LONDON, Oct 9 (Reuters) - Mobile operator 3 UK has been buoyed by the number of users taking mobile broadband and Internet-based products, and believes the financial crisis will also enable it to attract customers looking for value.

Kevin Russell, chief executive of the Hutchison Whampoa <0013.HK>-owned network, told journalists the group was looking to mobile broadband and Internet-based mobile services to attract customers who want to access social network sites and instant messaging on the go.

3 UK, which launched in 2003 and competes against bigger rivals Vodafone, Orange, O2 and T-Mobile, also warned that the UK market was still a very difficult place for new entrants.

Russell urged regulators to address certain issues such as mobile termination rates, number portability and the auctions of spectrum.

'By June 2010, 3 will have a mobile broadband network that comprises 13,000 sites and 99 percent of the UK population covered,' he said.

'(The network) will give us a phenomenal opportunity to reposition our brand and take a real leadership position in data services. Our key focus over the next three, four, five years has to be to leverage that differentiation in data.'

Mobile operators are looking to expand data services such as sending photos to offset the fall in voice revenues.

Russell said more than 600,000 customers of 3 UK had mobile broadband kit that plugs into laptops and said the company had enjoyed its best month for selling the service in September.

'The next step we're focused on is Internet-based communication (for mobile phones),' he said. 'Services that are leading that charge are Facebook, Windows Live Messenger and Skype. We're seeing a real drive of customers starting to take their Internet behaviour from the home into mobile.'

Russell said that 30 percent of customers using mobile broadband were using it instead of a fixed-line service, and said he hoped to further target customers looking to cut costs.

'If you are trying to reposition a brand ... it is easier to do that in a time when people are more sensitised to ... saving value,' he said. 'So that is an opportunity for us.'

But Russell warned that Britain was still a very difficult market to break into and said so-called mobile termination rates set an 'artificial floor' to call prices.

Mobile termination rates are the fees mobile operators charge each other to access one another's network

Russell said a new entrant into a market place nearly always sends out more traffic than it gets in return, because a new entrant tends to price more aggressively than incumbent operators, meaning the customers will use their mobiles more than the existing operators.

'What it leads to, is that the new entrant ends up subsidising the incumbent operators,' he said. 'When I use the word subsidy I get slapped by the operators and (regulator) Ofcom but I don't know what other word to use.'

The European Commission has proposed cutting mobile termination rates by 70 percent.

(Editing by Paul Bolding) Keywords: TELECOMS 3UK/

tf.TFN-Europe_newsdesk@thomson.com

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