3 IN 2 4 WON'T GO ?

Rumours are flying today that 3 UK is to be sold soon...its not just me that heard this, here is another swallow

No surprises really, its been clear for quite a while that the business model is bust, looks like Hutchison's deep pockets have finally been emptied. Very hard to compete in a hypercompetitive market like the UK, especially as 3G has been so slow to take off

So, who will buy?

It is now traditional in the UK for a foreign Telco to buy a UK mobile company, and we don't have a US one yet - but maybe BT could use it given its complementary assets - IPTV, DSL, Fusion et al.

Or maybe Google, as they say that YouTube will go Mobile and Yahoo and Vodafone have just eloped.

Or even Carphone Warehouse? Ntl and Virgin have got together so thats them out probably

Now we think Sky might be a good fit, after all this would give them a Quad play, and maybe all those MySpace users can get a free phone too

Interesting Times....................just a rumour of course

Postscript - Hutchison have apparently denied this rumour, and will instead announce a new business model for 3 UK tomorrow - more to follow later.....

Post Postcript - 3 UK announced today on their website that they are launching a new service model called "X - series". I quote:

It will extend several of the core applications and uses of the broadband internet to the mobile handset, with a new pricing model. The X-Series from 3 will be supported by the leading internet companies, cutting-edge handsets from the world's leading mobile manufacturers and premium customer service.

Customers will be able to make unlimited calls from their mobile using Skype, watch their home television via their mobile using Sling, access their home PC remotely using Orb and have access to the best of internet and messaging services from Yahoo!, Windows Live Messenger and Google.

The X-Series from 3 will be priced like fixed line broadband. It will offer use of mobile internet services free at the time of use, for a flat fee. The X-Series from 3 will be available in the UK from the 1st December 2006 and in 3's other markets around the world in early 2007.

So - a new pricing model, based on a flat fee from the 1st of December. US mobile companies are already doing "as much as you can eat" deals, so this is a welcomed plan. What has held the UK mobile media industry back vis a vis the 'Net are:

(i) adhering to a walled garden model, which guarantees a large % of a small pie rather than a small % of a big one. Didn't work on the Internet, it is not sustainable here - the mobile music market went elsewhere, and so will the video market under current conditions. Over the last 3 years new web 2.0 technologies and faster fixed line (and wifi) broadband have made mobile data services increasingly dated.

(ii) unrealistic pricing of services vs physical and internet based media (the dreaded "sticker shock" effect - £1.50 for the song, £5 for the download).

It does not look like the service is fully open, and as yet no details on the prices.

If the prices are set at Internet level then this is attempting to massively disrupt (crash?) the mobile 3G services market - not so much selling the company, as betting it!