John Penberthy-Smith

28th June 2007

Mobile Internet Seminar

In ten years time the internet on the mobile will be more a part of everyday life than the fixed internet.

Mobile internet – convenience key benefit

Source : Mobile internet research, March 2007 – 20 in depth qualitative interviews

“It allows me to do what I want, when and where I want, and without a PC”The benefit, at this stage, is not necessarily speed

MINORITY MAJORITY

ALTERNATIVE TO HOME PC

usually at home / work

PRIVACY

usually on the go

DIVERSION CONVENIENCE

It’s easier / fasterthan getting on PC

I can look atwhatever I want

It’s something todo when I’m

trapped / bored

It allows me to dowhat I want to do

…without a PC

Internet Market AnalysisVarying levels of involvement by UK operators in Mobile Internet. Developing trend to offer a flat rate monthly fee, as well as pay-as-you-surf for casual users.

High

Low

3 offer X-Series applications, Yahoo! Search and mobile page adaptation, as well as unrestricted internet access.

Vodafone offer some applications (such as Google Maps) and mobile page adaptation, but have usage restrictions.

T-Mobile keep it simple, offering open access with the aid of Google Search, but no mobile page adaptation means they try to keep the internet to PDA devices primarily.

O2 developed iMode, in an attempt to make internet services available for mobile. Beyond this they offer open internet access but nothing to aid the customer.

Orange currently do nothing to aid the internet experience of the customer, but do offer full access.

Mobile Internet on 3Central to 3’s business• X-Series launched Nov 06 – leading the way

• Best internet applications – Skype, Yahoo, Windows Messenger, Google, Sling, Orb, eBay

• New pricing model – flat rate charging

• Global deal with Yahoo on search, mail and messenger• MSN Instant Messenger launched August 2006• Internet popularity among 16 to 24 year old demographic fits 3 customer base

Access for allSignificant increase in internet usage across customer base

•Yahoo – July 2006 to January 2007 there were 82 million page views. From March 2007 to June 2007 there were 62 million page views

•MSN Instant Messenger – 118 million messages sent and received in May 2007

•Customer research indicates vast majority of 3 mobile internet customers would recommend it and see the service as an integral part of what we doSource : Mobile internet research, March 2007 – 20 in depth qualitative interviews

A simple and rewarding experience will be the critical factor in driving mobile internet use

Product

Price

Place

Promotion

People

Challenge for mobile industry

The future…..

Customers will expect pc convenience - software download becomes the norm

Advertising – what impact will it have?

Mobile operators/established internet players

• how will they work together?

• Sharing the value chain?

Devices – will hardware develop at the same pace as software?

Impact of HSDPA – broadband speeds the internet