3 slashes prices in desperate drive for sales

The mobile phone operator 3 slashed the prices of its third generation mobile phone service yesterday in a desperate bid to kick-start sales in the UK.

The mobile phone operator 3 slashed the prices of its third generation mobile phone service yesterday in a desperate bid to kick-start sales in the UK.

The company, which is controlled by Hong Kong's Hutchison Whampoa, is launching two new pricing plans on Monday which, it says, could undercut rivals by 50 per cent.

Shares in mm0 ₂ closed down 3 per cent at 62.5p while Vodafone finished 1.7 per cent lower at 129.75p and Orange was 25p worse at 537.5p.

Two new packages, VideoTalk 500 and VideoTalk 750, give customers 500 and 750 voice minutes to any network at any time for £25 and £35 a month respectively. The move is designed to reignite interest in 3's offering - the UK's first commercial 3G service, enabling customers to make video calls and to watch video clips.

"For customers on plans with comparable amounts of voice calls on other networks, 3 is offering savings of as much as 50 per cent on the monthly charge," it said.

With the first package, customers also get a £10 a month allowance for making video calls, sending video messages and downloading video clips for the first three months. The allowance is £20 a month on the second package.

Bob Fuller, who was recently parachuted in as chief executive from the firm's better-performing Italian operation, said: "By any measure VideoTalk 500 and VideoTalk 750 offer unbelievable value to mobile customers in the UK. With these two packages our customers can make up to 50 per cent savings on comparable bundles from other networks."

The price cut comes just a week after 3 completed a management reshuffle that saw former boss Colin Tucker and Lisa Gernon, 3's strategy and marketing director, sidelined.

The pair oversaw the launch of the service, which has since been dogged by technical problems with users also complaining about clunky handsets and poor battery life.

Having attracted just 25,000 users in the UK so far, it seems unlikely the business will get close to its target of having 1 million customers in the UK by the end of the year.

Last week, 3 announced the appointment of a chief operating officer, Gareth Jones, to look after its sales and marketing push in the UK. Mr Jones, who spent eight years working for the mobile phone operator Orange, is taking on much of Ms Gernon's role. Mr Tucker, meanwhile, was pushed aside a fortnight before to make way for Mr Fuller.

Mr Jones said: "We are offering incredible services, at incredible value for money and we now have something to appeal to every customer."