It's easy for Three to be generous: they don't have many customers

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As millions of people set to fly off on holiday in the next six to eight weeks, we've been writing a lot about roaming charges lately.

And with internet access such a vital component of all of our lives these days it's easy to see why.

After all, why should you not be able to use Google Maps to find our way around a new city in the same way you do at home, or Foursquare to find that one bar you will remember forever?

The good news is that with a good amount of nudging and prodding from Brussels, things are finally going in the right direction: at the start of July new caps on roaming charges came into force.

That's an excellent example, by the way, of the European Union working as intended, to bring positive change for all citizens.

Earlier this week, I wrote about a new service from Vodafone. It's called WorldTraveller and it will allow pay monthly customers and users on some business tariffs to use their call, text and data allowances for £5 a day in a number of countries, including the US and Australia. Vodafone runs a similar and cheaper service in Europe, incidentally.

The story attracted a few below the line commenters who felt £5 a day was a rip off, particularly when Three offers a similar service for 'nowt.

"It's very, very, very rubbish compared to 3's Feel Like Home," wrote Uk Taxpayer. "£15/month SIM only 2,000 minutes, 5,000 texts, All you can eat data, Free roaming to 16 countries, 4G (at no extra cost) when they finish the network build-out, and as the real deal kicker **inclusive tethering** to your unlimited data."

Added Whoopee?: "£5 a day - what a bargain - NOT. More like a total rip off. As Three charge the same in Australia and other countries as back home in the UK I'd suggest that this continuing rip off is good reason to drop Vodafone sharpish."

The comparison to Three's 'Feel at Home' service - I've also been writing about that - is entirely justified of course - actually it's a no-brainer, as far as I'm concerned.

But I'd like to counter with the idea that besides Vodafone actually being entirely justified to charge whatever it likes for you to use the network it bought and built, the two mobile providers are at totally different stages in their lifecycles, and the comparison is unfair.

In the red corner, look at Vodafone, the world's second largest mobile provider with hundreds of millions of subscribers worldwide and billions of pounds of sales in the UK alone.

Then look at Three. In terms of UK subscribers it's a minnow. It may form part of a large multinational comms firm, but it looks and acts very much like a start-up, making stand-out plays to grab attention and new customers.

My argument is quite simple. Three can afford to be generous with its freebies - it has so few customers that the money it loses allowing them to roam for free doesn't really matter, and is potentially repaid in terms of goodwill and word-of-mouth advertising.

If Three was the size of Vodafone, do you think they'd be offering free roaming? Frankly, I doubt it.

1 Comment

1) do you have any actual numbers to back up this article?

2) while Three may not be making billions in sales, I suspect its tax affairs are also more straightforward and it's not been accused (as far as I know) of underpayment, and therefore a firm I have greater trust in.

3) while it may still be a "minnow" [your term], it seems to have quite a lot of stores, has been going for some years (I had a data contract from 2008 for 4 years and only cancelled that when I had one of the unlimited data plans along with generous text and voice minute allowances, at a pretty low fee), and is regularly chosen as having some of the best deals on other websites.

4. While word of mouth advertising may complement other forms, the company uses TV as much as most others (eg when they introduced the 3p / 2p/ 1p PAYG tariff, and more recently on making 0800 calls free, well before the requirement to do so {from 2015}).

I don't see them as having so few users that the developments have no impact on their bottom line, but they have made other moves (such as dropping commission payments following on from overall reductions in monthly fees) while other networks offer from 20 to well over 100 pounds for new contracts via cashback sites like Quidco, so rather than charge a steep monthly fee and then 'reward' those who switch, Three just makes the lower cost its benefit for choosing them.

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This page contains a single entry by Alex Scroxton published on July 10, 2014 12:15 PM.

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