The free gifts actually help in promotion of any product or service very easily. Moreover, the case of ‘monopoly’ no longer exists in any arena of business. Where there is only one individual earning profits in any particular he is bound to have a competitor very soon. The main aspect that rules the economy is [...]
The technological progress has given us several feature rich gadgets to facilitate our various requirements. People are becoming more dependent on various gadgets for their day to day works. However, this serious effect can be described in both negative and positive manner. These tiny feature rich widgets support the people in their various ways and [...]
Since its launch in 2003 the UK’s fifth mobile phone network 3 has tried in vain to persuade customers to watch TV and video-call each other; experimented with a pile-’em-high-sell-’em-cheap strategy that saw prices across the industry collapse; infuriated its customers with clunky technology and poor coverage; blown through £10bn of its owner’s money; and more often than not been dismissed as a bit of a joke.
Now, after just over a year in the job, chief executive Kevin Russell reckons he can make it the one thing it has never been: a success. “We have spent all of 2007 and part of 2008 just getting back to the starting line,” the 42-year old Scot admits, seated in his office at the company’s headquarters in Maidenhead, Berkshire. “The key for us in the rest of this year and for the next five years is we have to be growing, not consolidating. We have got to more than double the customer base.”
That’s a tall order. The company has been stuck between 3 million and 4 million customers - it currently has just over 3.7 million active users - for the past three years. Even if Russell succeeds, 3 would still be only about two-thirds the size of its nearest rival, T-Mobile. He also has to stem the company’s losses as owner Hutchison Whampoa, the Hong Kong-based conglomerate that created Orange, seeks to push its entire mobile business - which includes operations in Italy and Australia - from a half-year loss of £228m into the black before financial charges by the end of this year.
But Russell reckons he has already scored a notable success with the company’s mobile broadband service, which has attracted over half a million users in a year. He has also clinched a crucial network-sharing deal with T-Mobile that will cut costs and moved the majority of the firm’s distribution into almost 300 own-brand stores.
The main problem now is the regulatory regime in the UK, which is preventing him offering the sort of all-you-can-call packages seen in countries such as the US and Germany. At issue are mobile termination rates. These incredibly complex charges are levied by the mobile phone companies on each other and fixed-line operators such as BT for the privilege of connecting calls to mobile customers. EU telecoms commissioner Viviane Reding wants to see them come down substantially and last week Ofcom raised the idea of scrapping them altogether when its current set of price caps expires in 2011.
But 3’s rivals are screaming in horror at the prospect of charges that make up almost a quarter of their revenues - several billion pounds a year - being taken away. Vodafone warns that 40 million Europeans could be forced to abandon their mobile phones as the mobile networks increase call charges and put up handset prices. If termination rates are scrapped, others have warned, mobile phone users will be charged to receive calls, not just to make them.
This is utter rubbish, according to Russell. “If you cannot economically justify termination rates all you have left is scaremongering, the essence of your argument is weak and all you have is rhetoric.” He adds: “We would not, categorically not, charge customers to receive calls.”
It’s a far cry from the company’s position before Russell’s arrival. He inherited a long-running spat with Ofcom in which the company was trying to defend its right to charge an even higher termination rate than its rivals.
Russell, who joined as deputy chief executive at the start of last year having got 3 Australia to break even and reach a million users before taking the top job last June, is reluctant to criticise his predecessors in public. But he has executed a complete strategic U-turn. Now he wants Ofcom to move even faster to scrap termination rates so the mobile phone industry can start offering the sort of flat-rate deals already seen in the fixed-line world.
“You expect your local regulator not to give you a leg up but to give you a level playing field to compete on. That has not happened in the UK in my view,” he says. “Ofcom’s recent mobile sector assessment is really encouraging. But - and it is a big but - the idea that we will deal with everything in 2011 … is not good enough. If you have identified an issue and you know it is not right then it should be dealt with earlier.”
As well as his U-turn on regulation, Russell has dumped any pretensions that 3 had of being a multimedia company. When the service launched under Colin Tucker, who had worked with Hutchison on the creation of Orange, it was all about video calling and football clips, but take-up was slower than expected and early customers found the handsets clunky and the network patchy. Less than a year after launch, the regulator was receiving 14 times more complaints about 3 than about any of its rivals. But the multimedia theme is one that Tucker’s successor, Bob Fuller, returned to as he looked to improve margins after trying to grab customers by slashing prices.
Russell, however, has little time for such grandiose ambitions. “We are quite simple - we provide communications-based services. I do not see us pushing to create a whole series of revolutionary behaviours - what I do see is us helping people to do what they do today, when they are out and about.”
With that in mind, he would rather like to get his hands on the iPhone if Apple’s exclusive deal with O2 comes to an end. He is also not particularly bothered by Nokia’s attempts to get into mobile music and mobile gaming because “I am not sure that we have done enough to own the content space. If Nokia or someone else comes forward with a product which provides a better experience than we can provide, we need to be open to that.”
It’s a refreshingly pragmatic change from the view of some of the other mobile phone companies that they can be all things to all people and is characteristic of Russell, who is plain speaking without the arrogance that often entails.
The question, however, is whether Russell will get the chance to see out his five-year plan. Ever since 3’s launch there has been speculation that Hutchison will sell out, having done so well out of other mobile businesses such as Orange and Hutchison-Essar in India, with T-Mobile seen as an obvious buyer. But Russell is adamant that “you cannot build a business with one eye on an exit” and his five-year plan is his idea, not that of his boss, Canning Fok, or Hutchison’s chairman, Li Ka-shing.
Russell has worked for Hutchison since 1995. At the time, he was working as an accountant and playing semi-professional football - a rather useful centre forward, apparently - in Hong Kong, having settled there five years earlier while backpacking round the world.
That is about all the personal information you can squeeze out of him, other than the fact that he has a house in Sydney and anyone who visits from Australia has to bring four packets of Tim Tam biscuits with them because he can’t buy them in the UK. He simply does not buy into the “cult of the chief executive”.
“I have quite clearly come with a view that by 2011/12 this is going to be a successful business. If I have done my job well then I will have brought through leaders and managers who can take this business forwards arguably better than I can. I do believe that chief executives have a finite value to add.”
His bosses in Hong Kong will be hoping the value he does bring to 3 will be the sort you can put in the bank.
Born
July 22 1966
Education
Dunblane High School; Heriott-Watt University (accountancy and computer science)
Career
Accountant, Ernst & Whinney; group finance manager, Hutchison Telecommunications 1995; director of finance and operations 1996-98; chief financial officer, Partner Communications (Israel) 1999-2000; chief executive,3 Australia 2001-06; deputy chief executive 3 UK January 2007-May 2007; chief executive June 2007-
Family
Married with two sons
Hobbies
Sport, espec
ially football
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As many of us are aware, 3 is one of the best network providers in the UK market that boasts of varied deals to suit the requirements of different categories of users. Fun loving people with preference for live Mobile TV, full length audio and video music tracks, multiplayer games, mobile broadband, face to face [...]
Nokia, the world’s largest mobile phone company, will launch an all-out assault on Apple’s iPhone today with a new range of phones that will give music lovers access to an unlimited service.
Anyone willing buy a Nokia Comes With Music pre-pay phone will be able to download up to 2.1m music tracks - about a quarter of the number available from Apple’s iTunes - onto their computer for no extra charge for 12 months.
Those tracks can be loaded onto the Nokia phone and after a year users will need to buy a new device in order to continue downloading new releases. In contrast to other so-called unlimited music services, however, if they choose not to buy a new device, they can keep all the tracks they have already downloaded.
They will still play on the user’s computer and handset, which will also still be able to send texts and make calls.
Nokia, which is hoping the phone will be popular this Christmas with parents seeking to make their children’s music file sharing legal, will today announce that the UK will be the first market to get Comes With Music.
The first phone will be its 5310 handset, although at least one more device will be announced in time for Christmas.
The company has signed up Carphone Warehouse, which has more than 800 shops, to stock the phone. Carphone Warehouse is also Apple’s sole independent stockist of the iPhone.
Nokia’s UK managing director Simon Ainslie believes the Nokia Comes With Music range will be “the number one selling product at Christmas”.
“This is a unique proposition. Nobody has launched an unlimited music service that allows you to keep your music with no catches,” said Ainslie. “What we are trying to do is bring back some value to the music industry from people who are not paying for music. There are a lot of parents who would like to legitimise their children’s purchasing of music.”
Already some internet service providers (ISPs) have sent letters to persistent illegal file sharers warning them that their activities have been noticed, having reached a deal with industry body the BPI. For many parents this will be the first indication that their children are doing anything illicit on the internet.
Nokia Comes With Music, which was first mooted last year, is a gamble for the Finnish handset maker, which supplies four out of every 10 phones sold worldwide. It risks further damaging Nokia’s already fraught relationship with many of the major mobile phone companies. Last year it provoked their ire by announcing its own suite of mobile services - under the Ovi brand - which operators saw as a direct attempt to undercut their relationship with mobile phone users.
In fact, Nokia does not yet have a mobile phone partner for Comes With Music. As a result anyone buying the phone will have to put their existing SIM card into it or sign up for a SIM-only deal such as O2’s Simplicity.
All five UK networks have held talks with Nokia about Comes With Music but none has found the service attractive - or lucrative - enough to sign up. All the operators have their music download services and see no reason to subsidise a handset that connects users with Nokia’s own music store rather than their own. But Nokia still hopes to persuade an operator to subsidise the cost of the phone, which is why it will not set the price of the first handset until next month. It is expected to cost somewhere between £100 and £300.
Nokia has decided to press on with its unlimited service because of the threat posed to its dominance of the industry by Apple, according to mobile industry insiders. Sales of the iPhone are still small - with analysts forecasting 45m will be sold by next year compared with a global market of about 1bn handsets - it could soon be made available on more networks as the original exclusive network deals it signed in the UK, France, Germany and the US come up for renewal over the next few years.
Nokia will pay the music companies a licence fee to make their catalogues available to customers and for the three major labels that have already signed up - SonyBMG, Universal and Warner Music - the service is another attempt to try and claw some revenue back from the illegal file sharers. But Nokia has yet to reach a deal with the UK’s host of independent music labels or EMI.
“Comes With Music is a way for Nokia to add extra value to its handsets and generate more stickiness for its brand,” said Carolina Milanesi, research director at Gartner. But Nokia has tailored the service to the economic downturn in its major European markets.
“The 5310 handset is definitely more aimed at the mid-tier of the market - this is not the high-end device that people were expecting to see for Comes With Music,” she added. “They are responding to the trend we are beginning to see in Europe of people switching towards the mid-tier because of the economic climate.”
Nokia Comes With Music is the latest attempt to make digital music pay by bundling the cost together with another service or product - in this case the cost of the handset. There are already numerous subscription-based unlimited music services such as Napster and MusicStation; even Apple is rumoured to be working on one for iTunes. Rather than charging a separate subscription, the Danish internet firm TDC has bundled the cost of unlimited music with its broadband service. BSkyB recently signed a deal with Universal that could lead to a similar service in the UK. In France, Orange has launched MusiqueMax, which allows users to download up to 500 tracks a month for €12 and keep them as long as they like. All these services have some sort of digital rights management (DRM) software that prevents tracks being played after a subscription expires or means they can only be transferred to certain devices. Nokia Comes With Music uses Microsoft DRM technology, so downloaded tracks cannot be played on an iPod. Others in the music industry believe the future of digital music lies in offering DRM-free tracks that can be played on any device. Such tracks are already sold by iTunes, Amazon and handset maker Sony Ericsson in the Nordic region.
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Mobile screen savers can be some sort of animations, text, picture and a lot of other such patterns that you choose to have on your mobile when it is not in use for sometime. It can be an inspiring text in the form of a quotation, or a funny animation or may be a picture [...]
Nokia has mobile phones in entry-level for the mass as well as they have their highly distinguished Vertu brand for the class. Nokia mobile phones have placed themselves in all technologies and innovations. Not to forget their counterparts like Samsung phones, Lg phones, Sony Ericsson phones etc. Even they have well established themselves in different [...]
In the present times, mobile phones have turned in to highly functional gadgets, which can perform more than one task in a simplified manner. It has come a long way since the times, when these were used only for conversing or exchanging messages. Nowadays, you can do very many things with a mobile phone handset. [...]
Ericsson is putting its wireless microchip business into a joint venture with its Franco-Italian rival STMicroelectronics as the companies look to expand their customer base in the face of slowing mobile phone sales.
The new business, which will be jointly run by the two firms, will be number three in the mobile chip industry behind the US leaders Qualcomm and Texas Instruments. Based in Geneva, the as yet unnamed venture will employ nearly 8,000 people in a unit that last year would have generated $3.6bn (£1.9bn) in revenues.
The deal was warmly welcomed by Nokia, one of the venture’s key customers, as “a positive move” that would create a “strong industry player”. Analysts, however, pointed out that the Finnish firm, which makes four out of every 10 handsets sold worldwide, is no fan of Qualcomm, having been embroiled in bitter legal disputes with the US firm, and a stronger European rival would suit the company.
Ericsson is putting its mobile platforms business, which specialises in modems and designing multimedia phones, and $1.1bn in cash into the venture. STMicroelectronics, created just last month through the merger of STMicro’s mobile phone chip business with NXP Semiconductors of the Netherlands, will put in its wireless chip-design business, worth an estimated $1.2bn.
The venture will supply chips for handsets ranging from bottom-of-the-range pre-pay phones to the next generation of internet-enabled multimedia devices. As well as Nokia, the new venture will count SonyEricsson, Samsung, LG and Sharp as its major customers. The only one of the top five handset makers the venture does not supply is the US-based Motorola.
Ericsson’s chief executive, Carl-Henric Svanberg, will be chairman of the board of the business and STMicroelectronics’ chief executive, Carlo Bozotti, will be vice-chairman.
The deal comes as sales of mobile phones begin to show some signs of slowing down and there is consolidation in other parts of the industry. Last month, for instance, Nokia took control of the British mobile phone software company Symbian. Nokia helped create the business, with the UK-based Psion, 10 years ago.
Yesterday’s deal will allow Ericsson to focus on its telecoms networks business, which has suffered as the credit crunch bites and operators rein in spending.
Analysts warned that the venture could be bad news for the UK-based Arm Holdings, which designs processor chips for mobiles. Nick James at Panmure Gordon said the deal - along with STMicro’s acquisition of NXP - represents “a pretty intense wave of consolidation”.
Though the deal does not directly challenge Arm’s position as the dominant processor architecture for mobile phones, he said, “it does reduce the number of potential licensees and may put further pressure on Arm’s licensing revenue.”
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The traditional picture of the British family spending its evenings slumped in front of the TV has changed dramatically, according to a new report from the watchdog Ofcom, published today. The box is still on, but the people on the sofa are talking on the phone, texting furiously or surfing the internet - increasingly using a laptop with a mobile broadband connection - while they keep one eye on the screen.
Despite doomsayers who believe the web will eventually kill off TV, viewing has not yet collapsed. The average Briton spent 218 minutes - or over three and a half hours - a day watching television last year, two minutes more than in 2006 but down on 224 minutes in 2002. In comparison, the average internet user spent 24 minutes a day online when at home last year, up from just six minutes in 2002.
But what has changed is that the TV no longer has the viewer’s undivided attention, according to Ofcom’s annual Communications Market report. Three quarters of 20- to 34-year-olds regularly use their mobile when in front of the TV, while more than a third of 25- to 44-year-olds often check the internet at the same time as watching a programme.
Television is finding itself increasingly usurped among the young. While TV remains the “media activity” that British people above the age of 20 say they would miss most, 16- to 19-year-olds say it is a mobile phone they couldn’t live without.
The report shows the UK’s continuing love affair with the mobile. More people send a text every day than access the internet and there are more phones in circulation than there are people in the UK. Nearly 60 billion text messages were sent last year - up 36% on 2006 - and mobile phone users talk on their phone for an average of 10 minutes a day, double the usage recorded in 2002.
The mobile phone and other distractions mean young people are watching fewer TV shows, with 16- to 24-year-olds glued to the set for about 150 minutes a day in 2007, 10 minutes less than five years ago and more than an hour less than the UK average. People over 65, in contrast, spend five hours a day watching TV.
Instead, younger people are spending more of their time online but with download and streaming services such as the BBC’s iPlayer reporting record demand, many are merely choosing to watch their favourite TV programmes when they want by getting content from the web. Nearly a third of all internet users watched video clips and webcasts last year with the number of UK users of YouTube hitting 9 million this April alone - up 50% on a year before.
Throwing off the shackles of the TV schedulers is not just the ambition of people with an internet connection. Almost a quarter of UK households - 6 million - had a digital video recorder by the end of last year, up 53% on 2006. DVRs allow people to store their favourite shows for viewing later. Their success is bad news for advertisers who use commercial television to get in front of a mass audience. Of those with a digital recorder, 88% always skip past the ads, according to Ofcom.
But when they do watch “traditional” television, the taste of 16- to 24-year-olds is remarkably similar to that of those over 65. Both like entertainment and contemporary music shows while 16- to 24-year- olds watch slightly more soap operas and factual programmes than pensioners. The big difference between the age groups, according to the report, is in the area of news and weather programming.
Among pensioners, 14% watch TV news and weather programmes, compared to just 7% of 16- to 24-year-olds.
The Ofcom report shows that online advertising hit £2.8bn last year, up 40%, and eclipsing spending on the traditional terrestrial channels ITV1, Channel 4, S4C and Five for the first time. Given how much more time people spend watching TV than using the internet the figures look incongruous, but the Ofcom report does not take into account the amount of time British consumers spend online at work.
In fact, take-up of residential internet services is slowing as the digital divide between rich and poor becomes ever more obvious. Most households that have a computer are already online with PC penetration running at 72% in the UK and internet penetration close behind at 67%. Broadband take-up - at 58% of UK households - has slowed not least because younger consumers such as students are opting to buy mobile phone “dongles” that give internet access and are often cheaper than a lengthy broadband contract. Over 2 million Britons now use mobile internet services, with sales of dongles nearly doubling between February and June this year to over 130,000 a month.
British households are wasting the annual output of a large power station by failing to switch off their flatscreen televisions, set-top boxes, and internet networks when they are not being used, according to Ofcom’s latest Communications Market report.
The equivalent output of the 1,500MW Didcot B power station in Oxfordshire could be saved each year if every home with a set-top box switched it off at night; that would conserve enough electricity to make 80bn cups of tea.
Consumer electronics account for about a third of home energy use, according to the Energy Saving Trust, but that use is forecast to balloon to 45% by 2020 as more people buy more gadgets.
The rise in average residential energy bills to just over £1,000 a year has made people more energy aware, but only when it comes to buying obviously power-hungry devices such as fridges and freezers, according to Ofcom.
Almost three quarters of Britons, when quizzed by the regulator, classed themselves as caring about the environment, and more than half said they had compared the green credentials of white goods before making a purchase. But only 39% of people think about the environmental impact of a new TV, DVD player or computer.
When they get it home, meanwhile, most people leave their new kit switched on all the time, unnecessarily wasting electricity.
Three quarters of people rarely switch off their set-top box, according to Ofcom, and that figure jumps to 83% for owners of a wireless home network. Plasma screens are particularly power hungry, according to the regulator, with the average set using three times the power of a normal TV when in use, and twice the power when left on standby.
The average satellite set-top box gobbles up four and a half times the power of a flatscreen LCD television in the same state. Even a Freeview box uses twice the power of a flatscreen TV when left on standby.
Almost half the country’s mobile phone users, meanwhile, waste electricity by charging their handsets overnight, when in fact most models only need to be plugged in for about two hours. People aged between 16 to 24 are particularly guilty of this, with 80% doing it at least some of the time.
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