International performance was hit by problems in Jamaica and was weak generally except for Panama and Macau

Further consolidation could lie ahead for the UK commercial radio sector. EMAP is expected to offer its radio assets for sale and Scottish Media Group plans to divest Virgin Radio. The battleground is competition for listeners drawn by the BBC's increasingly popular national radio networks. This report however examines past consolidation, which produced substantial cost savings, without noticeably improving the commercial sector's fortunes. In our view, for consolidation to succeed in this regard, much greater attention will need to be paid to improving content

The performance of the international business remains solid

French altnet Neuf Cegetel is buying Club Internet from Deutsche Telekom for an estimated €500 million and will overtake its rival Free as the #2 on the DSL market, still way behind Orange

The new consumer data tariffs from Vodafone and Orange in the UK continue the trend towards dramatically lower data prices for high end users, although they are cunningly structured to involve more moderate increases for low end users

Scottish Media Group’s decision to sell its Virgin Radio business has been prompted by the need to pay down group debt and the management’s decision to refocus on the turnaround of its ITV service. This report outlines our views on the management pronouncements made on the success and performance of Virgin Radio and, therefore, its value to investors. We consider that management has exaggerated the potential value of this asset to investors

Vodafone and Orange are planning to share their 3G networks in the UK, and are looking at potentially sharing their 2G networks in due course

On Wednesday Orange announced a simple new single tariff range for all its new contract users. Although there are some benefits to both consumers and Orange of tariff simplification, the main impact appears to be to increase the price of calls for off-peak users, which is a sensible strategy for Orange and consistent with other tariff increases we have seen recently. Orange may lose customers because of this, but it has helpfully given four weeks warning of the change to the other operators, who may react with changes of their own.

Weak economic growth is usually blamed, but we believe that other forms of communication are substituting for fixed voice calls. Substitution of fixed line calls by calls from mobile phones is increasingly less important. By contrast, our conclusion is that Internet-based communication (email and instant messaging) has recently become a far more important source of competition to fixed line voice calls.