3Group, a subsidiary of Hong Kong's Hutchison Whampoa, Thursday introduced a set of Internet broadband services and applications, dubbed X-Series, for the company's mobile broadband network. 

The services and applications include unlimited calls from mobile phones using Skype, access to home TV service via Sling Media’s Slingbox, access to the home PC via Orb, and messaging services from Yahoo, Windows Live Messenger, and Google.

“Our networks were designed for mobile broadband, and entrapping people and charging them for things that are free on the Internet is not the way we intend to go,” said Frank Sixt, executive director and group finance director of Hutchison Whampoa. “What’s free when you use it on the Internet ought in principle to be free when you use it on your mobile phone.”

X-Series Cannibal

The X-Series, which will be available in the United Kingdom starting in December 2006 and in 3’s other markets around the world in early 2007, seems to eat into a number of 3’s current revenue sources.

For instance free Skype calls to other Skype users from 3’s mobile phones will certainly take a bite out of revenue. Instant messaging undermines SMS (short message service) revenues, and flat-rate data access charges undermine the very lucrative time-based revenue source.

“Mobile operators in Western Europe have mostly been trying to avoid having their data business follow the Internet business model,” said John Delaney, principal analyst with Ovum.

“By that, we mean free services, no usage-related charges, no automatic visibility of the access-provider brand,” he added. “3 now seems to be embracing the Internet model—at least, to the extent that today’s technology can support it.”

3 trotted out nine partners at a press conference in London, all representing at least one major Internet application or mobile device. Executives from Skype, Sling Media, Yahoo, Nokia, Google, eBay, Microsoft, Orb, and Sony Ericsson all addressed the emergence of Internet broadband on mobile devices.

Sling Media on the Inside

Perhaps the most interesting of the applications is Sling Media’s Slingbox, which allows 3’s customers to access programs on their home TVs from their mobile devices.

The deal marks the first time Sling Media has been an invited guest of a major mobile carrier. The company’s game-changing technology allows users to employ their broadband connection for TV away from home (see Speedy Slingboxes Debut).

Access to TV programs via mobile phones is an application that many mobile carriers would perhaps prefer to launch themselves, but 3 has now strayed from the herd.

“Embracing the Internet model is risky,” said Mr. Delaney. “In the worst case, 3 could end up having its role reduced simply to providing Internet access.”

But the company is smaller than many of its competitors so it risks less, according to Mr. Delaney.

“3’s best hope of outflanking the competition has always been to embrace disruption,” he said. “That seems to be the path it has chosen to take here.”