You heard it here first!

[Guest Big Ron - No Longer a Mem]

I know, because I posted most of this piece... two weeks back. Nice to know that ZD's professional journalists agree with my views on 3G (even if they have taken a while to catch up)

{http://news.zdnet.co.uk/story/0,,t284-s2132795,00.html}

{http://www.modaco.com/viewtopic.php?t=6263&highlight=}

Pre-paying Brits won't flock to 3G

13:34 Tuesday 1st April 2003

Graeme Wearden

Even though mobile phones are common commodities, consumers are still price-conscious and could be reluctant to move to third-generation services, a recent report has found

Many mobile phone users are too cost-conscious to make the leap to 3G, according to research published on Tuesday.

A new study from independent research group The Work Foundation casts doubt on the ability of third-generation network operators to build successful mass-market services in the near term.

MobileUK: Mobile Phones and Everyday Life looked at the evolution of the mobile phone market over recent years and studied how consumers use their handsets today. It concluded that despite the explosion in take-up -- 75 percent of the UK population now own at least one handset -- many people are still very concerned about the cost of mobile phone use, which The Work Foundation predicts could threaten 3G's chances of success.

"There is a myth that talk is cheap. In fact, for most people, talk remains an expensive worry that needs to be kept under control," said Max Nathan, co-author of the report. "Our research suggests that the mobile industry must remember how important cost is to most people who buy and use mobile phones. The industry is aware of this but it doesn't change the fact that until 3G becomes better value most consumers will find it an expensive worry too far."

After spending a total of £22.5bn acquiring 3G licences in the UK, Vodafone, Orange, O2, T-Mobile and Hutchison 3G are under pressure to launch successful and lucrative third-generation mobile networks.

Only Hutchison has launched its service, called "3", so far. Its handsets cost around £400, with a contract costing £59.99 or £99.99 per month.

A pay-as-you-go option is also available, where video calls cost 50p per minute, voice calls to other 3 users cost 5p per minute, and voice calls to other networks cost 10p per minute. This may appeal to more occasional users.

Nathan, and fellow report authors James Crabtree and Simon Roberts, warn though that customers' sensitivity to price will make it hard for 3G operators to tempt them on board.

"One particular problem is getting users to move beyond pre-pay. Many advanced services are not available to pre-pay customers, and our research suggests that the industry will find it difficult to wean users off pre-pay," they said.

[Guest mcwarre]

Totally agree,

Unless O put Everyday 50 onto 3G I ain't interested. I mean Videophone? My missus can see who I am with then. Hold on, I can see who she is with. :oops: I'm off home, quick!!!!!

[Guest Big Ron - No Longer a Mem]

I was told, back when I worked for them, that they ARE trying to convert PAYG customers to Pay Monthly. When I pointed out that (not yet having a "Liberate" staff phone) was a PAYG customer, and saw no signs of it happening, I was told "We're picking the most lucrative customers FIRST." Given that most calls I make from the mobile are to my wife, and I phone her then ring off so that she'll phone me back, I can see why they might not put me on the list. But last night I got an SMS from Orange (the first since I bought the phone four years back!) telling me that there will be "changes", and to look at O's website. I think that with "Your Plan", O may have already shot themselves in the foot - a plan that was advertised as "God's gift"... but which (when you looked at the small print) meant that your were probably going to pay MORE for the same deal. Bottom line, 3G license are going to cost them roughly double their current annual profits, for the licences alone, and that's without paying for the additional infrastructure. Their client base splits roughly 2 PAYG for each Pay Monthly contract, and that means they need a MASSIVE revenue increase which - under the current structure - will have to be earned from the 1/3 who have "billed" contracts. That's insane. To minimise losses, they need to convert as many PAYG customers as they can as FAST as they can to billing. The time to start isn't when 3G comes on stream. It's YESTERDAY, because it's going to take a LONG time to bear fruit. One could almost believe that the US department of Defence was running things - playing it "one move at a time", like the (bad!) chess players they are.

[Guest Big Ron - No Longer a Mem]

Wow. I just visited Orange at www.orange.co.uk/changes They really DO listen - and then do exactly the opposite of what the good advise said they should. Revealed.. a whole new range of tariffs (starting 1st May) to make it MORE ATTRACTIVE to stay with PAYG. We also see the return of the "£50 discounted topup". (top up by £50, and get cheap calls. Last time it was 50% off, this time it's less. My previous £50 lasted me 18 months!) Well done Orange.

I had the continual impression during my time with them that they lacked a certain something in the "joined up thinking and communications" department". That each department lacked the understanding that they were all part of a larger team, called "Orange". The result was that if YOUR section could generate savings , then it was a GOOD THING... eben if the savings meant that a different department's costs rose by double what you'd saved. That, after all, was THEIR problem. It's like a soccer team that thinks "the side with the player who scores most goals wins". Not so much a "team" as "eleven players all wearing the same colour shirts". We've seen it here - the PR department releasing information to the public... but not to their own CSR's. Makes the people you're supposed to rely on look less than reliable.

[Guest Gorskar]

Heh, that text saver sounds like a good way for the savvy user to save a bundle of cash. 1800 texts a yr for only £20 = 1.1p per text message!

the group saver looks a good option also!

[Guest amo]

Works out cheaper than that mate as its actually 1825 texts and with the 20 fee you get a fiver worth of airtime. So in effect you pay 15 quid for the sms's and a fiver for the credit. however, the group saver (which has been out for ages) cant be used in conjunction with text saver

[Guest Gorskar]

H yes, now that I read the actual details I see you're right!

Now what they really need to do is offer options like this on contracts to try and tempt PAYG customers to switch.

Many people are worried about nasty bill surprises on switching to contract.

Orange need to offer services to belay these fears, such as the ability to specify a billing cap for the month (perhaps a bit flexible, so that if you hit it, you can ring them up and ask them to extend it by an extra fiver or something.)

Perhaps a text message sent to your phone when you have run out of inclusive minutes, and then a text for every £2 you spend after that.

I don't know - but making PAYG more attractive, and then making contract less attractive (YOURPLAN is in general more expensive than before and no longer do you get free insurance - PAYG customers can get orange care for the same price as contract!) hardly seems to way to get PAYG to transfer to contract eh?