Industry Analysis Case Study

3 UK’s Profitability and Regulation Concerns: Can its CEO, Kevin Russell Pull it off?

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Abstract:

3G UK Limited (3 UK), a group company of global conglomerate Hutchison Whampoa Limited, forayed into UK mobile telecom market in 2003 - by rolling out first 3G services there. However, it couldn't make profits – in spite of having no competition in 3G services. Later, Ofcom, UK's telecom regulatory authority, ordered to cut termination charges by 45%. But 3 UK was till then a net payer of termination charges. This order, company sources fear, would further worsen the bottom-line and so they are appealing against the order. Kevin Russell, appointed as the new CEO in early 2007, has his hands full – in steering the company through its regulatory battles and staying closer to its advantages. Can he pull it off or would his plans misfire?

Debates can rage whether 3 UK can grow on its first mover advantage as the first 3G operator, or will it languish as a late entrant into the market dominated by 2G operators. Even the role of regulations in the company's profitability can be discussed

Pedagogical Objectives:

• To discuss the critical success factors in the telecom industry
• To analyse UK telecom industry's competitive dynamics
• To understand first-mover and late-mover advantages and disadvantages in the telecom sector.

Keywords : hird generation mobile companies; 3 G cellular communications; 3G communications in UK; Hutchison Whampoa Limited; 3 UK; Managing in Troubled Times Case Study; Cellular operators in UK; Mobile communications in UK; Regulatory authorities in UK telecom; Structure of the UK telecom industry; Evolution of UK's telecom industry; Privatisation of British Telecom