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Prepaid 3G could rescue 3UK

November 10, 2003

3UK has provided various monthly packages to suit all types of users such as VideoTalk 1000 for heavy users and VideoTalk 100 for occasional users. The one type of market they have neglected is the prepaid mobile sector. Sure enough they have the 3toGo package where users buy the handset and only pay for calls they make but the problem with 3toGo is users need to set up a direct debit transaction and have their credentials checked.

3UK lacks prepaid voucher mobiles and if they had them at the start, it could help a long way in reaching its goal of 1 million customers in Britain by the end of the year. It is fair to say the explosion in mobile owners in the late 90's corresponded to the introduction of prepaid voucher mobiles phone. Around 70% of mobile owners in the UK are prepaid users. The prepaid mobiles can be easily bought from all types of shops such as supermarkets and stationary stores. No credit checks needs to be done and no direct debit account has to be setup. Whenever users runs out of call credits, they only need to buy vouchers to top up their mobiles.

With 3toGo, users do not have to buy vouchers as the call charge is debited from their account but it doesn't set a limit to the amount calls you can make. If a parent bought a 3toGo mobile for their kids, kids can make as much calls as they want. With prepaid voucher mobiles, the mobile must have credits before anyone can make calls and is limited to how many credits are still left. It makes it a great present to give to someone else because there is no hassle of setting up an account and it's up to the person receiving the present to buy calling credits.

Mobile usage among the teenage age group is one of the highest in the UK with many owing a prepaid mobile. The owners in this age group require small, lightweight and fashionable handsets, which none of the current 3 handsets are. Aiming its service at this age group could reap rewards for 3. Obviously, 3 would have to provide new cheaper and smaller handsets, probably at the expense of the video calling function. 3 were keen at the start of their campaign to market its video calling and data service as the main function of its 3G service but their recent strategy has been use to cheap voice calls to attract customers. The state of 3's coverage outside London is still questionable and makes video conferencing rather inconsistent. So abandoning video calling functions shouldn't be an issue as long as customers would still be able to access certain data services such as downloading ringtones and wallpapers, which is a popular revenue generator.

Whatever 3 releases out between now and Christmas, few would anticipate 3 achieving its subscriber target.

 


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M-Profits: Making Money from 3G Services
ISBN: 0470847751
This book discusses 3G services from the view of what is needed for the service to provide value to the user, what is the value proposition for the user, how will money be made out of delivering the service, and discussions on how revenue sharing propositions might work to benefit content providers and network operators. 3G operators should take note of this highly recommended book.

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