Mobile giant Three to block online advertising

Mobile giant Three to block online advertising
Exclusive: Publishers' mobile growth threatened as operator signs deal with controversial Israeli tech developer Shine
Shine claims its technology will make the mobile internet better for consumers

By Christopher Williams 8:00PM GMT 18 Feb 2016

Three is poised to become the first major European mobile operator to block online advertising on its network, signalling a clash with digital publishers and advertising companies.

It is understood that Three, which runs operators in half a dozen European countries including the UK, will next week announce a deal with Shine, a controversial Israeli technology company that specialises in blocking mobile advertising.

They offer to lift their toll gates for those wealthy enough to pay them off, or who submit to their demands that they constrict their freedom of speech to fit the shackles of their revenue schemes.

Shine’s investors include Li Ka-shing, the Hong Kong billionaire behind CK Hutchison, the owner of Three.

The partnership will be unveiled on Tuesday at Mobile World Congress, the industry’s annual jamboree in Barcelona, according to sources. Three’s operations in Italy and the UK are closest to implementing Shine’s technology, which can block online advertising on mobile web pages and within publishers’ mobile apps.

It is understood that Three UK will announce that it will begin trials of the system with a small group of customers over the next few months to develop designs for a roll-out across its network.

Sources familiar with Three’s plans said it would finalise how it will offer Shine’s technology to customers later this year.

Confirmation that a major European mobile operator is prepared to block online advertising will nevertheless cause serious unease among digital publishers, who rely on mobile advertising for a small but growing share of their revenues. They will fear significant loss of income if Three’s nine million UK customers do not see advertising alongside their content.

They will also fear that Three could pursue a similar model to Digicel, the Caribbean operator controlled by the Irish billionaire Denis O’Brien, which last year became the first to implement Shine’s technology. The operator has blocked almost all mobile advertising and demanded that publishers and web giants such as Google and Facebook share their revenue with it.

The controversial move has attracted the attention of regulators, who have claimed Digicel may amount to an unlawful interception of communications and violation of ‘net neutrality’ principles, whereby all data is treated the same. Shine, which argues its technology empowers consumers, has also become a target for the online advertising industry.

Randall Rothenberg, the chief executive of the Internet Advertising Bureau, a trade body, last month labelled the Israeli company and others like it “profiteers” who “offer to lift their toll gates for those wealthy enough to pay them off”.

It is understood that Shine has suggested that Three follow the Digicel model, although the European operator has not decided the details of how it will use the technology. It could target only the most disruptive or data-hungry types of advertising, such as videos that play automatically. But it is understood Three believes advertisers should pay for the data consumed by their messages.

The operator’s announcement will be seen as a watershed in the mobile industry. Executives have long been envious of the profits made by Google and Facebook via their networks, and irritated by the sometimes disruptive character of mobile advertising.

Olaf Swantee, the departing chief executive of BT’s mobile operation EE, told The Telegraph last year that he was considering how to clamp down on the most “intrusive or crass” mobile advertising. O2, which Three UK is attempting to acquire for £10.25bn, has also said it is looking at restrictions.

Three declined to comment. In an invitation to a press conference next week it said it was “committing to give consumers more control over content on their devices”.


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