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February 19, 2016updated 31 Aug 2016 5:10pm

Will telcos follow Three in taking a Shine to mobile ad-blockers?

News: Blocking ads at the network level could take off as a new revenue streams for the telecoms industry.

By Alexander Sword

Three is implementing new technology to tackle mobile advertising at the network level in a move that could have significant impacts on the industry.

Working with Shine Technologies, the mobile operator has built network-based ad-blocking into its networks in the UK and Italy.

Three has set three guiding goals for its ad-blocking. The first is that the costs of advertising should be borne by the advertiser and that consumers should not pay data charges to view them.

The operator also said that customer privacy and security must be protected and that customers should be entitled to receive advertising that they find relevant and interesting.

Crucially, Three said that it does not aim to eliminate mobile advertising altogether, but to empower the customers with more choice over the advertising that they receive.

As with most things mobile, the emphasis is on user experience, with Three pledging to protect the right of consumers "not to have their data experience in mobile degraded by excessive, intrusive, unwanted or irrelevant adverts."

It is unclear what approach Three will take, as full details are set to emerge in the near future following discussions with Shine and the advertising community.

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Stephanie Baghdassarian, Research Director at Gartner, notes that Three will not necessarily be blocking the adverts themselves, but may simply enable customers "so they can decide to block or not to block ads and most probably to set up what they want to block or let go through."

Digicel, the first major customer of Shine to be announced back in September, applied the ad-blocker universally by default to its 13.6 million subscribers. This blocks display and video ads in both the mobile browser and within apps.

The involvement of major telcos in ad-blocking is a novel approach to ad-blocking, which has until recently seen little official sponsorship. Apple added support for third-party ad-blockers in Safari, while Samsung has done the same in an update to the default browsers on its devices.

From the perspective of device vendors, it seems a no-brainer. The actual advertising revenue derived available to device vendors is fairly limited, and since most ad-blockers only affect mobile browsers, they can still advertise within applications.

However, Baghdassarian says that Three could achieve a "double win-win" if it turns advertising into a new revenue source.

"They limit the unwanted ads – the user is happier and gets a better data access experience. [Secondly], they find a new revenue stream from the advertisers."

Digicel, for its part, called on big media companies to enter into a revenue-sharing deal.

Baghdassarian added that "it could very well be that other CSPs go the same route, especially if it turns out the user experience is so much better that it becomes too differentiating for Three and help them gain new customers."


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