CANNES, France -(Dow Jones)- 3 UK, the U.K. mobile telecommunications company owned by Hutchison Whampoa Ltd. (0013.HK), said Wednesday mobile network operators in the U.K. need to launch third-generation, or 3G, services in earnest in order to differentiate themselves.
3 UK's Chief Executive Bob Fuller told journalists on the sidelines of the 3GSM mobile telecoms conference that second-generation network services have become commoditized.
"There is very little difference between networks. There is very little difference between services. The only difference is the price point," Fuller said, adding that most consumers opt to buy a specific handset rather than choosing a network.
"Operators can only differentiate themselves when they offer 3G," he said.
The 3G networks enable higher-bandwidth services like video telephony and video downloads.
Four out of the five U.K. mobile network operators have launched 3G services. 3 UK only offers 3G services.
In a speech at the conference, Fuller said that on average, U.K. citizens spend only six minutes a day using their mobile phones. That is half the amount of time that the average citizen spends using fixed-line telecoms.
"If they - the consumer - like it so much, why do they use it so little?" he asked. "The mobile industry has failed to live up to its potential."
He said only 3G can deliver this potential, which goes far beyond basic text-message and voice services.
The cheaper voice tariffs on 3G enable users to fully exploit the technology, Fuller said. "You have to make it affordable for people to use," he added.
3G networks carry voice calls more efficiently than older 2G networks, enabling operators to offer cheaper voice calls.
3 UK has 2.5 million users in the U.K., attracting users with very cheap voice bundles. But Fuller said its customers are also using other services, noting that over the past six months, over 10 million music video clips have been downloaded.
Fuller said he expects the emergence of niche 3G handsets to enable operators to differentiate their services. These niche handsets would contain basic 3G telephony function but would be designed specifically around particular services like music, photography or mobile gaming.
He said 3 UK will offer a music-oriented handset in the future.
"We're looking at our options at the moment. Customer segmentation is starting to happen now," he said.
He added that he expects customer-generated content, such as short videos, to drive further 3G mobile phone usage.
Fuller said he wasn't concerned by the imminent U.K. launch of easymobile, the new mobile phone service run by TDC AS (TLD) and Stelios Haji-Ioannou's easyGroup. He said the service would only target low-spending users.
-By Nic Fildes, Dow Jones Newswires; 44-20-78429264; nicolas.fildes@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 16th February 2005
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