Despite the lack of widespread coverage in the press, some pretty significant news was release by Three last week. It will revamp 313 stores to sell internet-connected devices and broadband packages in a bid to tap into the home worker market.
As reported in This is Money, the strategy includes selling mobile broadband to home workers who have moved to more rural locations and need reliable connections, and gadgets and devices made popular by the pandemic such as film projectors.
Robert Finnegan, Three’s CEO, said they are not going after the Curry’s market but it’s certainly a strong statement of intent that there’s a market to be had.
It might also be making a few analysts scratch their heads – Is it flawed logic or complete genius? So many brands that have played in this market have left the high street in recent years. CPW was the latest casualty so investing in a retail footprint will have mustered some courage.
That seems to have been fuelled by a trial in Ireland. Trials are always sensible when making such a bold move. But from experience of working in Ireland, I can testify that the Irish market is very different to the UK’s. Plus, the Three market share is greater in Ireland which could skew results.
Even so, selling broadband connections is sensible. Both Carphone Warehouse and Vodafone moved into the space. They had big customer bases and wide-ranging segments to work with. Vodafone reported figures this summer of 940,000 connection, with 467,000 of those converged. However, could the pandemic have had an influence on things? Do we need to see a ‘normal’ year to know whether it’s been a real success?
The move to broadband is sensible and fits with the Three portfolio that’s centred around selling services. Plus, as we know, acquisition in the air. Robert has said they are looking for the right brand to come along. When you consider Hutch has the financial muscle power to help, diversifying the portfolio might not be such a risk. Rather it’s a move that is complementary to the products and services that the short list of targets sells.
Whatever the planned outcomes, this needs to be a success. It’s not a cheap exercise and converting the strategy to revenue will be watched closely.
Certainly, there’s a big challenge ahead in terms of re-positioning the brand from one that sells to individuals, to one that sells to families and households.
Reinvention is not impossible by any stretch. The insight they gathered in Ireland will be providing the impetus to suggest it can make the move. But whether Three can make it happen in the UK, and in quick time, to compete with the established players remains to be seen.
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