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3UK bucks trend with cut-price, flat-rate 1GB data tariff

Oracle has a big appetite for mobile

UK carrier 3 has bucked the trend that has seen operators move away from flat rate data pricing by creating a new tariff it claims will satisfy even the most data-hungry user. The One Plan tariff gives users a gigabyte of data, along with more voice minutes and text messages than most people could realistically consume, for a starting price of just £25 ($39) a month. 3, which occupies a distant fifth place in the UK market with 5.4 million subscribers at the end of the third quarter, has often sought to disrupt the UK market with its retail offers.

The new tariff requires the user to sign up to a 24-month contract, and varies in price depending on the handset. For £25/month users are restricted to the Nokia 5230 or the Samsung Galaxy Europa. But a Sony Ericsson Satio takes the monthly price to £40. The tariff is not available with the iPhone or any Blackberry products.

The move comes at a time when other carriers are looking to new billing models in the wake of a significant surge in mobile data uptake. Vodafone, O2, AT&T, KPN and Hong Kong carrier CSL are among the firms that have shifted pricing strategies, capping data allowances or charging by volume or speed. These carriers have argued forcefully that unlimited data use is economically unsustainable but 3 appears to have no such concerns.

With a small subscriber base 3UK has capacity to spare, while its competitors are dealing with congestion issues that are, in some cases, very serious. Also working in its favour is the fact that the project to consolidate its network with that of T-Mobile UK through their joint network operating organisation MBNL has recently been completed, giving 3UK a very strong network on which to base its proposition.

Privately some executives within T-Mobile UK are understood to have had concerns about the disproportionate advantage that this project would give to 3, and offers such as this one might be seen as justification of those concerns. The merger of the UK arms of T-Mobile and Orange into Everything Everywhere earlier this year means that the Orange infrastructure will now be integrated into the MBNL network as well, which can only serve to strengthen 3’s proposition.

The fate of 3UK makes for an interesting discussion. At the close of the third quarter, its nearest competitor, Vodafone, had more than three times as many customers, with 16.8 million, while O2 had 23.0 million and Everything Everywhere 30.4 million, according to Informa’s WCIS. While 3’s lack of scale is no longer a problem in terms of its network, the UK market is settling into a three-way fight between the big players and how easy it will be for 3 to maintain its position remains to be seen.

But with offers like its new One Plan, it’s certainly giving consumers something to think about.


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