Mobile operator Three aiming to conquer the home

THE mobile operator Three has begun a bid to use its dominance of the 5G airwaves to attack traditional broadband providers such as BT and Sky.

Three, owned by the Hong Kong conglomerate CK Hutchison, is from today appealing to consumers to ditch their fixed line in favour of a single 5G bill of £35 per month, covering connectivity at home and on the move.

The plans are built on the operator’s strength in 5G radio spectrum. Following a 2017 deal between CK Hutchison, which is controlled by the billionaire Li Ka-shing and his eldest son Victor, and UK Broadband, a heavily loss-making wireless internet venture controlled by younger sibling Richard, Three has a greater share of the airwaves than all its rivals.

The £250m takeover of UK Broadband, which under the Relish brand failed to make inroads into the home broadband market with 4G technology, means that Three can now offer faster 5G services and more capacity than its traditionally bigger competition.

The operator has been seeking to expand its customer base in an attempt to make better returns on the billions it has invested as a latecomer to Britain’s mobile market.

The Li family, who also control UK electricity infrastructure and ports, as well as the retailer Superdrug, were angered when Three’s bid to merge with rival O2 was blocked in 2017. An aggressive move into the domestic broadband market via low prices, unlimited data allowances and a “plug and play” router that converts a 5G into a Wi-fi signal, is viewed by executives as an alternative, if more speculative, way to attract more customers and enjoy the economies of scale.

Such “fixed wireless” services are commercially unproven and technically untested in a market with Britain’s topology and thick-walled housing, which may limit speeds and coverage. Even radiators under windows could prove an obstacle to 5G signals.

However BT is expected to introduce its own 5G “fixed wireless” services later this year.

If successful, they could bring better broadband to millions at a significantly lower cost than replacing its copper telephone lines with “full-fibre” networks.

Three’s 5G network is due to cover 25 cities by the end of the year. Rural areas, where customer densities and returns are lower, are being treated as a lower priority.

Rivals, including the network O2, have warned the industry regulator Ofcom that Three’s current dominance of the relevant airwaves poses a threat to forthcoming auctions.

They have claimed that the industry’s smallest player could seek to delay and disrupt sales to maintain its advantage.