually did well with Cellnet. It was one of the top two mobile companies for it's entire existance before it became inependent.

As for NTL, if they acquired 3 they would not use T-Mobile. They would simply continue the roaming agreements arranged by HWL with 02 and latterly Orange UK. They would probably have to migrate lots of customers though to make use of their own network.

One wonders if 02's reported disposal of Airwave (for about £2 billion) has anything to do with raising some cash to buy 3?

Possible!!

At last some decent news in prospect for long suffering 3 customers.

[@NickyColman]

Id love for O2 to buy Three, however, from a business point of view, would it really benefit O2 to invest in a completely seperate network?

O2 may not be doing too well at meeting the 3G network deadline, but buying a new network is a bit drastic? Wouldnt it be easier/cheaper to suffer Ofcom sanctions or fines than buying a new company? Again from a business point, wouldnt it be easier to just increase minutes and texts in all packages to attract over the 4 million orphan customers?

Although O2 would gain 4 million or so customers, and an 89% 3G network they would have to invest in advertising for Three, pay the work force, maintain the 3Stores, pay for the customer services, possibly integrate CS with O2's in the future - all expensive stuff.

[3GScottishUser]

Id love for O2 to buy Three, however, from a business point of view, would it really benefit O2 to invest in a completely seperate network?

O2 may not be doing too well at meeting the 3G network deadline, but buying a new network is a bit drastic? Wouldnt it be easier/cheaper to suffer Ofcom sanctions or fines than buying a new company? Again from a business point, wouldnt it be easier to just increase minutes and texts in all packages to attract over the 4 million orphan customers?

Although O2 would gain 4 million or so customers, and an 89% 3G network they would have to invest in advertising for Three, pay the work force, maintain the 3Stores, pay for the customer services, possibly integrate CS with O2's in the future - all expensive stuff.

02 would simply integrate 3 into their own business. It would not remain separate. Customers ould be migrated and their contract terms honoured. Shops would be closed and sold on and the 3 UK workforce would be gone.

Easy...

[@NickyColman]

The question remains, would it be worth it to completely dismantle Three for 4 million customers who arent guaranteed to stay with O2 after the merger?

[Hands0n]

O2 need to get their own house in order before buying another 3G company. Their own 3G efforts have been lamentable. Although, considering 3's representations to OFCOM, pehaps O2 would itself be better off buying 3!

My fave option would be BSkyB - I think they'd make the better job of things than a traditional phone company. Those boys had decades to get innovative, and didn't.

[getti]

I still cant see it happening. Only last month there were rumors 3 were to be sold off and they launched the X-Series instead,

Yes 3 have had a bad start with customer service being the main problem but just look at CS at other places now. orange are outsourcing CS to india too.

Voda and T/M are pretty good in the UK i have to say but as a network there is nothing really wrong with 3

Cheap Plans, Great handsets, Great services, 90% 3G coverage to be HSDPA by march also. it's the bad customer service that is the let down but to be fair that IS getting better although its the language barrier thats the issue.

Now you could say i am biased now i work for 3 but if you check back on all my posts i praise 3 on everything all apart from the shoddy customer service on occasions.

3 have been at a loss until now for a few reasons. The main being that £5bn license they had to fork out for plus the large cuts on handsets to get customers over from other networks on a totally new network which is hard going.

Now that 3 have deals with Sky, Google, Skype, Microsoft and many more, plus internet access they can only get better. And with handsets like the N95 and W950 due plus HSDPA i am sure they will pull through.

[3GScottishUser]

02 would gain bandwidth and probably about 2.5 - 3 million active customers. 3's numbers have been falling for months due to the lack of a pre-pay product to sell.

A ready made 3G network maintained by Ericsson is an attraction as is the content (music downloads etc) which 02 have been quite slow to develop. 02 could compete for MVNO services with added capacity.

The key factor would be the cessation of a new entrant's ability to frustrate the market. The benefits would be felt by all the big 4 and it's likely 02 would find favour and gain something from the rest in a roundabout way over time.

[@NickyColman]

Agreed Getti. To hark on about Three being a shoddy network is like going on about the days when my Bt Cellnet phone would lose signal if it went in my pocket. Three now have some of the best handsets out, some cracking deals for value and are really bucking the trend by getting involved with other media giants (MSN, Skype etc). Sure they dont have 100% internet access but really what benefit does 100% access do for the average customer? The majority of people i know who use the mobile web use it for news and IM.

I think Three are going in the right direction with the X-Series and hopefully will continue to push the All You Can Eat packages. If Three could put together a more "normal" PAYG package with good, reliable handsets with an added insentive over the other networks like £5 of content? Followed by sorting the Customer Services out and i honestly would not be able to fault the network.

[3GScottishUser]

Hmmm...

Have a look around the Internet outwith the 'enthuiasts' 3G sites and 3 are still losing customers because of dropped calls and reliability issues with basic services (Lack of seamless handovers is still a big issue for many where 3's signal is weak, especially indoors). Check www.reviewcentre.com for a sample of what ordinary users think.

To clarify, it is not known for certain which networks will offer the Nokia N95... 3 did'nt offer the N90, N91 or N93 in the UK so the N95 is not certain. The improved range of handsets is not available very widely. 3 have a lot showing on their website and perhaps in their own outlets but checkout CPW, Phones4U and on-line suppliers like e2save.com and they have a very limited range abailable, and that has been the case for months.

As for HSDPA.... 3 are in the weakest postion of alll the networks. They have to replace hardware in some areas to provide HSDPA whereas others like Vodafone etc only have to do minimal changes and upgrade software (because their equipment is more modern), hense its Vodafone and T-Mobile who have most HSDPA available now. why is the LG Chocolate U830 (the only HSDPA handset 3 have on their site) not available with x-series? Why do they restrict x-series to one handset, the N73.... something to do with capacity maybe? Can't be anything to do with phone software as they sell other Symbian Series 60 handsets......????? BTW... 3 have had the same coverage as 02 (GSM) since day one, they simply chose not to allow users to roam when their coverage was weak for financial reasons!!

As far as the deals with Internet content providers is concerned.... that is a pure marketing issue. T-Mobile already hammer 3 with Web'N'Walk on Flext tariffs and 3 have nothing to compete with Web'N'Walk Pro. It's only a matter of time before the rest offer similar access but even then it's not a huge issue for most users who simply want to talk and text. MSN, Yahoo etc is available on all mobiles - only the pricing issue remains to be addressed by some and that is 'stroke of a pen' stuff!

3 have no convergence and that is a killer now. NTL, Vodafone, 02 and Orange have alll made moves to tie users to mobile and other services and it's working.... Orange are experiencing backlogs with customers signing up for their free/Max broadband when they subscribe to £30+ mobile plans.

Being realistic..... can you blame Canning and Frank for trying to offload the 3 UK business? It has been a disaster. It has no pre-pay presence and it's contract base is getting squeezed because dealers have switched to other more profitable sales. Convergence is a major threat. 3G technology has not produced any killer application that the mass market wants to buy. 3's reputation for reliability and customer service is poor and margins are now thin whilst the market is even more saturated. Just to make matters more interesting the huge premium 3 gain from ingress (inbound calls) is about to be slashed by Ofcom!

Honestly, I am sure 3 have their supporters but even the keenest must be able to see the writing on the wall now.

[getti]

To clarify, it is not known for certain which networks will offer the Nokia N95... 3 did'nt offer the N90, N91 or N93 in the UK so the N95 is not certain. The improved range of handsets is not available very widely. 3 have a lot showing on their website and perhaps in their own outlets but checkout CPW, Phones4U and on-line suppliers like e2save.com and they have a very limited range abailable, and that has been the case for months.


3 WILL be selling the N95. March is the date it is due. The N93 is set for a December launch and the new 8gb N91 is due in january

[3GScottishUser]

They will be late with the N95 then as its scheduled for release in January in the UK and I understand at least one network will have stocks then.

Meanwhile no wonder Fok and Sixt are desparately trying to offload 3 UK.... Ofcom are about to auction another range of 3G spectrum and the bids are expected to be a fraction of what HWL want for their business. I suspect BT will be back as a mobile provider under their own steam and with their own network. Should'nt be a big problem seeing as they had the experience building 3's 3G network in Ireland!!

More Info: https://talk3g.co.uk/showthread.php?p=18458#post18458

[Hands0n]

I can only speak for my own experiences in the South East of England where the 3 signal and quality are very good, strong and stable. The only quirkiness of 3's audio quality is a noticeable "oddness" which is probably down to their compression techniques in-net. It does not seem to quite have the clarity or low-latency of the other networks. But it is completely useable in all respects.

I also feel that their range of handsets are now in keeping with the other networks 3G ranges, notwithstanding some of the leading-edge devices. I rather think this is more to do with 3's policy of heavy branding than anything else. They've history, having [initially] wrecked one or two previously i.e. the Nokia 6280 was as near a disaster as the LG U81xx when it first came out.

Everyone knows my opinion of 3's CS - I'd rebut with anyone that it is getting better. Albeit by proxy but my latest experience is that nothing at all has changed, it takes the UK arm to remedy the most simple of issues.

The basic problem with 3's CS is not language but one of philosophy. The Indian sub-continent is not reknowned for having a Customer-centric culture. This is apparent in how they deal with the demands of a foreign nation which has a culture of choice and expectation. Our time of living under monopolies is a distant memory, as far as phone networks are concerned. We have very many alternative places to go for our services. Mess us around and we simply walk away at the earliest opportunity - that is precisely what contributes to 3's staggering and unsustainable churn rates. Yet, to date, 3 have not learned their own lesson and that of history - keep the Customer happy and interested, not treated with disdain and contempt as happens with the Mumbai CS. Contrast their UK CS, if and when you finally get to them, these could not be more helpful and fully meet the requirement. But 3, to their peril, steadfastly refuse to listen or remedy the problem. Well, now they are where they are and the next period will tell which way they will go. But, and I stand by this, until or unless they resolve their Indian CS problem, almost anything they attempt will be futile. New Customers, experiencing problems with the increasingly complex offerings, will be made fed-up with 3 at the hands of their Indian CS and will walk away at the first opportunity, spreading the bad-word about the company. Not prophetic, this is going on every single day at the company and it is agonising to observe!

I'd dearly like to see them remain the 5th network operator. I'd dearly like to do business with them again. The latter is unlikely though until I start to read real positive tales about their CS or that it has been abandoned to the UK function - I do not make a policy of getting stung repeatedly.

[3GScottishUser]

I would echo all that has been said above and note that in time honoured British tradition the 'blame game' has already started re the failures at 3 UK.

Reading the comments of Frank Sixt (HWL's CFO) lately it's clear Bob Fuller (3 UK + Ireland CEO) can look forward to a roasting n 2007 when he fianlly steps down in favour of Kevin Russell.

One year on the departure decison of Gareth Jones looks like the wisest move made by any of the senior 3 UK management.

One way or another 3 UK is going to be a very different company after the new year and that's not surprising as the UK mobile market that they had a hand in shaking up is now being rocked by a whole new range of developments.