For a long time, it was pretty easy to poke holes in (and fun of) Hutchison’s 3G operator, 3. From the way Hutch MD Canning Fok conducted interviews, to its bone-headed insistence that video calls would lead users in droves to 3G, to its later shift to attract user by slashing the cost of the most 2G application of all — voice calls. The defining moment, really, was when their UK COO said that people that want open internet access on their mobile phones must be “nuts”.
All that stuff colored my judgment of the company. They’ve gone and done some cool stuff (at least in the UK) since, like their user-generated video service, SeeMeTV, which has proven quite popular, as has Kink Kommunity, their social-networking service, and they also offer free access to Windows Live Messenger, SMS revenue losses be damned. But there’s still some rough spots, in particular a lack of open internet access — so perhaps although that COO left, his influence remains.
But now I’m feeling really conflicted after checking out their X-Series services, which were announced today. In short, they’ve put together a bunch of internet services (Skype, Sling, Orb, Windows Live Messenger, Google, eBay, Yahoo) and will give them to their users for a flat fee. They haven’t announced pricing details, but when you read something like this from an operator, you can’t help but get your hopes up:
Why should you pay per minute, per message, per click, per megabit? In the real world, you buy your PC, pay for broadband and that’s it. Our principle is simple – X-Series customers will only pay a flat access fee on top of their basic subscription and then what’s free to use on the internet should be free to use on mobile broadband (subject to fair usage and international roaming conditions, of course).
I’m not really sure what to say about that, since rarely do operators speak so sensibly. Dean Bubley, who’s just as cynical about operators as I am, calls this “beautiful heresy”, since 3 is embracing all those things that other operators view as nightmares: flat-rate data, free IM, placeshifting of media from other content sources, and so on. They’re adding value in optimizing them for their customers, and should be able to justify a premium price over flat-rate data plans like T-Mobile’s £7.50 per month Web’n'Walk offering. Operators worry all the time about becoming dumb pipes that provide only connectivity; 3 is illustrating how they can be a smart pipe.
One further note, that’s a bit of an aside, really: the Skype client isn’t really VoIP — they’re using iSkoot, as I suspected back in August. But it doesn’t matter: 3’s implementation still delivers most of the benefits of Skype, like free Skype-to-Skype calls and presence information.
Embracing the Internet…
Good news. UK operator 3 not only announces flat-fee data pricing, but also bundles all the imaginable Internet goodies to the same package. They call it X-Series, and the first actual devices are Sony Ericsson W950 and the Nokia……
Do you know if only the listed services will be supported? Any open access to the Internet?
Another welcome move to fixed-price web access, there’s going to be a mobile web explosion once this is the standard..
Anders, I think this must mean open access too - it would be too strange to give access to Google without it.
3 appears to be going in the right direction, but without any pricing information it’s still all spin.
It looks like they mean “flat-rate” on a per application basis – so you pay X amount per month for unlimited Skype, or X amount for Sling Media.
3 says its partners will be entitled to a cut of the revenues from users accessing their services.
If it turns out this way, it’s not flat-rate as we know it. It’s an interesting approach, however.
More from me here: http://www.unstrung.com/document.asp?doc_id=110879
-Gabe
It is a historic day for mobile internet!! It will definitively unlock the real value of Internet access on the go.
[...] The company is betting that the XSeries effort, a way to bring Internet services such as iSkoot (Skype) and Sling Media will make it more appetizing to consumers. This forced openeness has our good friend Carlo Longino in a bit of a swoon. [...]
Strongly agree with you that this is very significant. As I ramble on about in more detail over at my blog I think we might be starting to see the tipping point over to flat rate being the normal way things are done.
Very ironic it comes from 3!
In reply to Anders comment above I would say that though we need to wait and see what nasty “fair use” conditions etc. they put in, they do say that “what’s free to use on the internet should be free to use on mobile broadband” which is a fairly strong pointer.
Geoff.
[...] Er wordt al veel over geschreven en dat is ook terecht denk ik. http://mobhappy.com/blog1/2006/11/17/3-oh-how-you-make-me-feel-conflicted/ http://www.mobilemarketingmagazine.co.uk/2006/11/xseries_from_3_.html [...]
As I understand it, it will be a two-tier flatrate, not “per application”
Tier 1: Web browsing, email, IM, Skype
Tier 2: Rich streaming media / placeshifting ie Orb & Sling
Not sure what happens if you sign up to Tier 1 and there’s streaming elements in a web page - could just be it’s downgraded in QoS or bitrate.
Also not sure where other IP traffic from downloaded clients will go, eg VPN, other IM, packet VoIP etc.
I’ll have a wild guess at the two tiers being £12 and £18 / month, with 300M and 2GB caps respectively… anyone else want to take a punt?
Dean
Hi Dean:
How does £12 and £18 compare to T-Mobile’s £7.50 for Web’n'Walk?
Kudos to T-Mob for setting the benchmark. 3 need to come in around this level.
Oh, and it needs to launch HSPA.
Overall, the concept is a good one. Let’s see if 3 fluffs it at the last minute, or if they’re really going to stand behind what they pitch.
-gabe
£12 sounds fine when you consider the T&C that come with the £7.50 Web&Walk. From the T-Moible website:
“To ensure a high quality of service for all our customers, they are not to be used for other activities such as (but not limited to): modem access for computers, internet based video/audio streaming services, peer to peer file sharing, internet based video download and internet based telephony. If such use is detected, notice may be given, after which network protection controls may be applied which will result in a reduced speed of transmission.”
Orange’s flat rate data plan has similar conditions. Granted, we haven’t seen what conditions 3 are going to set for this new service yet, but from what I’ve seen so far it looks like a better choice. And since 3 have been testing HSDPA upgrades on their network in Central London since June, it shouldn’t be long till we see some HSDPA-Compatible phones in the X-Series range (Nokia N95 let’s hope).
Yes, those are restrictive T&Cs. Are they enforced?
I have an HSPA test unit from T-Mob and it can do all those things. But I haven’t paid for it — perhaps you need a more expensive plan for the good stuff.
One more point on pricing…
Does anyone know if there’s evidence of positive price elasticity in the wireless data market?
Intuitively, this should be the case… but is it?
Maybe operators have worked out thay may as well hold the line on pricing… then when the good phones and apps come along we’ll all feel better about it.