3 beefs up channel for quality

3 is aiming for 50% of its business to come from direct selling: more stores, more content, more quality

Just a year after launching its music download service in anger, 3 has 10% of the entire UK singles market.

At an extended briefing for the press, marketing director Graeme Oxby also said that 3 was the market leader in mobile gaming, mobile TV and entertainment.

3 doesn’t detail its financial figures, but CEO Bob Fuller told us that the company’s revenues from non-voice non-text sources were "about half" of total sales at radio company GCap Media. That would give 3 UK around £110m pa from multimedia and services.

But it’s not just about revenue-earning, either. Ten weeks after launching a free MSN Messenger service on mobiles, the company has seen 100m messages carried on the network. In the same period it counted 30m Yahoo! For mobile searches.

These services are basically free to users (prepay customers are limited to 200 free messages a day, on contract there’s no restriction). Oxby points out that the benefit to 3 comes from increased customer loyalty, reduced churn, and cross promotional opportunities.

The message was that 3 is well ahead of its competitors in understanding mobile content markets. Indeed, 3 cited non-voice ARPU for the first half of 2006 as £10.16 – with the other networks averaging just £4.82.

Clocking up the customers in the first place is key, of course, and it’s clear that 3 is moving strongly into direct sales. It has taken 73 stores from The Link and 22 from O2 model, which will give it around 150 stores by the end of 2006. Add in the Selfridges and Superdrug concessions, and the total number of outlets hits 280. 3 thinks it’s important to be in the High Street partly because that’s the way it can demonstrate the range and quality of its content services to the end user, "a space to talk about the great range of things we’ve got".

By the end of 2007, Fuller wants half of new business to come from the direct route and half through the channel – this year should see the split more like 2:1 in favour of the independents.

Still, the network remains committed to the channel. "It’s all about control – control of quality, control of commissions, and so on" said Fuller. To that end 3 is setting up a new ‘premier league’ of star dealers where extra support is being traded for assurances of quality.

3 CEO Bob Fuller: about £110m pa from mobile content, but work it out for yourself
3 marketing manager Graeme Oxby: leading in music, gaming, TV, and more … 
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