When it comes to 3G networks, it appears that size does matter: 3 is taking Orange to the Advertising Standards Authority (ASA) for claiming that it has the biggest high-speed mobile network, accusing it of misleading and confusing consumers.
The spat between the two mobile phone companies reflects the growing importance of network quality to consumers and threatens to overshadow Orange’s iPhone launch today. Network strength has become a key selling point for mobile phone companies as consumers upgrade to smartphones, such as the iPhone, which require faster speeds and greater capacity.
Orange has rammed home the message in a £4 million advertising campaign in recent weeks, in which it claimed to have the UK’s largest 3G network, covering 93 per cent of the population.
However, 3, which has the fewest customers of the five network operators, argues that it has the largest 3G network. It has complained to the ASA that consumers are likely to be blindsided by Orange’s campaign.
A spokesman for 3 said: “We’re confident that we have the biggest 3G network in the UK — both in terms of geographic and population coverage — built on a 9,192-site network that grows by about 150 sites each week. It’s no surprise consumers are being confused about coverage.”
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Orange, which is thought to have about 7,500 3G masts, said that its claim was based on 3’s latest figures showing that it covered 91 per cent of the population, compared with the 93.4 per cent of Orange.
An Orange spokesman said: “The figure that 3 has published shows that we have a greater 3G population coverage than they do. We think that’s something to shout about and that’s why we’re telling our customers — and theirs — about it. It’s not how many masts you have; it’s where you stick them.”
3 has complained that, if it applied a different measure used elsewhere in the industry to calculate coverage, it would be able to claim to cover 95 per cent of the population “without reaching a single extra customer”. It argued that a third-party judge was needed to apply a common standard for measuring coverage to give consumers “a more realistic picture of 3G coverage”.
The disagreement has arisen despite plans for the networks to co-operate next year as part of a network-sharing agreement that will involve T-Mobile, Orange’s merger partner.
Orange’s iPhone launch coincides with the first-half results presentation of Vodafone, which will face tough questions on its plans to launch Apple’s handset next year. The handset could help to shore up Vodafone’s UK customer base, which has been under pressure after the growth of O2 and Orange over recent quarters.
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Vodafone is expected to reveal plans for more cost cuts to combat slowing growth in mature markets, such as that in the UK, and more competition in high-growth markets, notably India.
The company, which in 2007 spent $11 billion to buy Hutch Essar, the Indian operator, is one of the network operators under pressure on the subcontinent, where a fierce mobile phone price war is under way.
India is the fastest-growing mobile market, adding about 15 million new connections a month, but call charges that were already the lowest in the world are being hammered down even further. Some operators are offering rates as low as 0.01 rupees a second — and the squeeze is telling.
Reliance, India’s second-largest mobile phone company, recently revealed a 50 per cent fall in quarterly profits from a year earlier. In the same period, average revenue per user sank 23 per cent, while at Bharti, India’s largest mobile phone company, it fell by more than 9 per cent. Many customers have taken to buying multiple Sim cards to take advantage of special offers, splitting their spending across several operators.
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Google’s mobile advances
Google bought AdMob, the leading mobile advertising provider, for $750 million (£448 million) yesterday in an attempt to extend its dominance of the internet advertising market into the mobile arena.
The all-share purchase marks a significant step by the internet search giant as it seeks to dominate the fast-growing smart-phone sector. Mobile users, thanks to the rise of smart phones that can browse the web, provide fertile ground for Google to generate new revenue.
AdMob is the world’s largest mobile advertising platform. It acts as a middleman, arranging with publishers and developers to put advertising spaces on websites and applications and then selling those spaces to advertisers, including brands such as Coca-Cola and Toshiba.
The company claims to serve more than 8.5 billion mobile banner and text adverts a month across a wide range of leading mobile websites and applications in more than 160 countries. (Mike Harvey)