H3G and O2 are planning for their UK merger to create a mobile-only operator that leads the market in network quality and capacity, taking a contrary approach to the current trend of fixed/mobile convergent strategies

The merger would ease the severe spectral capacity constraints currently faced by both operators, and ease the scale disadvantage suffered by H3G ever since its launch in 2003, allowing a much stronger long term competitor

Post-merger, the UK mobile market will likely end up just as competitive as it is now, with pricing pressure actually more likely to continue into the medium term, and plenty of opportunities and threats for all the main players as the environment re-aligns

On 21st August Hutchison Whampoa reported on the progress of its 3G investments as part of its interim report. This brief note examines this progress compared to our expectations, and reassesses the threat to the GSM operators.

On June 9th '3' launched 2 new tariffs aggressively targeting the core of the GSM contract base. In this report we look at the potential impact of these on both H3G and the UK GSM operators.

Perhaps inevitably, ‘3’ opened for business before it was really ready. As a result, its services are patchy and unreliable. Some of these problems will be overcome in the next few weeks. Others will be more intractable. Overall, we can see some potential in 3G style services, but ‘3’ is far from being a competitor to existing 2G offerings.

With the handsets finally available and (to some extent) working, Hutchison 3G's '3' operation has finally launched in the UK. In this report we review the commercial prospects for '3' in particular and 3G in general.