Mobile operator 3 Sweden said it is simplifying its approach to enterprise customers by offering just one corporate mobile plan, called 3Foretag, which provides unlimited internet use within Sweden at a lower price. This is the first major change made by new CEO Haval van Drumpt, who started in the position three months ago. Van Drumpt said that the Swedish corporate market is characterized by a flurry of different services that are difficult to compare; 3 Sweden’s initiative is intended to counteract that. The new, unified subscription provides unlimited data, voice calls, SMS and MMS at a price that is around half the least expensive comparable subscription on the market.
The operator cited a survey it carried out among 100 SMEs in conjunction with opinion polling company YouGov, which found that 6 out of 10 respondents said it was either difficult or very difficult to choose among the many mobile subscriptions available. Nine out of 10 respondents said they would not pay more than SEK 399.00 (US $41.67) per month, said 3 Sweden, while the sector average is approximately SEK 599.00 (US $62.56) for a service with unlimited internet.
The new tariff, 3Foretag, costs SEK 249.00 (US $26.00) a month. Customers who sign up for 24 months will have the roaming service 3Varlden Foretag included. It lets customers use the internet in 80 countries worldwide at the same price as they would in Sweden, up to a maximum of 100 GB.
3 Sweden offers other services on top of this basic subscription, namely data SIMs at SEK 49.00 (US $5.12) per month, switchboard services for SEK 69.00 (US $7.21) per month, 3Extrasurf and 3Surfpass.
In a world of seemingly exponentially increasing choice, offering only one option is a radical move. With customers expecting customization more than ever, it certainly is counterintuitive to hark back over a century to Henry Ford’s principle that his customers could have their Model T cars painted any color they wanted, as long as it was black. In the case of 3 Sweden, though, there are valid reasons to believe that such an approach could work.
The operator’s new CEO is proposing a come-from-behind move given that its current market share is only 6 percent. Boldness often pays off in such circumstances. The Swedish mobile market for business plans is currently clogged with a disconcerting number of competing offers and choices within plan suites, and according to 3 Sweden’s research, executives at SMEs are confused and overwhelmed.
Of course, the new 3Foretag plan is not exactly the mobile telephony equivalent of “black.” The operator’s simplification is upward, not downward—subscribers get unlimited services and roaming, and at a very low price. This is a highly competitive, indeed disruptive move that could garner 3 Sweden a significant number of new subscribers. The question is, is it sustainable?
If it is not actually sustainable long term, the operator could raise prices after a while, or place limits on the service allowances. That might have the effect of alienating customers, though. A better idea would be to try and recoup profits from offering extra solutions for SMEs, innovative products outside of basic services, which could be added on to the plan at extra cost. Clearly 3 Sweden is already thinking in this direction, since it is offering switchboard services and data SIMs. Going further in this direction could be the way to be able to maintain 3Foretag’s viability and gain steadily in market share among business customers.