Jointly owned VHA (merged 3 and Vodafone company) have hit the buffers and the top brass from both Vodafone and Hutchison Whampoa have been despatched to Sydney to rescue the business.

First thing they have done is to dump the 3 brand and use Vodafone. They are now in the process of encouraging as many 3 customers to switch to Vodafone contracts.

See here: www.three.com.au

3 Australia was one of the better performing businesses of the group and has declined and died quickly after Kevin Russell was deployed to the UK as CEO of 3 UK. He has now departed back to Austrailia to Telstra 3/Vodafone's big competitor.

HWL did not throw endless cash at 3 Australia and what is happening down under could be a clue to what might happen in the UK as 3 has had £10 billion plus invested in it and has only turned in a few million trading profit. With consolodation the name of the game how long before HWL cut their losses here as there is no prospect to recoup anything close to the amount they have invested.

You really have a personal problem with Three don't you?

No more than some have with other networks......check around this board....i.e. http://forums.digitalspy.co.uk/showthread.php?t=1634926

This news is quite significant as it confirms that HWL wont keep ploughing money into loss making ventures and 3 Australia for most of it's life was more successful than it's UK cousin.

I agree with you here. Every post I see from wavejock has a subtle or unsubtle reference to something negative about three.

But anyway, I've seen this coming for a while now, they've been encouraging people to go direct to vodafone since the merger and even swapped 3 Sims for vodafone Sims for existing customers.

Why should this be of any interest to us in the UK.....

Because the Australian telecoms market is a carbon copy of the one here.


/s

Couldnt care less tbh if they fold move elsewhere....

Because it provides some insight to what HWL's strategy and they and Vodafone are both market players in the UK.

HWL's 3 is being discarded in favour of more established mobile branding in the face of heavy competiton, similar to the UK mobile market presently.

Anyway, all of the above was made clear in the original post.

Hasn't happened in any of the other territories in which the Three brand operates, though.

While interesting, this news provides no insights into any strategy Three have in the UK.

1) So you admit to having a personal agenda against Three and your defence is that Thine Wonk writes negative things about O2?

2) Your conclusions are puzzling, it's what happens when wishful thinking clouds someone's mind so much.

First, it's a joint venture, Hutchison Whampoa and Vodafone have equal 50% shares in this Vodafone Hutchison Australia business so I do not see where Hutchison Whampoa have pulled out their money? The same could be said of Vodafone then?

Second, it's pretty common in a merger with two brands that there will be a rationalisation to a single brand. The single brand is either one of the two existing brands or a new brand entirely. The remaining brand is strengthened with numbers and costs are cut significantly by not having to market two different brands.

This is something that was discussed for Everything Everywhere, was the Orange brand going to replace T-Mobile or was there going to be a new brand entirely.

Third, Three has been turned around. If Three can get secure assurances from OfCOM that the auction will be structured so there are four players in the market (I repeat from the previous thread, Three did not ask for special treatment for themselves specifically, simply the auction keeps scope for a fourth player), if Three can get a decent chunk of 800MHz then there is a good chance they will continue. O2 and Vodafone have already had the free allocation of 3G900 licences. EE has been allowed early use of LTE on their 1800MHz bands, something should now be done for Three.

Fourth, with Three handling 40% (IIRC) of mobile data traffic; if Three disappear, the other networks will get much worse, very quickly.

I don't see how.

They have separate markets in different parts of the country.

Then there's the huge mass in the middle that has coverage at all!

The "/s" Wilt wrote at the end of his post means he was being sarcastic.

I have never seen that in nearly 9 years of posting here.

The other thread you quoted Wave is about a parent company having a very rough time and a bleak outlook for their home economy, that is a bit different in terms of the effect it has on the companies it owns.

I'm of the opinion that this is just a jointly owned operation consolidating their brand. The Vodafone brand is bigger, therefore it makes sense. However what goes on in Australia won't effect 3UK much, which is not jointly owned.

Yes, TheBigM was right, sorry for any confusion.

How is this similar to the UK?

Who's discarding it? It's the fastest growing network here.

Looks to me exactly like Everything Everywhere but over there the regulators didn't stop them shutting the less important brand down.

UMMMMMM Oz is a huge land mass wise. it's the 6th largest country by area in the world.. far far harder for a network to implement a service. it also has less than half the population to get money from. HARDLY a direct comparison. O2 (read Telefonica) here in the UK are in a worse state than Three IMHO.

NEXT..

Agree agree agree - particularly with the bit in bold, though I agrere very much with your third point too. Sometimes people forget just how much mobile data traffic Three handles itself, I shudder to think what would happen if all that traffic got dumped onto other networks...


Yes - that's my view on it too, the Three/Vodafone Australia setup is just like EE over here, except with the whole keeping the T-Mobile name going. All in all nothing like what the OP is on about.

Australia is interesting as it is similar to what the development of networks was in the UK.

They have two major legacy providers (Optus and Telstra) who have been in the market since the first mobiles were launched in the 80s. Orange came next along with Vodafone followed by 3.

Hutchison already owned Orange in Australia and decided to ditch that brand when France Telecom took ownership of it so it merged with 3 leaving 4 network providers.

Due to the strength of Telstra and Optus, 3 and Vodafone were suffering badly and merged to become Vodafone Hutchison Australia jointly owned by both companies bringing the number of networks down to three. The recent dropping of the 3 branding is significant as its the first time Hutchison have chosen to remove their high profile brand from a major marketplace, in fact Australia was one of three's better performance markets where they had around 3 times the market share that 3 UK has in the UK now. VHA is making substantial losses and huge efforts are now being deployed to reduce costs and turn the company around. It is in very serious trouble.

So what can be determined from the above is that there was probably never room in the market in the UK (or anywhwre else) for 5 separate network providers. The merger of Orange and T-Mobile, both of whom were much bigger than 3 provides evidence that scale is everything to compete with the big two legacy providers which in the UK are Vodafone and O2.

The above is about businesses and branding not about bandwidth, service provision or anything else. The fact is that since the merger that formed EE there has been significant developments as O2 vastly increased its investment to deliver 900MHz 3G and EE themselves want to roll out LTE technology faster. It makes no difference who owns what as the same amount of spectrum will be available and be used to deliver the maximum amount that can be got from it. For competition three networks are sufficient along with MVNOs which are semi independent.

It's worth clarifying that whilst O2 and Vodafone have had their licences amended to allow 900MHz to be used for 3G that does not mean they get that facility for free. The licence fees for that specturm range are being reviewed by Ofcom and are expeted to be increased significantly to take account of the efficiency gains the latter form of use will deliver.

I actually mean this seriously:

Do you take illegal drugs when you post on here?

How you've managed to link the Australian market to the UK market in this manner is baffling.



The high costs, poor business practices and technical inferiority of the "incumbent" networks suggest otherwise.

When the other networks are forced to consolidate their networks, cut jobs, increase prices and slash allowances, the only network moving in the opposite direction is Three.

Not entirely true as 3 were first to consolodate their network with T-Mobile forming MBNL Ltd which provides a RAN for both companies in the UK. 3 have also subtley increased pricing by repositioning their offers and charging upfront payments for even the lowest spec handsets on contracts. Didn't 3 also reduce allowances to 250MB on their contracts unless you buy either an add-on for unlimited data or the One plan?

There is only so much 3 UK can do with the bandwidth they presently own and after nearly 10 years they still account for less than 10% of the mobile market. At what point do HWL come to the same conclusion as the owners of T-Mobile and Orange? Better a share of something than all of nothing.

BTW: Research other major markets and it will become clear that the UK with 5 networks had more than most others and market pressures have already reduced the number by consolodation.

When you're growing at a record rate, why would you decide to throw in the towel now?

I think that is 'advertising slogan' material. Growing? At what cost? With what churn? With what prospect of making a return on investment?

Every now and again there is an opportunity for a land grab. The smartphone has provided that in recent times and that is what 3's growth is about right now. The more customers they can grab the more they can demand for the business. HWL have had it 10 years and it will never return the billions invested in it. It's not really a long term prospect either but there is the chance that HWL can grab part of a bigger venture by applying pressure, although to date neither O2 or Vodafone have been sufficiently damaged to bother with 3. EE look as if they are in a good position now to defend themselves from competition too so what will HWL do to have the prospect of some return in the UK?

I thought Three was making small profits these days? Obviously these are small fry compared to the amount invested but that money is already gone so it would make no sense to shut it down. They may never see a return on the investment but they definitely won't if they pulled out now.