Three UK claims 5G-ready cloud core first ahead of August launch

Even though it won’t be flicking the 5G switch until next month, Three UK has decided to bang on about its new virtualized core once more.

We first heard about this whizzy new core, that has been built in partnership with Nokia, back in February. At the time we assumed that would be the last we’d hear about it until the formal launch of Three UK’s 5G network, but Three seems to think we need just one more teaser first.

So, once more for those at the back, this is all about actually using this virtualization tech we’ve been hearing about for so long to make a secure, scalable, flexible core that is capable of fully delivering the 5G dream. It will be housed in 20 dedicated data centres scattered around the country to deliver edge computing benefits such as lower latency. This is also a good case study for Nokia to show how good it is at this sort of thing.

“Our new core network is part of a series of connected investments, totalling £2 billion, that will provide a significant step change in our customers’ experience,” said Dave Dyson CEO of Three UK. “UK consumers have an insatiable appetite for data as well as an expectation of high reliability.  We are well positioned to deliver both as we prepare for the launch of the UK’s fastest 5G network.”

“This is an exciting time for both Nokia and Three UK, as together we work towards the future of telecommunications networks,” said Bhaskar Gorti, President of Nokia Software. “This project delivers a joint vision that has been forged from the catalyst of Three’s strategy for complete business transformation. The project will deliver a flexible 5G core network, enabling the next generation of mobile services and cementing Three UK as a true leader of 5G in the UK.”

Three was careful to give shout-outs to some of its other partners in this project, which include Affirmed Networks for traffic management, Mavenir for messaging and Exfo, Mycom and BMC for OSS. Not only will this core network be central to Three UK’s strategy for the next decade, it will also provide a good live test of the kinds of technology everyone will be reliant upon before long. No pressure then, see you in August.

US is winning the 5G speed race

Although there is a lot more to 5G than ‘bigger, faster, meaner’ download speeds, the US has bragging rights currently when it comes to the fastest download speeds.

According to the latest analysis from Opensignal, 5G is boosting maximum downloads in all eight markets where the connectivity euphoria has been launched, aside from Australia that is. It’s a very crude measure of success, but it is something which the telcos will want to shout about.

As you can see from the graphic below, there is certainly an increase in speed, though this is hardly a good measure when you consider very few consumers even touch the maximum speeds promised.

Opensignal graphic

Leading the pack is the US with maximum downloads speeds of 1815 Mbps, and by somewhat of a clear margin, though both Switzerland and South Korea have entered into the holy land of gigabit speeds. Perhaps the strangest statistic to make note of is the decrease in maximum speeds in Australia.

The lead which the US has established should come as little surprise when you consider the spectrum being utilised. Telcos in the US are already able to use mmWave spectrum for 5G, whereas European counterparts are utilising the mid-band spectrum, which sacrifices some speed to improve geographical coverage.

Looking at the UK, which currently sits bottom of the rankings, there is perhaps something for Three to shout about. Opensignal suggests speeds here might be impacted by the fact EE only has 40 MHz of relevant spectrum. Three has been shouting about its 100 MHz of contiguous spectrum in the 5G bands, claiming it is best positioned to deliver the 5G experience, and this analysis perhaps supports this claim.

And to address some of the speed differences between Opensignal and the figures which are being quoted by the telcos, this analysis is being done in the real world. Consumers are asked to download the Opensignal app, allowing the team to assess speeds in the real-world, with a range of different devices (manufacturer and condition) and a variety of applications.

But you also have to take into account these speeds are not realistic whatsoever; its nothing but a PR plug for the ‘creatives’ in the marketing department to make use of. Let’s take Australia as an example.

According to this analysis, Australian telcos can achieve a maximum download speed of 950 Mbps for 4G. However, as you can see from the graphic below, reality is far from the maximum achieved in perfect test conditions.

Opensignal 4G graphic

Although we are comparing apples and pears here, the theory is the same. Real-world experience is entirely different from the maximum speeds which the telcos boast about; this has been true for the 4G world and it would be perfectly reasonable to assume the same for the 5G era.

Fundamentally, this means very little for the moment. Coverage is incredibly limited while reality will be very different when more users hit the network. You also have to take into account European operators do not have access to the high-band spectrum which will deliver the monstrous speeds promised.

That said, the variety of speeds perhaps give an indication of the success of deployment strategies. It is certainly early days in the 5G era, but the US has claimed the first accolade when it comes to the dated ‘bigger, faster, meaner’ mentality which has governed the telcos for years.

Three UK has a great 5G opportunity but needs to do some growing up first

Three is positioning itself to fully exploit the 5G opportunity, but you have to wonder whether it can deliver the high standards it is setting itself by just repeating what it has always done.

“We are going to take 5G by storm, we believe it is ours to own,” said Shadi Halliwell, CMO of Three UK, at a London briefing this week.

There is certainly an element of truth to this statement; the UK connectivity market has pleasantly evolved into the environment which will allow Three to flourish. Data is king as we head towards 5G and with the on-going challenges in delivering broadband which meets consumer expectations, the conditions are ripe for disruption.

Three has always sold itself as a brand designed for the data-intensive consumer and this is the promise of 5G for the moment. Without Release 16 from the 3GPP, 5G is little more than upgraded 4G, but this won’t matter for Three. The brand proposition is already well established and 5G allows the team to double-down on this position.

There are a lot of other factors which will help the team here also. The telcos has never been shy about hyping its contiguous 100 MHz of spectrum, or that it is has a greater horde of assets than its competitors. Being late to market also might help, taking a bigger picture approach than rivals seeking to win the ‘first’ tagline.

But if Three is going to be a serious competitor, it has to evolve its image.

Chasing after the data-intensive consumers is all well and good, but this is only one segment. Presenting itself as a challenger to the status quo is all well and good, but it doesn’t create a sense of robustness and heritage. Colourful marketing campaigns and undermining competitors with cheeky messaging is all well and good, but it doesn’t appeal to more conservative consumers.

If Three wants to compete with the big boys of the UK telco industry it has to present itself as a brand which is robust, dependable, reliable, competitive, consistent, mature and creative. It might be ticking a few of these boxes at the moment, but not all of them. And until it ticks more, it will remain a brand with a niche appeal.

Make-The-Air-Fair-1

In the UK, we like quirky, we like imagination and we like the underdog, but only to a certain degree. We also like brands we can trust and rely upon, especially when we are going to be paying for a service which is increasingly dominating more aspects of our lives. We’re conservative, especially when dealing with money.

At the moment, Three is like that mate you like going to the pub with. He’s fun, adventurous and there will never be a dull moment as you set the world to right. However, the other telcos are dependable friends which you can go to with real-world problems. When it comes to spending money, most UK consumers will want to side with the dependable friend.

This is evident in the market share statistics over the last couple of years, which have remained largely static. Using Ovum’s WCIS, O2 leads the UK for mobile subscriptions with 36%, EE sits in second with 33% and Vodafone holds 20%. Three is in a distant fourth with 11% market share of mobile subscriptions in the UK.

Three has created an interesting brand identity, and it has worked in attracting some customers, but this is a niche. If Three wants to steal subscriptions from its competitors, it has to be more than a plucky outsider, it has to grow up and evolve its offering.

This is not to say Three does not have an excellent opportunity.

As mentioned above, 5G is going to encourage consumers to use more data than ever before. This will be the case over the coming months, and these trends will gather momentum as designed-for-5G services and applications emerge. Three is in a good position here, both in terms of the brand heritage and the spectrum assets it controls.

What is also worth noting is the focus is not only on 5G. Three is refarming huge swathes of 3G spectrum into 4G and a £2 billion investment in the network will also help 4G speeds improve across the country. However, with this article focusing on 5G, you can see from the image below the telco is certainly creating a more stable foundation to grow in the future.

rhdr

The constant issues with broadband has created an environment which is ripe for disruption. Just look at the progress alt-nets are making in the fixed world. With its UK Broadband acquisition, Three can offer FWA solutions to broaden the portfolio of services it can offer customers.

Looking at the FWA offering, there is a great opportunity for Three to enter the world of convergence. If priced correctly and the right data allowances offered, bundled FWA and mobile contracts could challenge BT in its pursuit of providing a seamless connectivity experience everywhere and anywhere.

Perhaps the most interesting aspect of this product is the plug-and-play nature. In theory, customers should be able to open the box, plug in the router and away it goes. No more waiting for engineers, it’s the simplicity which will sell it. A beta test is underway in Camden to ensure the reality of plug-and-play lives up to the promise, but this is a very interesting approach.

And finally, onto pricing. Being last to market offers Three a chance to see what rivals are going to charge. Yes, the rivals might be able to attract early adopters, but undercutting competitors on price could work very well, especially as 5G enters the mainstream. Both EE and Vodafone have unveiled very expensive tariffs, so it will be interesting to see how Three approaches this dilemma.

The new text-to-switch initiative from Ofcom will also help here. No-longer will customers have to endure the painful process of hopping around a call centre to cancel a contract, it is now (theoretically) a simple SMS.

Three does have a genuine opportunity to make substantial headway in the 5G era, but it needs to evolve its image and offering. Albert Einstein once said ‘the definition of insanity is doing the same thing over and over again but expecting different results’; if Three’s approach to 5G is the same as 4G, it might make gains, but it would not be a surprise to see the competitive landscape in the UK remain the same.

We would not like Three to ditch the image which has created, it clearly works with some demographics, but it needs to have more than one string to the bow if it is going to improve on an 11% market share.

Industry says Government should focus on outcomes not specific tech

Being forward looking is an excellent quality to have in a national government, but when objectives are focused on technology not the desired outcome, it is a risky approach.

In this instance, it seems the UK Government can do nothing right. For years, the focus of the fixed industry was G.Fast not fibre, believing that the connectivity half-way house was a sensible strategy. There might have been adequate arguments made at the time, but with hindsight they do seem underwhelming.

Now the position is to drive towards a full-fibre, connected nation, with targets to connect every household with the future-proofed lines by 2033. However, some are now questioning whether this is an over-correction.

The issue seems to be that the UK Government is focused on technology, not delivering the desired outcome.

“We will cover the overwhelming majority of the UK with fibre, but there are also other technology developments which will contribute to a connected Britain,” said Clive Selley, CEO at Openreach. “These include FWA [Fixed Wireless Access] and low-orbit satellites, and we have mentioned balloons, we should be open-minded.”

Fibre should be the objective but doesn’t mean you have to deliver it to everyone and everywhere tomorrow. As Selly pointed out during his time on stage at the Connected Britain event, connecting the first 80% of premises to fibre is not an issue. It is expensive, it is time consuming, but its not complicated. The next 10% is going to be much more difficult, and the final 10% is where they haven’t worked it out yet.

Another interesting point is whether customers actually need fibre connectivity right now. In the desire to go end-to-end, you have to wonder whether fibre is needed for the last-mile. Long-term, of course it will be necessary, but it is about addressing the desire not the technology.

“In my opinion, government has been focusing too much on full-fibre,” said Three CEO Dave Dyson. “I would like the government to take a step back and understand what people actually need. Full-fibre is an answer, but it is not the only answer.”

Again, we would like to emphasise fibre should be the long-term aim. But, you have to ask what the actual objective of the UK Government is. In this case, it is to deliver faster connectivity to citizens across the entire country, irrelevant to the local environment.

Understanding fibre is the long-term objective, but the mid-term objective is accessibility to faster and more reliable connectivity is an outcome-focused strategy. This is where fixed-wireless access can play a role, as can low-orbit satellites and even balloons. The last mile can be delivered through a variety of options, as long as the foundation of the network is fibre, giving the option to extend in future years.

Unfortunately, it seems the UK is in a difficult position of its own making. In not embracing fibre earlier, it is behind the trends. A commitment to full-fibre might have been the right call 6-7 years ago, but the situation has changed. The current strategy does not necessarily present the UK with the best route towards the full-fibre nation; the plan should be evolved to consider context.

Here is pragmatic example, how many people actually need speeds north of 150 Mbps right now? Not many. Fibre is the best option for the long-term, but focusing on developing the foundations, delivering the experience which customers need and expect, while also creating a more sustainable approach to ROI should be the mid-term objective.

As Dyson pointed out, FWA offers the team a more readily available opportunity to drive revenue on a per-user basis. It allows them to react to customer demand as opposed to forecasts. However, for the proposition to work as promised fibre needs to be rolled at least to the cabinets everywhere.

This is a divisive topic. Some believe the telcos should bite the bullet and simply pay to get fibre everywhere. Holding them accountable is perfectly reasonable, but you have to also take into account the telcos have to make money as well.

When you consider context, financial demands and future-proofing the network, the equation is a very difficult one to balance. Fibre should be the long-term objective, but right now the demands are for faster broadband while also addressing the appetites of those in the rural communities. The other options to satisfy the connectivity demands of today should not be ignored, which is perhaps what is being done with the Government’s hardcore focus on full-fibre.

Strategies should be outcome focused not technology defined. This is perhaps the problem the UK is facing today.

Three plans to continue to be the awkward one

Three became the third telco to outline its ambitions in the 5G world this week, taking a slightly different approach to EE and Vodafone but it could prove to be the most interesting.

Although some have talked-down the long-term prospects of fixed wireless access, it does break down the barriers for those who want to enter the broadband market. At 5G World, we got the chance to speak to Ros Singleton, MD of UK Broadband, the subsidiary and smarts behind Three’s broadband challenge.

“Three is now a lot more of an established company, but they still like to disrupt,” said Singleton.

Three might not be a start-up anymore, but it still likes to maintain a position as a thorn in the side of the long-time established telcos. Just can your mind back to the ‘Make the Air Fair’ campaign of 2016, Three has always made a habit of doing business a little bit differently from the status quo.

The fixed wireless access (FWA) proposition could fit into this mould very effectively.

Singleton suggested that while there is an obsession with fibre as a means of broadband delivery, why shouldn’t the last mile be delivered over the air. A fibre spine with wireless wings is an interesting concept, and right now, it should be able to satisfy the intense data demands of 21st century consumers.

“Customers want broadband to work just like water,” said Singleton.

This idea perhaps undermines the ‘bigger, badder, faster’ mentality which has dominated the telecoms industry for decades. With 5G on the horizon and fibre promising lightning fast connectivity, you have to wonder how much of this horsepower would be redundant.

FWA is not an idea which has been heralded in with the emergence of 5G. It has existed as a product in the 4G-era and has offered a satisfactory experience. What Singleton believes is that customers just want broadband products to work, they don’t care about 100 Mbps. If 20 Mbps is all the customer needs, then why worry about delivering on top of that; its nothing more than window dressing.

5G of course helps to deliver more speed to the customer, but more importantly, it delivers a significant upgrade to capacity. For Singleton, this is a much more notable upgrade. The wider the pipe, the more data which can be delivered to consumers and the more reliable the connection is.

If you consider there are very few, or potential no applications available which would require 100 Mbps, customers will be more worried about whether a connection is stable, consistent and reliable. Capacity might be the ugly duckling of the connectivity family, but it can prove to be a game-changer when it comes to delivering on promised experience.

This is where Three could make a dent in the broadband space. Delivering an experience which satisfies the expectations of the consumer, but also adding in the element of simplicity.

The team are currently running a live-trial of the FWA proposition in Camden, with the aim to create an experience which undercuts that of rivals. For example, aside from reading a few instructions, the hope is that customers can simply open the box and plug-in a 5G router. It is supposed to be as simple as that. Customers won’t have to wait for an engineer, self-installation is the aim. The Camden trials will inform the team how this ambition can be achieved.

On the price side, Singleton was a bit shy, and the same could be said about speeds. The aim to at least match the performance and price of competitors, we suspect there might be an undercut, remaining true to the Three playbook, but the idea of simple installation, rolling contracts and relevant experience is how the team plan to differentiate.

This is supposed to be a challenge to the status quo. The team are not targeting any of the competitors in particular, though it is a very broad approach to FWA, the team is launching in 25 cities by the end of the year. Most importantly, Three has a track-record of being a pain; this is a product which is well worth keeping an eye on.

Three enters the 5G fracas with FWA offering

Three is promising to launch a 5G home broadband service in London in August, before rolling out the connectivity euphoria for both mobile and broadband in 25 cities by the end of 2019.

With EE and Vodafone already moving through the gears in the 5G race, it was never going to be long before Three made its debut. Initial plans had seen Three as a little big sluggish in the home-straight, though it appears the business is ramping up pretty quickly.

“It’s clear that consumers and businesses want more and more data,” said Three CEO Dave Dyson. “We have the UK’s best network for data and we have led the market on customer usage on both 3G and 4G technologies. We have worked hard over a long period of time to be able to offer the best end to end 5G experience. 5G is a game changer for Three, and of course I am excited that we will be the only operator in the UK who can offer true 5G.”

For the moment, the Three focus is going to be exclusively on fixed wireless access. This should not come as too much of a surprise, Three has been plugging the FWA business case over the last couple of months and it does offer the team new products to shout about. Three is somewhat of a specialist in the disruption game and have been eyeing up the fixed market since its acquisition of UK Broadband in 2017. Most might associate 5G with mobile, but it does present Three with a very interesting opportunity.

“It is the home broadband offering that really catches the eye,” said David Warner of uSwitch. “Until now, much of the discussion of 5G’s arrival has centred on how it will improve mobile connectivity and speeds, but its potential to upend the broadband market, and so quickly, is now being explored by Three.

“Those in areas or buildings without full fibre installed may now be able to choose the convenient option of plugging a 5G router straight into the wall and being online on ultrafast speeds in seconds. By the time full fibre does reach many people – with 2033 still the government’s target for full coverage – they may very well be perfectly happy with 5G mobile broadband connections.

That said, it won’t be long before Three enters the mobile fray. Network tests are currently being undertaken in the likes of London, Cardiff, Glasgow, Birmingham, Manchester and Liverpool, all of which will figure into the 25-strong list of cities to get the 5G euphoria before the end of the year. There are a couple of questions which remain however.

Firstly, you have to wonder what devices will be sold through Three tariffs once the mobile products are rolled out to the masses. As it stands, Three has two devices listed on its website. One is the HTC 5G Mobile Smart Hub, and the second, the Huawei Mate X.

While there is a risk associated with the Huawei device, Three has said it will continue to sell the Mate X though consumers will be confronted with warning signs to ensure an informed purchasing decision is made. Both EE and Vodafone have stopped taking pre-orders for the Huawei device, and will not until the OS situation has been cleared up. There are of course other devices on the market, but it does seem the details are yet to be finalised. Three has said these offers will be unveiled closer to the mobile 5G launch date.

Secondly, how will Three approach the pricing conundrum.

Three’s traditional strategy in the UK is to undercut rivals. The team has traditionally targeted those consumers who are heavy data users, and it would be a sensible bet to assume this successful plan will continue into the 5G era, but who knows.

The challenge which consumers are facing at the moment is price. There will be thousands who upgrade as soon as possible, but normal people will look at the price of 5G connectivity (for a decent data bundle) and struggle to justify the additional expense. EE and Vodafone have unveiled their tariffs, and we suspect they are north of where the market will settle.

The question is how much of a challenge to this duo will it present? The conditions are perfectly suited for Three to roll out lower tariffs and disrupt on price once again, but only time will tell as to whether it can justify such a plan considering the expense of deploying 5G networks in the first place.

Are the days of the full MVNO numbered?

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece, Darren King, Head of Business Development for Three’s wholesale division, assesses the future for MVNOs.

For as long as there have been MVNOs there has always been the received wisdom that a full MVNO was the best strategy to adopt. Having full control of your brand, the marketing and the technology is of great comfort when you are launching a new operator to market.

There are numerous examples that have stood the test of time. There are also the brands that have stretched out into countries all over the world, think Lycamobile for example.

One of the biggest reasons for going full MVNO has been the ability to switch wholesale partner easily to chase better commercials. However, the rate of change in our industry, particularly technological change, is bringing the tried and tested concepts into review.

That’s because to keep meeting customer expectations, you have to invest in the core network. It’s an expensive business, and it’s becoming even more expensive as the time between cycles of improvements shorten. There is no way of competing with the incumbents without a technology roadmap that keeps relative parity. It’s catch 22. If you want to keep growing your customer numbers and reduce churn you have to keep up the investment.

And that’s before we mention the challenges of managing, maintaining and improving UX.  One of the biggest challenges is getting the right settings onto handsets as the model has changed so much over the years. Traditionally all the settings needed to use a mobile service were stored in the SIM.  This is no longer the case, and there’s increasing reliance on settings being pre-populated in direct and market sourced devices across the board. This means that services like VoLTE, which make propositions stand out, can be difficult to deliver to customers.

There’s also something we refer to as the ‘blacklog’ conundrum.  As more consumers opt for SIMO and bring your own device, it becomes more complicated to get them access to newer services unless the MVNO can get retrospective updates. There are a heck of a lot of handsets out there so it’s no mean feat to pull it off!

Added to this, there’s the expectation to have a roaming proposition. This too is hurting MVNOs as they seek out roaming agreements and strike deals on interconnect charges. It requires full-time management and very often some form of partner hub to give you the scale that will sway customers to your brand and give commercially viable pricing.

There is no escaping the investment required. It’s brought into focus when you read the analyst firm Enders’ opinion on the Sky Full MVNO, which states the broadcaster will need around 3 million subscribers to break even in today’s climate.

It’s very easy to see why MVNOs and high street brands considering becoming an MVNO are saying ‘there has to be another way’.

And there is. We are now seeing MVNOs launch without these overheads and operational commitments. Instead, in our case, they are using a telecoms as a service model whereby the core network, billing and customer management tools, fraud detection, web front ends, existing roaming agreements, and the technology for proposition design and development of the operator are used lock stock, and the brand adds its sales and marketing expertise over the top.

In the case of our model, even the hardware challenges are reduced as the MVNO benefits from pre-populated settings that support MVNOs using a Three network profile. This means customers can use the devices straight away with no fuss.

It’s simplifying the MVNO model beyond recognition. In fact, in some ways you could argue it’s really bringing the word virtual to life in the phrase MVNO.

This radical partnership approach to MVNOs is shaking things up and allowing brands that have previously dismissed an MVNO to have a go with far more confidence than they otherwise would have. Superdrug is a perfect example. It’s used its loyalty card and understanding of its customers to develop a proposition that customers want and launched Superdrug Mobile at significantly lower risk and with extraordinary results.

It’s this success that leads me to predict that we’ll see and hear a lot more of the telecoms as a service model in the coming year, and in particular at MVNO World Congress. I’m certain it will be the early adopters of this model that will not only succeed in their launch market but outperform past records. For any brand considering how it will survive tough trading conditions, this has to be a very attractive way ahead.

Darren KingDarren King, Head of Business Development for Three’s wholesale division. Darren is responsible for new Mobile Virtual Network Operator (MVNO), wholesale, and Internet of Things (IOT) commercial partnerships. Experienced at seeking new partnerships, whether through traditional MVNO’s or through White Label partnerships with the overall aim of doubling Three Wholesale’s customer base and revenue year on year to 2021.

Three Denmark pushes carrier billing as value add

Cutting through the competitive chaos can be a difficult task, and while Three UK is focusing on convergence and broadband, Three Denmark is making a play to manage the consumers wallet.

With mobile services becoming increasingly utilitised the telcos need to search for a new way to stay relevant and add value to the consumer. Some are diversifying into alternative connectivity services or content, but other are broadening their wings outside the traditional realms of telecommunications.

“It can be difficult to keep track of how many different small amounts you are allowed to spend on apps, movies and games – or how much you get used during a month,” said David Elsass of Three Denmark. “Therefore, many of our customers, both with and without children, have sought greater overview.”

Many telcos have created a very unique position of trust with the consumer. Some might begrudgingly plug credit card details into the Google or Amazon matrix, but almost every consumer trusts their telco to manage their financial details effectively. With more services becoming online-first, or at-least digitally-orientated, a telco can bridge the gap in trust, allowing sceptical consumers to interact with the digital economy.

This is the niche which Three Denmark is looking to fill. Through 3Payment, customers will be able to pool all Apple, Google and Microsoft purchases into their phone bill, streamlining the increasingly fragmented digital economy.

According to a report from DIBS Payment Services, the Danes spent over 20 Danish Krone (roughly £2.3 billion) on online services and subscriptions. As many of these providers are making it so easy to purchase services, keeping track of total spend can be a complicated process. The 3Payment will not only streamline these payments into a single point, but also give the user the option to limit spending.

Three is not necessarily following the status quo in creating additional value to customers, but this is a very interesting approach. Unless the telcos offer something different to consumers, there is a very real risk of walking the path to utilitisation.

One of the main reasons we like this initiative is Three is attempting to add value to the ecosystem in an emerging segment, leaning on one of its attributes. This isn’t an example of a telco attempting to muscle into a competitive segment which is dominated by traditional players which have very different business models, like content, which we see as risky.

Three is leveraging a strength which it has, the trust relationship between it and the consumer, and tackling a pain-point in the digital economy. Simple, forward-looking and innovative.

Three UK readies assault on broadband market

While its latest financials might not look mind-blowing, Three UK is steading the ship as it casts its eye towards the promised land of convergence and 5G.

Convergence is not really much of a buzzword anymore, such is the accepted nature of the model across the telco industry, though Three is seemingly readying itself for a broader push into broadband segment. The first job is to rebrand Relish, which will happen next month, and the next box to tick will be 5G.

“We are well set up for some transformational shifts in 2019 for our customers and our employees,” said Three UK CEO Dave Dyson. “It will be a year when our customers will start to see the real benefits of the next generation of 5G “mobile” technology, a technology that will not only replace 4G, but will also replace the need for wired broadband services.”

With the new ‘Three Broadband’ branding and a 5G network launching in H2, the Three marketers will have plenty to talk about when attempting to add to the 800,000 broadband customers it already has. In terms of the current state of play, Three said 10% of its current customer base is already ‘converged’ but 5G offers an opportunity to accelerate growth in the broadband business.

The team feels it has an advantage over rivals with its 5G holdings, offering superfast broadband connectivity which is not reliant on fibre. Whether UK consumers are swayed by the Fixed Wireless Access promise remains to be seen.

Looking at the position of the business, it would be fair to describe the last twelve months as healthy without being particularly good. This might not sound the most positive, but the raw materials are certainly in place for Three to make some very strong strides forward.

Total revenues over the last 12 months rose 1% to £2.4 billion, while total network connections reached 11.3 million. 99% of new customers were brought in through Three’s own sales channels, churn is down to 1.1% and net promoter score has reached a new high of +15. Three might not have torn up many trees last year, but the foundations of the business are very healthy.

Looking forward, the team is in the testing stages for its fully-virtualized 5G-ready cloud core network, while there are now 21 data centres live on the network. The business has also signed an agreement with SSE to improve mobile backhaul and 3G spectrum is being continuously re-farmed for 4G. All these initiatives will incrementally improve the customer experience.

“Three is fully embracing a business transformation to take maximum advantage of the opportunities digital businesses enjoy,” said Dyson. “2018 was the year when we set the foundations in place for us to jump up to the next level and become the UK’s best-loved brand by our people and customers, meeting all our customers’ connectivity needs.”

This kind of feels like a ‘calm before the storm’ scenario. Once the broadband rebrand is finished and 5G launched, we feel there will be some very aggressive moves from Three, staying true to its data-orientated roots but heavily integrated convergence messages on-top.

Three UK’s guerrilla marketing strategy backfires

Challenger brands need to try harder to get noticed, but this approach can sometimes backfire, as Three UK found out this week.

Three is hoping to build on its #PhonesAreGood campaign, launched in October last year, that took a tongue-in-cheek look at all the negative press around smartphone addiction by imagining some historical scenarios that would have been changed for the better with the involvement of a smartphone.

One of those scenarios concerned King Henry the Eighth, who notoriously got through six wives by the time he called it a day. The joke is that if he’d had some kind of dating app at the time he might have been able to make up his mind about them prior to marriage and thus a couple of them could have been spared the chop.

In the build up to Valentine’s Day some bright spark in Three UK’s marketing department thought it might be a laugh to promote this part of the campaign with a tweet entitled ‘Shag, marry or behead’. This was presumably a nod to the ‘kiss, marry, kill’ game and maybe even the phrase used by history students to remember what happened to Henry’s wives: ‘Divorced, beheaded, died; Divorced beheaded survived’.

Now you don’t have to be the most committed social justice warrior to know that Twitter is not the place for nuance or humour and anything that can be taken offence to will be. While the tweet was clearly a joke, there was always the possibility that it could be perceived as some kind of trivialising or even endorsement of domestic violence by someone.

That someone was apparently mumsnet member Jeanhatchet, who flagged up the tweet on the site’s forum. “The 3 mobile network are laughing at domestic homicide in this tweet, Jeanhatchet wrote. “In many of the women killed as a result of intimate partner violence blunt force trauma to or being stabbed in the head is a feature.

“The most worrying thing is …. how did this marketing meeting go? What views were expressed about killing women? How that was funny and would sell more contracts and phones? Imagine those men who sanctioned this and how common their views are that it never registered as a marketing disaster? https://twitter.com/threeuk/status/1095740892919541761?s=21” Three seems to have taken down the offending tweet by here’s a screenshot of it courtesy of Jeanhatchet. Google is also still acknowledging the original tweet.

3 UK deleted tweet

 

3 UK deleted tweet Google

That was enough for the Manchester Evening News to get involved, which committed not one but two dogged hacks to the job of writing up this mumsnet post and the rest of the claimed ‘flurry of complaints’ around Three’s tweet. Even their combined efforts weren’t enough to ensure the faithful representation of the discussion thread they were copying-and-pasting, however, with one of Jeanhatchet’s early comments wrongly attributed to  Lolkittens5, to whom she was responding.

Hot on their heels was Labour MP James Frith, who apparently spent most of yesterday working himself up in to an impressive froth of righteous indignation. “This is a disgraceful ad,” he opened. “Misogynistic and violent towards women. The disgrace of it. I hope you’re fined big time for this with proceeds sent to women’s refuges. Utterly shameful @ThreeUK”

Three, of course, tried the standard ‘we are sorry for any offence caused’ defence but, as is nearly always the case, it was too little too late. Apparently emboldened by the 30 likes and four retweets his initial Twitter salvo received Frith doubled down, including the textbook move of calling for an apology and then rejecting it when it was made. He concluded by vowing to grass Three up to the ASA before wrapping up his busy day by retweeting a story about how great his constituency is.

Unperturbed Three announced a new marketing initiative today around London Fashion Week. It’s claiming to have launched the world’s first 5G mixed reality catwalk, It ‘uses innovative start up Rewind and its Magic Leap mixed reality technology alongside Three’s 5G network, which will see the designer’s inspirations come to life on the catwalk,’ according to the press release.

Somehow this involves the son of singer Liam Gallagher and actress Patsy Kensit, who is apparently a world-renowned model and, as you can see below, has inherited his father’s petulant resting face. Perhaps this is intended to distract from Three’s rather weak 5G claims, with vague talk of IoT and AR the only substantiation offered.

3 UK Lennon Gallagher

“Today we are turning up the volume on 5G and bringing it to life for the first time in the UK, right here in the heart of the fashion world,” said Shadi Halliwell, chief marketing officer at Three. “By giving students access to the next generation of mobile technology, they will be able to push the boundaries of learning, innovation and sustainability to create in a way that’s never been possible.”

Halliwell, who presumably signed-off on the problematic tweet, will be hoping this new initiative will be free from controversy, or maybe not. It’s possible that the tweet was made in the hope of a bit of viral exposure, but that seems unlikely when you consider how quickly it was deleted. One thing, at least, Three will have gained from the experience is the knowledge that guerrilla marketing is a very high-risk strategy these days.