Mobile operator 3 UK committed to spending £2 billion to develop and launch 5G services, a sum CEO Dave Dyson (pictured) said would give it a platform to better challenge in the market, though he warned the investment would stagnate profit growth in the short term.
Speaking at the company’s 5G and network transformation event in London, Dyson said parent company CK Hutchison had taken a “long term view” and talked-up the operator’s ability to become more competitive as a result of its investment in network transformation and 5G.
“It’s a tough decision to make for the shareholder,” Dyson said, adding it would cause “short term pressure” but offered long term growth by becoming “even more competitive and stronger in the market.”
3 UK is the fourth-largest operator in the country. Dyson estimated the business at half the size of Vodafone UK, and a third of the size of Telefonica brand O2 and BT’s EE.
It is also the newest player in the market and has been at the forefront of launching a number of new tariffs and services since opening for business in 2003, though the adoption of new technologies came with some teething problems around service availability.
Although its customers have been happy with the service received for some time and it performs well in independent tests, Dyson said the perception from some non-customers is that its network was still lagging. This, he said, would be addressed by its new strategy and network rollout.
Among the company’s corporate goals are attracting high-worth millennials, a switch to a “service-led” model and to increase the scale of the company.
“For us to be in a more sustainable position, we need to double the size of the business,” he noted.
As part of its investment and previously announced transformation strategy, the company has already made a number of changes covering network technology and back office services.
Among the headline spends so far are £151 million on spectrum in the UK’s 5G auction and acquiring small fixed-line service provider UK Broadband for £250 million in February, a deal Dyson said was mainly to add to its spectrum portfolio.
However, the buy also gives the company a step-up to launching fixed wireless access 5G services through UK Broadband’s Relish brand, which only operates in a small part of the UK.
The operator also invested in Project Montana, a joint venture with O2 UK and energy company SSE to install fibre backhaul in the UK’s sewerage system. It has also invested in new cloud core network infrastructure from Nokia, forged deals with Huawei related directly to its 5G network and increased its data centre footprint.