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3 calls in internet big guns for mobile credibility

Sell-off of loss-maker ruled out

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Hong Kong-owned mobile outfit 3 is having another crack at convincing everyone mobile internet will take off by abandoning the traditional operator pricing blueprint.

At a flashy launch in London today, 3 said it was marking a "historic day" for the mobile internet. Canning Fok, MD of parent company Hutchison, vowed 3 would press ahead with pioneering the web on mobiles, ruling out a sell-off. He told reporters: "The time for a flotation is past."

Without giving full details, 3 announced the first commodity-style pricing model for mobile data. There'll be no by-the-minute or by-the-byte billing, rather "it's free when you see it", meaning you pay for the pipe not the data. There will be fair use caveats though, including a higher access charge for high bandwidth video.

3 has a bunch of big internet hitters on board. Partner deals with Google, Microsoft, Yahoo!, eBay/Skype, and Orb have ensured their services are optimised for handset screens.

Plans to bring Skype to mobile were announced by 3 back in February at the 3GSM conference in Barcelona. On the surface offering an alternative to traditional voice calls is the bravest part of 3's new internet play.

Ovum principal analyst John Delaney said: "Everything about the internet that worries the mobile operators is here. Flat-rate data tariffs remove the link between service usage and end-user revenue. VoIP undermines mobile voice revenues. Instant messaging offers text messaging at a fraction of the price of SMS."

Elsewhere, Slingbox signed an exclusive deal to allow users to stream their TV direct to 3 mobiles. With mobile TV yet to prove its real world viability, this could be a canny tie-up from 3 and Slingbox. 3 gets to allay the costs of investing in further infrastructure and its customers get the wider choice of channels available to them at home, if they own a Slingbox.

The push will be branded "X-series" and will kick off with a handset a piece from Nokia and Sony Ericsson, which will be in the shops in time for Christmas in the UK and in Q1 2007 in 3's other territories.

The cash Hutchison is hurling at mobile broadband so early in the game is typical of its swashbuckling history of investment in the mobile industry. It's a dead cert the burden of risk is being shouldered by 3 rather than its big name partners. If anyone was going to properly break the ice on mobile broadband it had to be 3 with its big money backing. Global omnicorp Hutchison coined $31bn in 2005 revenues from everything from Canadian oil to Hong Kong hotels.

Of course, its not the first time 3 has told us it's revolutionising mobile internet. Today Fok was candid about failures in services, handsets and pricing.

And this time round it's going to be great. Honest. ®

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