3G datacards slot into laptops to provide Internet connectivity when on the move. They make good use of the current patchy 3G networks: demand is likely to be concentrated in areas that are currently covered, while GPRS is a good back-up outside these areas and the ‘bursty’ nature of their usage does not put an unsustainable load on the 3G networks. However, they are far more expensive and much slower than fixed line broadband, and they are likely to remain so for the foreseeable future, leaving their appeal as a ‘last resort’ rather than a genuine alternative.

The resulting outlook for C&W UK’s performance in the short term is uncomfortable

Longer term, the strategy looks feasible, but better implemented under private ownership

Bulldog’s strategy is unchanged and remains dubious

Mobile TV is being hailed as the next killer consumer mobile data application, and is already credited with being the most popular 3G service where it is offered.

This report examines recent developments in Local Loop Unbundling (LLU) in the UK and their implications for market structure and BT’s revenue from residential customers.

In January this year, Ofcom published its eagerly-awaited consultation document, “Spectrum Framework Review: Implementation Plan”, containing its plans for the release of new mobile spectrum and the liberalisation of existing mobile spectrum. This report reviews the implications of Ofcom's hesitant moves towards spectrum liberalisation and the vast amount of new mobile spectrum that will be released onto the market.

We find that the hype is overblown, with low underlying consumer interest and the potential for a mass market service still several years away due to 3G actually being an inappropriate delivery mechanism.

Handset manufacturers are likely to be the only significant winners from mobile TV, able to keep top-end handset prices high with yet another seldom-used feature.

In this note we summarise the available evidence on trends in ARPU among European mobile operators. We demonstrate the increasing trend towards stable or increasing revenue per subscriber in key markets. The end to the long downward trend in voice ARPU is clearly in sight. This new stability is derived from increasingly firm call charges and slow growth in minutes of use. Local competitive conditions may disrupt this pattern in individual countries – and we demonstrate the countervailing trend in Finland – but, overall, the pattern is clear and will probably become more so in the next few months.

More important, perhaps, the current economics look acceptable both for BT's Wholesale and Openworld divisions - this note includes some detailed financial analysis. But even at the lower price levels, we remain unconvinced whether subscriber numbers will grow as rapidly as BT predicts. (BT is now saying that ADSL subscribers will be more numerous in 2005 than unmetered customers are today!)

Nokia's recent guidance suggested a modest recovery in handset sales in 2002, followed by a strong resurgence thereafter. We think the position will be different and look for unit sales of about 450m next year, with only 3-7% growth in the years 2003-2005.

In this short note, we look at trends in mobile design and features. We show that the steady decline in size and weight is now over, and manufacturers are focusing on adding new functions, such as digital cameras, and even, in one case, a thermometer.

In this issue, Toby looks at recent evidence on UK multichannel viewing, particularly in the period immediately prior to the start of the new BARB audience panel.

Mobile operators’ marketing strategies are the primary determinant of the size of the market for handsets. The level of handset subsidy dramatically affects retailer sales. In this brief note, we look at the changes in retail subsidies in the UK during the past 6 months. We show how the emphasis on the acquisition of contract customers has meant higher levels of subsidy for the phones taken by these customers. By contrast, pre-pay subsidies have fallen.

Since the research for our report on Vodafone was carried out, the UK mobile operators have made a number of changes in tariffs. We think the net impact of these changes has been to increase average call charges. This may be the first time that the UK has seen any upward trend in prices. If these price changes stick, the impact on voice ARPU is clearly positive.

Looking ahead, the costs of buying a PC and funding a connection will act as barriers to Internet expansion. Such expenditures weigh more heavily on households in less prosperous households, where the Internet have-nots are concentrated. Although the Internet-enabled mobile phone and digital TV subscription would eliminate PC ownership as a barrier to Internet access, we do not think these will be (for the foreseeable future) access platforms of more than marginal significance.

Nokia's quarterly results statement included an estimate for worldwide global handset shipments of about 390 million. Global shipments so far this year have been:

Europolitan, Vodafone's Swedish affiliate, has just announced that its expected costs to build a 3G network will be 10bn Swedish Kroner, or about 1bn Euros.

How will this happen? XP contains hooks that link it closely to Microsoft Passport and Microsoft Messenger. These two applications are the gateway into .NET. Passport provides the central storage for user details (no more tedious entry of personal data into web forms), Messenger offers a broad set of 'unified messaging' functions. One example struck as particularly powerful; XP users can automatically see which of their list of 'buddies' is online and can contact them via instant messaging. If this isn't a direct threat to AOL, we don't know what is. (These functions have been separately available for some time, but making them an integral part of the operating system will hugely expand their use).