Click for Market Place
Virgin and 3 add to UK's complex mobile internet choices
Published: 7 August, 2009
Tags >> UK | Virgin Media | Broadband | Cable | Cellular | Applications (Media) | Wi-Fi
In the super-competitive UK media market, the mobile and converged operators are always trying to up the ante with differentiated offerings. As the major cellcos gear up for a smartphone fight, 3 is boosting its claim to be the foremost carrier of the open mobile web, and moving further towards a full range of telecoms and content services all over wireless. Meanwhile, Virgin Media is having quad play thoughts too, adding a mobile video-on-demand service on a BlackBerry-style device, which brings together its cable content and its MVNO businesses.
3's latest offering echoes some already available in the US - a mobile Wi-Fi service, called MiFi, which will be on sale in time for Christmas. It allows customers to use Wi-Fi to access the 3 network via a tiny wireless modem, which enables the user to create a personal mobile WLan connection and link various Wi-Fi enabled devices to the internet without any need for a fixed broadband line. All backhaul is supported by 3G.
This fits well with 3's shift to present itself as a broadband, rather than a mobile-only, operator, even though it only has a wireless network. It has embraced the open web more aggressively than most cellcos, with devices like its Skype and Facebook phones; with the most competitive dongle offerings in the UK, including the first pay-as-you-go USB modem; and with alliances with Sky and other content providers. Pricing still to be announced.
Over at cableco Virgin Media - which also owns the UK's largest MVNO, Virgin Mobile - the firm plans a mobile VoD service, trying to integrate its two main businesses more closely and leverage them jointly to increase its market power. In an interview with UK newspaper The Guardian, Virgin Mobile's managing director Graeme Oxby said the new strategy would make the content currently seen on Virgin's set-top boxes and web portal available to mobile users. "We have customers using fast broadband and customers watching TV. How do we bring that to life on the mobile phone?" he said.
The service is not just an add-on to make the cable service more attractive to its users (like US cablecos' mobile moves), but is geared to shifting the MVNO's customer base further towards the high value contract model, and can be acquired as a mobile-only option. Virgin will also launch its own-branded, BlackBerry-like email device to boost ARPU.
In the second quarter, Virgin Mobile had 784,600 contract customers, 24% of its total, and saw 60% growth in the preceding year. But mobile revenues in the quarter declined to £127.5m, down from £143.9m a year earlier, a trend blamed on mobile termination rate cuts and prepaid churn. Overall mobile ARPU was £12.43. At a group level, Virgin Media reported total revenues of £936m, compared to £940m a year ago, and operating income of £15m, compared to a loss of £328m.
