Mobile Operator Three UK Preparing to Enter the Business Market

Reports indicate that consumer focused mobile operator Three UK (CK Hutchison) are going through an upgrade of their national network, which aside from laying the ground work for a future 5G service will also pave the way for a move into business connectivity (beyond existing small business tariffs).

The operator had originally hoped to enter the business mobile market by merging with O2 (Telefonica UK) but unfortunately that approach was scuppered by Ofcom and the European Commission in 2016 (here). Since then Three UK has moved to increase their spectrum holdings by gobbling UK Broadband Ltd. (Relish Wireless) for £250m (here) and splashing £164.4m on a small 20MHz slice of the 3.4GHz spectrum band in the recent auction (here).

Overall this leaves Three UK looking weak in terms of their existing 4G focused mobile spectrum holdings, which is a problem for an operator that has a strong focus on UK data (Mobile Broadband) connectivity. On the other hand they now have access to a total of about 144MHz (frequency) across several 5G friendly bands, which puts them in quite a strong position for when the main commercial rollout begins in 2020.

According to today’s FT (paywall), the operator is now predictably preparing to enter the UK business market by starting from scratch (they’ve already done this Ireland and Austria through acquisitions). Apparently Three UK will look to begin its big push in 2019, once the current network upgrades have been completed. The aim will be for this to help double their revenue (£2.4bn in 2017) and cash flow over time.

Estimates suggest that operators’ like Vodafone, O2 and EE (BT) each generate around £1.1bn to £1.3bn a year from the UK business mobile market.