[Hands0n]

It just had to happen - they could not sustain it indefinitely. But what is on the horizon then? Will this bring on "the right kind of Customer"?



3 will phase out its £15-per-month tariff next month to try and wean people back onto more expensive tariffs.

Although a diluted version will still be available, the £15-per-month tariff will no longer be promoted. The tariff was launched in February, offering customers 500 voice minutes, to drive footfall into 3's growing number of stores.

A similar deal will be launched in June for £20 per month, but with a small text bundle included, along with a £28-per-month deal offering 750 minutes and 150 texts.

3 is also offering some extravagant deals in a bid to retain customers. The network offered one customer free line rental for 17 months on an 18-month contract. 3 contacted the customer three months before his contract was due to expire, offering 500 minutes and 100 texts per month, for a total of £18 to be paid in the final month.

A 3 spokesman said: 'As a business, you do a calculation looking at a customer's usage. You understand how much they are using and you can put together as good a proposition as you can for that particular customer. The other thing you have to think about is that you are not paying someone a commission to put that together.'

Another customer was offered 750 minutes and 250 texts per month, with free line rental for the first 12 months, £4.45 for month 13 and £28 per month for the remainder of the 18-month contract. They were also offered a free Sony Ericsson K800i. 3 also offered this deal three months before the contract was due to expire. 'They are buying their customers direct,' one dealer told Mobile.


Article Source: http://www.mobiletoday.co.uk/content/16247.asp?men=1&sub=2

[3GScottishUser]

I can understand why they are ditching the £15 a month deals as they will be (a) attracting poor quality low spenders and (b) dragging down their ARPU.

The retention deals being offered now expose just how desparate 3 UK are to keep existing customers and no matter how you do the sums a new handset and one months line rental just cant produce a profit. Still if thats all market forces determine the service is worth then thats all they can get.

HWL will want to make moves as soon as they can before the reductions in ingress happen. Sadly for HWL any buyer will be all to familiar with the true revenues that 3 customers generate (remember the published results do not take account of promotions and acquisition costs) and the prospects for future growth based on uptake and market penetraton in the last two years.

All things considered Kevin Russell has a very difficult task on his hands and not providing the top selling 3G handsets (Nokia N95 and SonyEricsson 880i) wont be helping either. With 3's pre-pay offering being vastly undercut and with the Big 4 reporting statistics that dont appear to have been affected by a fifth entrant (3) the prospects even relying on direct distribution look bleak.

[Hands0n]

3 do rather seem to be thrashing about trying to find a model that actually works. All of the time they are missing the obvious - they are losing Customers hand over fist not because of their Tariffs, not because their network Sucks, not even because they don't sport the latest handsets such as the N95 (which they probably cannot brand into the equivalent of a 3310!).

I'm going to sound like a stuck record here, but they have not done anything about this since their UK inception - 3's problem is the off-shore Customer Services which are anything but.

Unless and until 3 bite the bullet and get rid of that shambles of an operation they will continuously lose Customers - the right type and the wrong type.

Think about it, Mr Russell, if I am one of the high spending Customer types that you are looking for; what on earth makes you think that I will put up with the ineptitude and direness that pours out from Mumbai? If you want to know what I want then take out a contract with Vodafone or T-Mobile, phone their CS up with a problem and listen, yes listen, to how courteously and effectively they resolve the issue. Then try the same with your lot - the truth will be abundantly clear immediately.

Every single person that I know who has encountered/experienced 3's CS has left the network at the earliest opportunity vowing never to return. That is unsustainable loss!

I want to use 3 again - there is lots that I like about them - but it won't ever happen until I read that they have brought their CS back to the UK and no longer use Mumbai or any other off-shore location.

[3GScottishUser]

Does anyone else think 3 launched too soon?

I think some catastrophic errors were made in 3's first 2 years and I doubt if free phones and £15 a month deals are the answer to building consumer confidence.

Its embarrassing that a new technology entrant ends up having to almost give sevices away to gain customers. Sadly that's the price now being paid for the horror experiences of early adopters and the cheap deals simply devalue the brand and reduce the ARPU which is the benchmark that HWL have relied upon to show that content on 3G is the big reason why 3 would be a success.

When something is much cheaper than other products or services most folks ask the question 'whats wrong with it?' and they are right to be sceptical about 3. The customer service is still appalling and the call reliability is also questionable compared to integrated GSM/UMTS networks. 3 are no longer pushing the bounderies of technology they are selling on price and that alone confirms how the market values the service.

Hard luck HWL.... you upset too many customers and thought there would always be more who could be hooked with a cheap deal...... a far too simplistic approach in a complex customer service focussed industry.

Oh well there's always Superdrug and Savers....

[Hands0n]

No, I most definitely do not think that 3 launched too soon. No more than I think that One2One or Orange launched their PCN networks too soon, nor that BT Cellnet and Racal Vodafone launched their Gen.1 cellular mobile networks too soon. Each and every one of those went through the same birthing pains that 3 did at its inception.

The biggest mistake that 3 made was the off-shore Customer Services - something that no Mobile Network Operator has done [at launch] before. It could not cope with the sheer volume of problems, disempowered and disenfranchised as it was, and is to this day.

Of course the first generation 3G handsets were poor - so were 1G, 2G and PCN (also 2G). Of course the 3G network was patchy, faulty, non-existent in places - ditto all the cellular networks that preceded it. And it took 3 a similar amount of time to remedy and bring their network to the coverage and quality that it is today - notwithstanding the to-be-expected areas of non-coverage.

All of the foregoing has done immense damage to 3's credibility in the eyes of the buying public. Their CS has done great [possibly permanent] to their goodwill stakes. It is almost futile 3 trying to buy the goodwill back in the form of £15 deals when their own CS is waiting in the wings to bring ruination to that and any other plan they put together. But, sadly, 3 still do not realise this.

I have to take issue with the comment regading call quality and reliability. This is not a widespread issue nationally. My own experience within and without my area of living, working and playing has been very good indeed. In fact, I have quite often had a 3 3G signal in the absence of O2, Vodafone, Orange and T-Mobile 2G networks. I have very successfuly used 3's 3G network (not their fallback O2/Orange 2G) as widely spread as Dover/Folkestone/Bournemouth/Brighton in the south and a lot of places up to and including Birmingham. It is a robust and well spread network in that respect. I fully accept that there are areas of direness - and I can readily identify more than four for all of the networks within a 5-mile radius of where I am sitting right now!

For certain, 3 have a major struggle on their hands to rescue failure from the hands of defeat. But all the while they are being stabbed in the back by their own CS they are doomed to the history books as another abject failure.

That would all be a very great pity - but also a testimony of a management that would not face and deal with the key issues at the heart of their malaise.

Good luck 3, you are going to need it in lieu of waking up and smelling the coffee.

[Ben]

The £15/mo deal was being pushed on the local radio here on Saturday, so it looks like dealers are making hay while the sun still shines :)

[solo12002]

I think my fellow users have raised and indeed answered some very good points.

From my point of view, Three have a CRAP CS service, if they got that right, things would inprove greatly. I do however feel we also need to prasie the network to. they have done so much in the short time they have been here.

Some good price plans with and without data, they have managed to get a fairly strong 3G network up and running, unlike the older networks like o2 for one. In my case its one of only two networks in NI that I can get a 3g signal with allmost anywere, the other being Vodafone.

Would the other networks have got this far within three years I dont think so.

Oh and three has a few more price plans out the £15 one ends this month, i understand for £20 you get 500 mins and 75 Texts. theres alao 750 mins and 150 texts for £28, even that beats most other networks.

[3GScottishUser]

3G supporters are always having a go at 02 but they appear to have had the most successful business strategy as they are the UK's most successful mobile network with more than 17.5 million customers plus tesco's MVNO customers (about a million).

Sure 3 offers cheap contract deals but they do so because they can't get any more from customers. HWL are not a charity and when they launched orange it was only slightly cheaper but had a huge emphisis on customer service and a network guarantee that provided confidence to both customers and the dealers.

Out looking around today the big news in the mobile stores is currently the Samsung slim series mobiles and things like the LG shine. The Nokia N95 is attracting lots of interest and the SE k880i is also prominent. What have 3 on offer?? The SE K610i at £15 a month, a good price and a reasonable phone but hardly something one would buy and be happy to flash around really. One just is'nt comfortable taking a mudane handset into work and telling folks how cheap the deal is.

Just what is 3's market now? It looks miles away from the 'quality' customers so often talked about by 3 UK's directors. It looks to me like they are having to trawl deep and take on lots of budget concious customers just to retain the user base.

I believe 3 did shake up the maket for a time but flext and other deals now cater for the needs of customers just as well and convergence deals are also having an affect in the direct arena. 3 have been used as the churn mechanisim of the dealers since 2003 and they have now moved their focus to direct deals. Sensible move as the previous strategy was a huge costly failure but whilst the deals might be cheap the service is nasty and 3 will only earn respect and loyalty when they abandon the abysmal Mumbai CS nonsense. 3 have yet to learn that cusomers have high expectations (and are very fashion concious in the UK) and a cheap phone deal with poor service only produces churn, dissatisfaction and damages further what is left of their reputation. There honestly cant be much time left for 3 to gain a foothold. as a network operator it cant be comfortable playing 2nd fiddle to an MVNO like Virgin Mobile after 4 years and the bosses in Hong Kong must be weighing their options up as the 'breakthrough' looks less likely.

[solo12002]

"3G supporters are always having a go at 02"

I think the requirement for most pl these days is to have a 3G network if you mean a three supporter, Im not Im currently not on the network, but may move over.

The points i made are:

Three CS is Crap

Three offer good price plans, I mean 750 mins and 150 18 month for £17.50 you cant blame someone for wanting that. In respect of Data Vodafone and O2 two of the longer and bigger networks dont have it.

Ask the guy down the street what he/she wants its not some wonderfull successful business strategy, its easy to understand price plans, with data access.

Vodafone and 02 are shooting themselfs in the foot over this, T-mobile has had W&W out for over a year, how much longer does it take these two networks to do something along these lines. Yes we can talk about how wonderful Passport and STC is, but T-Mobile have even beaten most of that on £35 p price plans with free calls

[Hands0n]

Honestly, you try O2 down here and you end up feeling like you'd be better off with a pair of tin cans and a length of string! And as for their 3G signal - it has trouble making it across the road, all 200M from me! The self-same handset on O2 that I was told by all and sundry is a weak 3G performer is rock solid on Vodafone and, since I trashed my 6280, it is running on full [3G] bars on T-Mobile. That, by any standard, is not the handset at fault - it is purely and simply O2 losing the plot entirely.

In my book, by my own direct experience, O2 are losing it - and that has nothing to do with whether or not I support or do not support 3. My comments relative to O2 are entirely objective and based upon qualitive observation and experimentation. I've tried a full set of UK mobile operator SIMs in the same handset and all perform 100% with the sole exception of O2 Contract and PAYG.

It will take some convincing that it is indeed the handset and not the O2 network in the South East. Any takers?

[3GScottishUser]

Cor blimey... have we all lost the plot?

02 have (along with Vodafone) have the most robust mobile coverage in the UK... there is absolutely no doubt about that... it's a fact.

The 02 strategy has been to satisfy the real desires of mobile customers and there is ample evidence that they have been the most successful mobile company serving the UK market.

In terms of 3G 02 have coverage in most major cities and where they have the service its very reliable in my experience.

The bootom line is that most mobile customers don't care about technology, they buy services they want that work well and are supported. 02 seem to have recognised that and made it to the #1 position in the UK ... crib about their 3G provison all you like but it's Telefonica 02 that has been proven right in terms of strategy and who are laughing all the way to the bank!

[Hands0n]

Seriously - you have not used O2 down here, it is dreadful. I'm not talking figures, I'm not talking coverage maps, I'm not talking spin. In every practical sense the O2 3G network is all but non-existent, and their 2G network suffers all manner of quality and coverage issues.

You are quite right about mobile customers buying services that work well and are supported. So when you are faced with such quality issues, and worse till, off-shore Call Centres - and you have to identify the correct one to call - then you do what we and many others I know have done. You walk away at the first opportunity.

The fact that those Customers care not about the technology is correct in the main. But while it is inescapably the technology that makes a mobile network (2G or 3G) if that technology does not function adequately it has an impact on the customer base.

I contend that the customer base is held together with brand loyalty. Why else does anyone stay with British Gas and be overcharged? But as others have found, the customer is fickle and the reliance on such loyalty is folly.

The plot losing is all O2's - they have taken their eye off of the ball. They are, at the moment, running on air.

[3GScottishUser]

I am not sure about the type of air 02 are running on...... it must be a powerful mixture as it has fuelled the most impressive customer numbers of all the UK networks. They just keep growing and growing and they are far from the cheapest option most of the times I have looked.

Can I restate an old saying "You can fool some of the people some of the time", but 02 seem to have been very consistant gaining share from others over the last few years.

BG customers have been leaving in droves which is understandable due to the poor press they have had, 02's have been not only staying put but rising.....I have a gut feeling they have something more than just blind brand loyalty to thank for that as the branding itself has not been around as long as Vodafone, Orange or Virgin. 02 must be a really interesting text book case study for marketing students. however they managed it, they would be mad to change direction significantly while they are delivering results. I believe 02's experience in the UK is now being exported to other markets where Telefonica have a mobile presence.

I am still scratching my head for an obvious reason why 02 have wiped the floor with the competition but I suspect they have been targetting precise customer groups and whilst not particularly innovative or the cheapest have built up a reputation for performance and value. Perhaps they come across as the most believable and that creates a value proposition in its own right? A look at 02's own research and strategy presentations provides an insight into the confidence that thier down to earth 'basic' approach has delivered. Its not tekkie or particularly sexy but it seems to have done what it said on the tin!!

[gorilla]

Just to add my 2p.

Three were in my experience ok. One or two dropped calls all year, tops. CS, struggled a bit at times, but generally ok. A bit of hassle getting my PAC and unlock code, but that's to be expected.

O2 coverage rock solid? Not on my planet. I still get loads of dropped calls. Something has changed though, as since I complained a couple of months ago I do seem to get a weak 3g signal at home now. Still no 2g until I reach out the window. Thank god for truphone and wifi.
I'll tell you why O2 have impressive customer numbers. Are you ready? :p

It was that magical 200 mins and 500 sms for £30 that they introduced a couple of years back that truely blew the competition out of the water. A lot of my mates are on O2 due to the included sms bundles.
Despite churn rates a great number of customers remain loyal (my GF for one refuses to leave O2 depite having a crap tariff).

Oh and another thing, do customers really want 3g? (Apart from us lot :D ) Understand what it is? I don't think so. Anybody hazard a guess as to why the worst 3g network has such impressive customer numbers? Maybe, just maybe because they're still operating on a 2g business model and marketing to a 2g market?

My O2 contract is up for renewal soon, (I didn't cancel early as suggested!) and I'll be going on to virgin's £10/month deal - 300 mins and 300 sms 30 day contract. I would stay with O2 if they match that or come close with a free handset, but I doubt it. In my experience their CS are not interested in retention. It will be intersting this time round though as this has been my biggest spending year ever on a mobile, cira £50 per month.

I do want a data tariff next, so I'll be waiting to see what voda and orange launch next month, otherwise it'll be three for me.

[Ben]

OT: O2 have been careful to keep their audience happy, not in terms of technical quality (a lot of O2 users I know will tell you they regularly have problems) but in terms of special events, festivals etc.

The O2 Wireless Festival, for example, in Hyde Park - O2 customers get access to a special VIP area. The year I went there were hot tubs etc... Non-customers were left looking in longing to be on O2 - and you can bet that if they went back the following year they would have been!

I'm not saying that other networks don't do this, but O2 in particular have created a package for young people that extends beyond a network.