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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