Virgin Mobile & 3 to disappear

TWICE IN as many days, O2's outspoken chairman - Peter Erskine - has hinted that he expects consolidation in the UK cellular market. With 3 and Virgin Mobile most likely to disappear.

Erskine was speaking to journalists after O2 had unveiled a very upbeat set of figures. For example, over the last two years O2 has claimed over 40 per cent of all net additions.

If you add in Tesco Mobile's performance with over 4 per cent, that's nearly one in two of every new UK subscriber.

So where does that leave O2's rivals? Erskine described Virgin Mobile as "hardly a run-away successful mobile company", hinting that it had virtually stood still after its acquisition by NTL.

The implication is that the big players - including O2 and Vodafone - might swallow up their smaller rivals. Here [Hutchison] 3 can be viewed as a potential take-over target. Particularly if you want to acquire 3G users quickly.

Vodafone, for example, has 191.6 million customers but has sold only a mere 10.9 million 3G data cards and mobile phones across all its territories.

Erskine also hinted that he expects 02 to catch Vodafone up in the UK. He says O2 already has more customers - all he needs now is more revenue per customer.

Significantly O2 was strangely quiet about its i-mode service which was supposed to be the next Big Thing. Erskine pointed the finger at Nokia which has yet to provide a useful i-mode compatible phone. µ