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3, the mobile operator with the dubious brand name, has teamed up with Yahoo to finally allow its users to access the web via mobile handsets.

The telecoms group today announced a global agreement with Yahoo to demolish its ill-advised 'walled garden'.

Despite being the first mobile operator to roll-out a 3G network in the UK, 3 users haven't been able to visit websites of their own choosing, instead being force-fed a diet of 3-approved websites and services.

Now, in mid-2006, the company has changed its tune and will integrate various Yahoo services into its mobile web offering, including Yahoo! Search, Yahoo! Mobile Web, Yahoo! Messenger, Yahoo! Mail, and Yahoo! Go for Mobile.

3 said: "This agreement breaks new ground in the convergence of the online and mobile experience by bringing some of the world’s most popular online content and services to mobile broadband handsets."

How exactly is this "breaking new ground"? T-Mobile's Web'n'Walk offering works perfectly well and has allowed me to access the web without imposing 3-esque restrictions. And what's all this about "mobile broadband"?

But wait, there's more flowery PR statements in the press release: "For 3, this is another step in a series of landmark deals that will open up a range of no-nonsense Internet-based services to its global customers and will drive customer acquisition, usage and traffic on 3’s mobile networks."

I guess partnering with Yahoo can be described as a landmark deal, but as ever it is 3's focus on customer acquisition that is most troubling. Customer retention should be the company's priority, in my view.

God knows what customer churn is like at 3, if my experience as a consumer is anything to go by. I spent the first six months trying to explain to customer services that I was unable to send a text message on my shiny new 3G handset. Rubbish.

I racked up about 30 hours of telephone calls in that timeframe (with no successful outcome until head office was contacted) and have a mortal loathing of Norah Jones as a result (3's choice of non-soothing hold music). Not what I expected from my first 3G experience. And since 3 occupies the unfortunate position of being one of the most-hated brands in the UK we can assume that I’m not alone.

Roll forward a couple of years and it looks like these are desperate times for 3. James Bashford of Enders Analysis told the Sunday Times last month that he believes churn rates could be running at "more than 50%".

More broadly, the company does not appear to be in good shape, and like many struggling companies 3 seems blinded by a desire to acquire yet more customers, rather than trying to keep existing ones happy.

Think of all those expensive, weird TV and press ads, and the low-rent subscription rates and the free handsets 3 gives away to lure new customers, not to mention the fees it pays out to a number of unethical third party sales houses to randomly contact / annoy consumers by giving them the hard-sell. When the hell did I opt in to that sort of marketing? And how do I opt out?

You can only wonder how much 3 spends on customer acquisition. But unless it learns how to hold onto customers for (much) longer it might as well not bother.

Customer retention and growing average customer lifetime value is of paramount importance if 3 ever expects to generate a return on investment for Li-Ka-shing, the billionaire chairman of parent company Hutchison Whampoa.

Never has it been so difficult to avoid a pun...

Chris Lake

Published 30 June, 2006 by Chris Lake

Chris Lake is CEO at EmpiricalProof, and former Director of Content at Econsultancy. Follow him on Twitter, Google+ or connect via Linkedin.

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Comments (1)



Customer retention and growing average customer lifetime value is of paramount importance if 3 ever expects to generate a return on investment for Li-Ka-shing, the billionaire chairman of parent company Hutchison Whampoa.

about 7 years ago

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