Chief of the UK's fastest growing mobile group has the Republic in his sights, writes Jamie Smyth
Appointed chief executive of Britain's fifth mobile phone network, 3 UK, in the midst of a post-launch crisis in June 2003, few observers gave Bob Fuller, the ex-professional footballer-turned-accountant, much of a chance to turn the business around. A slew of technical hitches, customer service problems and massive financial losses dogged the 3 UK's early days, prompting a battery of negative headlines for most of 2003/4.
Two years on, and 3 UK is currently the fastest growing mobile operator in Britain, attracting three million subscribers and planning to break even before interest, tax, amortisation and depreciation in the second half of this year. Fuller has now targeted a stock market flotation for 3 UK next year, and at least some of the sceptics have gone quiet.
"Our early problems were caused by a shortage of new handsets for our service, which was the same for our Italian division," says Fuller, a no-nonsense Geordie, who started his business career as an accountant working in the coal and gas industries. "But we've never had any problem with demand for our service."
The 3 group is the brainchild of Li Ka-Shing, chairman of the hugely successful Hong Kong-based conglomerate, Hutchison Whampoa, and initial backer of the mobile operator Orange.
Using a new type of mobile technology called third generation (3G), 3 offers low-cost voice, video and multimedia services to consumers in Britain, Italy, Australia, Austria, Sweden, Denmark, Hong Kong and Israel.
It will launch its services in the Republic next month, providing the first new competition in the Irish mobile market since the launch of the third network, Meteor, in early 2001.
"The Irish market is a very interesting one for us. It is well penetrated and clearly, people like to talk and use their mobiles phones," says Fuller.
"It is a big opportunity for us to bring some competition to the Irish market, where it has been well-documented that customers haven't properly benefited from this yet.
"The other operators have had a cosy duopoly up until now. For example, everything I've read about the Irish market is about overcharging.
"We plan to shake up the market in our first year of entry and bring value for consumers."
Following his appointment to the top job at 3 UK, Fuller pioneered a strategy of discounting the cost of voice calls for heavy users of mobile services rather than simply pushing the firm's new advanced multimedia services.
Successive surveys published by the communications regulator ComReg have shown that this segment of the market - "heavy users" - are offered the least competitive tariffs by existing operators.
So will 3 follow a similar strategy in the Republic, offering some respite to consumers and business users of mobile services?
"We have followed a strategy of providing value for money in all the markets that we offer services," says Fuller, who refuses to elaborate on the firm's tariff plans until launch day for fear that Vodafone, O2 and Meteor will try to emulate its strategy.
This type of commercial sensitivity abounds in an industry which generates billions of euro in revenue every year.
Fuller confirms that 3 has spent more than €103 million on its network building programme and a further €13 million on its licence so far, but will give no details of the future investment needed to crack the Irish market.
However, most analysts believe the same amount of investment will be needed over the next few years if 3 aggressively pursues customers in the Republic through heavily subsidised handsets and high-profile advertising campaigns.
Luckily, Fuller can call on the deep pockets of Hutchison Whampoa and its chairman to support the firm's endeavours.
It is estimated that the Hong Kong-based firm has already ploughed more than £13 billion (€19.3 billion) of investment into its global gamble on 3G technology, and much more investment will be needed before the group can stand on its own two feet and begin repaying the massive investment.
The sheer scale of the investment is causing some analysts to question if Li Ka-Shing, who controls a range of businesses, from sports to energy, has lost his Midas touch for backing winners - and the stronger performance of 3 UK and 3 Italy has not convinced some of the critics. But Fuller concedes no doubts.
"He [ Li Ka-Shing] is incredibly sharp-minded and knows what his businesses are doing from day-to-day.
"He has an incredibly detailed knowledge of how his businesses are performing and is very supportive of local management," says Fuller, who has worked for a succession of Hutchison Whampoa firms for over 20 years.
"The culture of Hutchison Whampoa is very different to the corporate style back in the UK.
"There is a very small and accessible head office in Hong Kong, and this divests a lot of responsibility to the managing directors of different divisions.
"It is quite patriarchal and retains a more personal approach to business," says Fuller, who attends the annual family day held by the company in Hong Kong every year, which hosts up to 10,000 people working for the company's many different divisions.
Fuller first moved to Hong Kong to work in the 1980s after a spell as a professional footballer for Newcastle United and having subsequently trained as an accountant.
After spells with different Whampoa units, he was appointed a senior director with the highly successful Orange mobile phone company under the leadership of Hans Snook, who famously said that his only complaint about Fuller was that he "rarely smiled".
Several years on, Fuller seems content in his role as chief executive of 3 UK, and even finds the time to maintain his passion for football and is still a season ticket holder at Newcastle United.
"There are quite a lot of crossovers between the worlds of football and business, such as teamwork, training and hard work," says Fuller, who left the game after spells with Newcastle's reserves when he was 24.
Ironically, it was 3's launch of video clips of Premiership soccer which generated much of the early buzz around 3G technology when it was first launched in March 2003. This service will be made available to Irish subscribers to 3's service as well as its other popular services such as video jukebox, which enables users to download music videos, and video calling.
"People like to generate their own 3G content on their handsets as well, for example by making and sending their own videos," says Fuller, who demonstrates several new 3G handsets throughout the interview.
3G handsets have improved dramatically since 3 first launched in March 2003, when they resembled the old brick-like phones of the early 1990s. The new generation of handsets have impressive large-colour screens, while remaining compact enough to fit in a jacket pocket. They are likely to prove popular among the 16 to 34-year-old target youth audience for 3 in the Republic.
But unlike Britain, where 3 UK enjoyed more than a year's headstart on its rivals, Vodafone has already launched its own 3G service, Vodafone Live, in the Republic and O2 is due to follow later this year.
However, Fuller snorts with contempt at the contention that Vodafone's 3G offering is comparable to 3's service.
"We have been at the forefront of 3G development worldwide and we are the 3G market in Europe," he says.
"I genuinely believe that we will be at least a year ahead of the competition for at least two to three years."
Irish consumers will get their first look at 3's multimedia services and new voice tariffs later this month. Punters will hope that 3 can deliver on its promise to provide real competition.
Factfile
Name: Bob Fuller.
Title: Chief executive, 3 UK.
Age: 57.
Education: Gateshead secondary technical.
Background: He played as a professional footballer for Newcastle United and then trained as accountant. Fuller worked in the coal and gas industry in the UK, before moving to Hong Kong to work for Hutchison Whampoa.
Family: Married with four children.
Hobbies & Interests: Soccer, golf, walking.
Why he is in the news: Fuller is overseeing the launch of 3 in the Republic next month.
