Three UK courts medium businesses following 5G landgrab
Among the slew of announcements to come from Three UK this month was the news last week that the operator has launched a new business comms offering aimed at medium sized businesses with staff between 25 to 250 people.
According to the operator’s managing director of business Mike Tomlinson, Three Business Adapt is designed to make mobile-based connectivity more predictable and scalable for businesses which might be feeling the pinch or still navigating their way through the post pandemic world of hybrid work.
As Tomlinson’s colleague at Three UK’s business arm, director of business and market propositions Snehal Bhudia, noted: “New ways of working with more happening online has driven mobile usage up by 15% – but that also brings uncertainty as well as the change and growth and this requires flexible services.”
Three’s medium sized business customers can choose from five unlimited fixed price data plans (the type of plan will depend on the number of connections required) as well as being able to access a self-service portal that enables customers to control their usage and spending.
Companies are also able to add on more connections instantly, should their business plan or use case demand further connectivity. The proposition also boasts a premium level of service normally reserved for bigger corporates.
“Medium sized firms need a more of a quality service and we’ve taken that on by taking the principles of the large enterprise market committed monthly fee and brining it down to the medium space, wining relationships in market in the simplest way possible,” said Tomlinson.
Three’s competitively pitched business offering is possible thanks to its £2bn investment in next generation network infrastructure. The operator has also invested in its digital infrastructure too, through partnerships with companies such Amdocs, Docusign Tariffcom and Astute.
Three UK was a smaller player in the 4G market behind rivals EE, Vodafone and O2 (which it tried to buy in 2016 before the sale was blocked by the EU on anticompetitive grounds).
As the operator’s CTO David Hennessy acknowledged during the Business Adapt press launch at its Oxford Street HQ on Monday: “It was difficult to compete in the 4G space, we paid the same rates as everyone else, but we were limited in terms of spectrum.”
Investing in 5G spectrum and completing a network transformation project means that the company now boasts availability in more than 400 locations across more than 3,000 sites covering 54% of the UK’s population – which it claims makes it the country’s biggest and fasted 5G network.
“Moving into 5G – we’re the big guys now. We’re going to own the 5G market and part of that is growing the B2B space,” Hennessy added.
Tomlinson explained that Three UK’s business division – which launched two years ago – is projected to account for 30% of the company’s margin growth over the next five years, seeing connections increase from the current figure of 260,000 to over one million by 2026.
This means growing from a 3% market share to 12% by 2026, with the company confident that it will hit 20% within 10 years, operating in an addressable market that would grow from the current 35% of the UK to over 90%.
In terms of growing its customer base with support from its 10 reseller partners – including Currys – Tomlinson added that new target markets included the public sector.
Following Three UK’s existing relationships with local government, including Swindon Council, the exec added that the operator was “well placed” to join the Government’s Public sector procurement network.
According to Tomlinson and Snehal, current medium segment clients range from CK Hutchison partner organisations that “take anything from a few 100 to a few 1000 connections” to several transportation and logistics firms – which include supplying one big name delivery firm with connectivity for its fleet of drivers.
“Up until now the white-collar office worker hasn’t fully returned to the office yet but we’ve been winning lots of blue-collar business,” Tomlinson added.
According to Snehal, the division is also starting to receive a “more proactive interest from estate agent and retail chains – which wasn’t on the table 18 months ago.”
Like the customers it supplies, Three UK’s business tends to be influenced by larger workforce trends. The operators supplied thousands of connections for online delivery drivers during the pandemic and grew their customer base by 50,000 over this period alone.
Clients include pub chain Greenking, which switched from a bricks and mortar model to an online takeaway and delivery service. Many charities came on board too having flipped their business models and going out to the market rather than relying on people to approach them directly.
In terms of future office work trends, Tomlinson reports that the market appears inquisitive about workforce solutions that blend home and office working – but he doesn’t think that anyone’s cracked it yet.
“Once interesting area is Video Sales as a Service – as physical and telephone calls are replaced with Zoom and Team meetings.
“Video conferencing while the director of a company is at home and the sales exec is not dressed in a suit does change the whole tone of a conversation and is changing the relationship between the buyer and the seller – and that could work in our favour.”
However, he adds: “This could only be a temporary thing, which is why we have to make our offering as flexible as possible.”
There are areas of the market Tomlinson doesn’t think will go back to the way things were before the year 2020 began. Far more businesses are now prepared to buy and sell online, rather than through a sales rep or through wholesale warehouses/ cash and carry visits.
“For the last 15 years we’ve been waiting for the online revolution to hit the business market and that didn’t come through even though we were buying the services to enable it.
“Now we’ve come through this period of difficulty, we look at the new role for online business, and how is it enabled by the likes of us and how that’s changing the needs of customers – because they’ve changed the way that they want to buy.”
Pausing private networks
At present, Business Adapt is looking at mass scale mobile-first expansion and it is not looking to supply industry 4.0 with Internet of Things connectivity or private networks, which are regarded as nascent still, and treated as a separate category within UK’s operation.
While Three UK is officially Hutch’s Centre of Excellence for private networks – it’s flagship customer is the government-funded 5G test bed at the Port of Felixstowe which is focussed on the industrial automation of its cranes – right now Tomlinson says it’s more of an R&D Network play than a commercial category.
“Private networks are interesting. When I arrived, I put a temporary halt on them because we had three or four already – we also have one in operation at a major airport.
“But as category it’s not clear to any of us as to where it’s going to go. If you look at all the research on private networks, you will see massive growth predictions, but I think what’s more likely to happen is that industrial automation will become a category on the public network – an enabling solution rather than use of private spectrum.”
The exec added that, even with the introduction of 5G mmWave technology, offering speeds eight times faster than current 5G (“and that’s probably three years away”), he remains doubtful that that the economics will ever stack up.
“Although there maybe be industrial applications around the smart city concept on a public network,” he added.
IoT is another area which remains a category unto itself and now runs out of Three Ireland which, Tomlinson adds, has the advantage of being able to offer the UK market the use a roaming sim to secure coverage for its “very geographically diverse, dispersed customer base”.
Which leaves Three Business Adapt free to attack the medium sized business space with its mobile first corporate packages. “It’s not the sexy stuff but it’s the hard yard with guaranteed returns. We’re after a mass scale expansion right now and anything that looks slightly niche, we’re putting in the draw,” said Tomlinson.
Snehal added: “It’s also about building up relationships and when the customer base expands, and their needs expand then that’s maybe we’ll revisit some of those other options.”
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