Three Brief

Spring 2011
The New Silicon Valley?
The idea of turning the East End of London into a technology magnet to rival Silicon Valley intrigued us at Three HQ. Weather aside, can Shoreditch really rival San Francisco when it comes to leading global innovation?
Much of the internet technology that is now mainstream in the UK started its life in Silicon Valley. The Valley is home to technology powerhouses like Facebook, Google and Apple, as well as new innovative players like Twitter, Foursquare and Zynga. It’s where ideas are generated and brands are born. The Valley is built up around Stanford University. The West Coast attracts raw talent and brain-power and matches it with private investment from businesses eager to pick out computing science genius before it even leaves the classroom. London can certainly boast globalstandard universities too. City University, Imperial College, UCL, LSE and LBS are all seen as leading lights, and they’re all a tube ride away from East London. London is a major player in many global markets and maybe this can be extended to technology and innovation. However, this effort is going to need more than willpower and a few conveniently located universities. It needs infrastructure to back its vision and provide the backdrop which will lead established and new technology players to take this aspiration seriously. If the Government wants to achieve its vision of a new Silicon Valley, then it must place mobile front and centre of its broadband strategy. Mobile is no longer just about voice and text. New mobile is the internet. It’s about connecting wherever you are and being able to do

Say hello to New Mobile.
Socialise.
Catch up.

what you want when you want. The internet has gone mobile, and by the next General Election, more people will access the internet on a mobile device than they will using a fixed PC. The UK needs the infrastructure to support this. Earlier this year, President Obama set out his vision for mobile he acknowledged the critical importance of making more mobile spectrum available to meet the demand for mobile internet services. Not long ago the UK led the world in mobile services. Delays in the UK’s own spectrum plans mean this country now lags behind. Thankfully, Ofcom is now proposing to release new spectrum (see pg 3 for details) to stimulate competition in the mobile market. This is key to driving innovation and the roll-out of new mobile services across the UK. Three was created at the last spectrum auction specifically to stimulate competition. Since then we’ve led the market in innovative new services, built the UK’s largest 3G network and lowered prices to the benefit of consumers and business. It is, therefore, essential that the next spectrum auction stimulates competition further. Auctioning new spectrum to stimulate competition will drive growth, innovation and leadership. With this, perhaps Shoreditch really can be the next Silicon Valley. Although we wouldn’t recommend the surfing in London - unless it’s on your mobile, of course.

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Unlimited Data on Three.
Three is now the only UK mobile network to offer all you can eat data on our handsets. We do this because, unlike our competitors, our network was built for data from the ground up, and we believe that the internet should be truly mobile.

EDM 714: Mobile Number Portability
That this House notes the recent changes to the UK’s mobile number portability system which Ofcom has introduced; is concerned that the UK remains the only country in Europe where consumers have to ask permission of their existing provider in order to switch to a new provider; believes that quick and easy switching is fundamental to competition; and calls on Ofcom to re-examine the issue of recipient-led porting without delay.

Three Brief Spring 2011 Edition.

Three Fact:
There are over 1 billion Facebook page views on the Three network every month.

Ofcom set to delay improvements to mobile switching.
Ofcom appears set to delay further changes to mobile number portability which would have given UK consumers the same rights as their European counterparts. Ofcom has indicated that rather than adopt a ‘gaining provider led’ system which puts the customer in charge, they are likely to maintain the ‘losing provider led’ system, which gives control of the switch to the customer’s network. Ofcom argues that it wants to see how the recent reductions in the timescales for mobile switching work before making any further changes. However, the recent changes fail to address the fundamental problem which is customers having to ask permission from their provider to switch networks and take their number with them. The decision also flies in the face of evidence which Ofcom Chief Executive, Ed Richards, gave to the Public Accounts Committee at the end of last year when he told members that Ofcom believed “the system should overall move from “losing provider led” to “gaining provider led”, which makes it easier and more convenient for people to switch.” With Ofcom now saying it is unlikely to revisit mobile number porting until late 2012 at the earliest, it is critical that Parliamentarians add their voice to the calls for change now. MPs can add their support by signing EDM 714 on Mobile Number Portability.

Mobile internet set to overtake fixed within three years.
Over the past two years, internet traffic on mobile networks has exploded, with Ofcom reporting a 2,200% increase in data traffic on mobile networks in 2009 alone. Indeed, Morgan Stanley, Gartner and Ovum all predict that mobile internet access will outstrip fixed PC access during the lifetime of this Parliament. It is, therefore, critical that Government and regulator foster a competitive mobile market that supports the development of the UK’s mobile infrastructure. It is, therefore, critical that Government policy recognises and supports the importance of mobile broadband. Data traffic on mobile networks has exploded. Ofcom reported a 200% increase in data traffic on mobile networks in 2009 alone, whilst data on the Three network now comprises 97% of all traffic. This trend is placing huge capacity constraints on Three and the other mobile networks. The launch of the iPad is simply the latest move that heralds a mobile data explosion in the UK. There is an urgent need for additional spectrum to be made available to support the take-up of mobile internet services. Spectrum. The first significant step towards building that infrastructure will come in next year’s spectrum auction which will release much needed new spectrum to meet growing demand for mobile broadband. It is critical that the auction is run so that it stimulates competition, drives innovation and extends coverage. The last spectrum auction in 2000 set out specifically to inject competition into the mobile market. By ensuring that all five network operators held roughly the same amount of 3G (2100MHz) spectrum, and requiring that 3G services operate on this and no other spectrum, a level playing field was created. This stimulated competition between operators resulting in increased 3G rollout, lower prices and innovation and investment in new mobile services. However, in January this year, Ofcom lifted the restriction on the use of other spectrum for 3G services, thereby giving those networks who were gifted 2G spectrum in the 1980s and 1990s a significant market advantage. There is a real risk that, unless the auction addresses this advantage, competition will be distorted and the consumer benefits that have flowed from a competitive market will be lost. Ofcom’s proposals. Thankfully, Ofcom has considered these issues carefully and, in its recent consultation on the upcoming auction, it commits to re-establish competition by guaranteeing to create a market with four wholesale mobile providers. Unfortunately, that position is already under attack from the larger operators and Ofcom will need support from a range of stakeholders to maintain its position. In the USA, the network with the smallest amount of spectrum has announced it is being bought out by a competitor with more spectrum (and, therefore, a better position to compete). There is a risk here in the UK that unless all four players have more-or-less equal amounts of spectrum, one of the networks will disappear. This would be bad news for competition, coming hard on the heels of last year’s T-Mobile/Orange merger. Ofcom’s consultation runs until 31 May. If you would like to know more about spectrum and its importance in delivering the infrastructure the UK will need, please get in touch.

Mobile Termination Rates to drop at last.
Ofcom has announced a significant reduction in Mobile Termination Rates (MTRs) following a widespread campaign led by over 60 organisations (including the FSB, NUS, Post Office, BT, Three, Unite and Age Concern). The Terminate the Rate campaign was backed by over 160,000 individuals and 262 MPs who signed a supportive EDM prior to last year’s General Election. MTRs - which are the charge one network makes to another for ‘terminating’ a phone call - will fall over the next three years, coming down to 2.6p in 2011, 1.7p in 2012, 1.1p in 2013 and arriving at less than a penny in April 2014. Although these charges are higher than those outlined in the regulator’s original proposal, and phone users will have to wait three years to experience the full benefits of low MTRs, this is still good news for UK consumers. We expect the larger mobile operators, who have consistently opposed lower MTRs, to challenge Ofcom’s decision so it’s critical that Ofcom continues to receive widespread support for its decision.

New mobile boost for Maidenhead Street Angels.
Earlier this year, Street Angels Maidenhead, a newly formed group of volunteers, launched a new scheme to help people stay safe and get home in the early hours of the morning. Backed by Three, the volunteers are able to stay in touch for free using Skype on our 3G network. Three is the only network to offer free Skype calls to all its customers and with Three’s unique all you can eat data tariff, customers never have to worry about sky high bills. Three was, therefore, delighted to provide Street Angels with handsets and pay as you go vouchers so that their volunteers can stay connected and reduce costs. We hope that by using our 3G network, the Street Angels volunteers can stay safe, reduce crime and help local residents enjoy their nights out. If you have local projects in your area that you think could benefit from a free mobile broadband connection please contact: julie.minns@three.co.uk

Three Brief Spring 2011 Edition.

MP3 Chi Onwurah, Labour MP for Newcastle upon Tyne Central.
1. Do you remember your first mobile phone? I do indeed. I got it in 1998, just after I’d bought a classic Saab. I thought buying a mobile phone would be a sensible decision as I was always worried that the car would break down! The phone was a Nokia and worked so well that it has influenced my choice of mobile ever since. You could take it out of the box and use it without needing to look at the instructions – exactly as a mobile phone should be. 2. Do you think you could survive a day without your mobile? I definitely could, though I’m not sure how productive I’d be as a Member of Parliament! I would enjoy the peace and quiet, but ultimately I wouldn’t want my constituents to be unable to contact me. 3. Do you think mobile technology has changed the way you communicate with constituents? I must admit, I don’t know any other way of doing so. Almost all of my constituents have a mobile phone. I meet many refugees, homeless people and individuals forced into hostel accommodation as a constituency MP and they all have a mobile number which I can use to contact them. I find this extremely helpful in my role. Also, my BlackBerry enables me to see any issues raised by my constituents immediately. 4. What more can mobile operators do to support your work as an MP? Lots of things! First of all, they could address digital exclusion and arrange for 100% of UK citizens to have access to broadband. Secondly, they could make it easier for me to connect to my constituents and keep them better informed – email is much faster and cheaper than post. Finally, they could provide extra capacity for mobile services and it is for this reason that I am looking forward to the forthcoming programme of spectrum modernisation. 5. Do you think there is a role for using mobile telecommunications to make Parliament more efficient? The British Parliament has a very long history and we need to keep the most useful of our traditions whilst taking advantage of modern technology. So I think there is a role for mobile telecoms in supporting efficient communication with constituents, and keeping us all informed of what is going on in politics. It also should mean I can work as effectively on the train as in my office. We have seen the use of remote voting technologies for MP’s votes in other countries but this has often resulted in poor attendance at Parliamentary debates so I’m not sure that is such a good idea. 6. If you could use your mobile to keep up to date with one issue each day what would it be? I would like to be kept up to date on economic growth. It is vital to stay informed about this issue. Keeping abreast of the number of start-up businesses being founded, or technical innovations, or orders won by British business, or the employment rate are just some examples of data which is extremely important to me. 7. You’re a busy MP and you spend a lot of time out and about in your constituency. What TV programme would you like to be able to watch on your mobile at any time of your choice? It would definitely have to be Newsnight and Look North, the regional news programme serving my constituency. 8. If Three could give you one video call to anyone in history who would it be? Without question it would be George Stephenson, the pioneering engineer born a short distance away from Newcastle. It would be fascinating to hear how he taught himself engineering to design and build his locomotives which were used in many of the coal mines in the Tyneside area.

Contacts:
If you have any questions about the issues raised in this newsletter, would like a trial of our services, have a suggestion for a Community Network Project in your constituency, or want to learn more about our Corporate Social Responsibility work, please feel free to contact our team:

Julie Minns Head of Regulatory & Public Policy julie.minns@three.co.uk 07782 329 329 Simon Fell Regulatory & Public Affairs Manager simon.fell@three.co.uk 07853 038 352 Jessica Tompkinson Corporate Responsibility & Public Policy Manager jessica.tompkinson@three.co.uk 07575 450 953

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