Upwardly mobile

Challenger mobile brand 3 is confident its focus on pay-as-you-go handsets and social networking, coupled with online advertising, will lay the foundations for future growth, says Joe Fernandez

As the newest of the mobile networks in the UK, 3 is dwarfed in marketing might by Vodafone, Orange and T-Mobile. In 2007, it spent just 29.7m overall, compared to 83.6m by Orange, according to Brad Insight/Nielsen.

But as consumers struggle to pay monthly tariffs in a recession, 3 announced last week that it would reintroduce pay-as-you-go handsets on its network.

The brand is hoping this – along with its social network-focused handsets – will convince young consumers to stick with the operator. It recently rolled out its INQ handset, dubbed the “first social mobile”, which integrates Facebook with Skype and features Windows Live Messenger and Last.fm.

With 4 million customers, 3’s market share is only about 5%, but Neil Andrews, head of portal advertising at 3, points out: “We’re the UK’s biggest 3G network.”

When 3 was launched on March 3, 2003, it traded on its ability to offer third-generation handsets and services at a time when this was not standard. Six years later, the smartphone market is far more crowded, with competitors such as O2 offering handsets such as Apple’s iPhone.

In a bid to stand out, 3 has decided to make online advertising its lead marketing medium. It appointed Glue London to the 30m account last December, expanding its role as the lead digital agency.

The brand has also started using the phrase “Fresh on 3”, replacing its former slogan “Welcome to our Network”. The ads aim to make consumers aware of the interactive nature of 3’s service and how this offers value for money.

Andrews says the company has seen a rise in subscriptions to its mobile broadband offerings, which has also been heavily advertised by Glue. As a result, it wants to capitalise on this customer interaction.

“We have seen our take-up of mobile broadband double in recent months, with December figures showing a record level of customer interaction with [online portal] Planet 3,” he explains.

Broadband internet is growing increasingly important to mobile operators. Analyst BuddeComm claims the UK mobile market in 2008 was characterised by new developments in advanced data services, quad-play packages and other related issues.

A spokeswoman for the researchers reveals: “Mobile penetration approached 125% by mid-2008. Fierce competition has forced operators to concentrate on packaging service bundles and line service promotions, and explore applications such as mobile search and advertising facilities.”

Andrews admits that to build 3’s reputation in both mobile and broadband, more needs to be done to address misconceptions that the network still suffers from signal coverage problems. “There is a mistaken perception that signal problems we had in the past still exist now,” he says.

The brand now claims it has 99.9% coverage and its forthcoming collaboration on networks with T-Mobile UK will lead to almost complete population coverage for 3G services. Hutchinson Whampoa, 3’s parent company, says the deal will enable the companies to deliver better broadband internet access in addition to reliable voice and text services.

In keeping with its reputation for interactivity and innovation, 3 is opening up its integrated inventory to advertisers, in an attempt to monetise its marketing potential. This will include giving advertisers access to its portal home page, which is pre-installed on all phones, and offering advertisers opportunities to have logos in the menus of its exclusive handsets.

Yell.com has become the first brand to use pre-loaded icons on handsets, and uses it to promote its mobile site and a download application for its directory. Andrews says: “It’s a brand presence that will be there for the lifetime of the phone.”

With plans to make the most of an online advertising model while evolving its business model and product range, 3 seems confident that a global recession will not impede its plans for expansion. Andrews enthuses: “We are democratising and mobilising the internet.”

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