The total of US$11.3 billion compares with US$8.1 billion in 1Q06. The figure means that nearly one third of mobile data revenues now come from non-SMS services suggesting operators investments in advanced technologies are finally reaping rewards.

But this does not mean the end of the road for SMS. Worldwide SMS traffic was up year-on-year by around 50% to more than 620 billion messages in 1Q07 according WCDM.

SMS revenues were up 23% over the same period helping total data revenues to reach US$34.3 billion in the quarter the highest ever.

The higher increase in SMS traffic compared to revenue reflects lower SMS tariffs and the greater availability of bundled packages.

Sir Richard Bransons Virgin Group which owns 10.5 per cent of Virgin Medias shares is understood to be supportive of the sale.

Buyout firms Apax Blackstone Cinven and Providence have been said to be considering joining forces to put forward a rival offer. Apax has also been rumoured to be joining Carlyle in its bid. Cable firm ComCast and satellite TV company DirecTV are also eyeing Virgin Media.

Network operators are not expected to bid for Virgin Media because it is a cable operator and not an ADSL operator said analysts.

Virgin Medias share price rose by more than 14 per cent on news of Carlyles interest. However Virgin Media is reported to have lost nearly 47000 subscribers in the first three months of 2007 and before the Carlyle approach its share price had slumped by 15 per cent this year.

Virgin Media has initiated a review with Goldman Sachs of strategic alternatives which include its sale. However it said in a statement last week that a sale was not guaranteed.

Nevertheless Global Insight telecoms analyst Emeka Obiodu said Carlyles proposal looked to be the likely winner. Obiodu said: Virgin Media has been approached for sale before but on this occasion they have appointed a financial adviser which means they themselves are willing to sell.

The fact they are using other parties to oversee this suggests that they might not be confident in Carlyle or they might be looking to raise the price.

Speculation mounted last week that Carlyle will drop the Virgin brand should the sale go through.

Obiodu said: The Virgin Mobile name is an asset compared with the liability of [previous buyer] NTL.

Carlyle would be foolhardy to change Virgin Medias name based on the amount of money it would cost to rebrand.

Virgin Media remained tight lipped except to say it had received a proposal subject to due diligence and a period of exclusivity for the acquisition of the entire company but had not yet entered into negotiations with potential buyers.

The company has not engaged in negotiations with the offeror it said in a statement. A spokesperson added that the process could take up to two months.

This was dismissed as market talk however. There would be negotiations behind the scenes. An agreement just doesnt fall from the sky said Obiodu.

The program called mobileAct unsigned will air on both T4 and 4music. The show also promises gigs a tour TV exposure and a major record deal to the cream of Britains untapped music talent in its search for the countrys best unsigned act. The show is set to air next autumn.

The search will be led by a panel of well-known artists and industry experts. It is open to musicians from all genres who write and perform their own original music.

Viewers the acts and the music industry will be able to interact via mobile WAP and online. Initial auditions for the 12-week series will take place via the mobileAct website where unsigned bands can submit their own tracks and videos before the best 50 are invited to participate in filmed auditions. All entries must by in by August 5.

From September customers who pre-register for a two-year broadband contract with AOL costing £19.99 a month will receive a Dell laptop worth £500. The laptop features an 80GB hard drive 1GB RAM and 15.4inch wide screen.

The move comes a day after Orange Broadband announced that it was teaming up with PC World to offer a free laptop to customers who signed up to its broadband service.

Dell president of global consumer products Ron Garriques said: This is part of our commitment to allow as many people as possible to enjoy the benefits of a wireless digital home.

Billingsley is to replace Pippa Dunn who has been made Oranges pay-as-you-go director.

He will lead Orange UKs advertising and marketing teams and will be responsible for the strategy and direction of the Orange brand. He will report directly to Jean-Pascal Van Overbeke Orange UK vice president of marketing.

Prior to his role with Nokia

Billingsley was with Coca-Cola for more than eight years in various senior marketing roles across the US Australia Indonesia and the UK.

Van Overbeke said: Justin will be a key member of my management team and have responsibility for the development and direction of the Orange brand.

Orange is no longer just a mobile company. We now offer mobile fixed-line broadband and soon home TV. Justin will be responsible for evolving the brand to make it relevant to these new audiences while keeping it true to the values and aspirations that make it great.

From August 30 3 customers travelling to European countries will pay 25p per minute for outgoing calls and 10p a minute for incoming calls. These prices are significantly below the EU Commissions recommended rates of 38p per minute for outgoing calls and 19p per minute for incoming calls.

3 UK chief executive Kevin Russell said: Were excited. This is a great opportunity to remove another barrier between consumers expectations and the reality of mobile pricing. Weve always believed theres room to bring prices down and the EU has given us a level playing field to achieve it.

The figures are revealed in the networks management interim statement which sets out Vodafone Key Performance Indicators.

UK churn is running higher than all other European countries where Vodafone is active. Total churn (prepay and contract) is lowest in Germany where it is 20.7 per cent.

The KPI statement also shows that 60.3 per cent of Vodafones 17.4 million customer base is on prepay. In total Vodafone sold another 2.6 million 3G devices phones in the quarter to June bringing the total 3G device base to 18.5 million.

O2 UK general manager of channel support Ian Driver said it had given CSM five weeks notice the field sales contract would end on July 25. O2 did not sack anyone by fax he claimed.

CSM managing director Kevin Morrell informed employees via a conference call. Four field sales managers employed directly by O2 were informed in person by Driver and also invited to discuss redeployment opportunities he said.

Nevertheless former staffers maintained this week O2 advised CSM on June 18 by fax that its contract with O2 would be terminated in five weeks. CSM passed the news on to staff on June 19 and informed them they could leave immediately. Former field staff put the blame at O2s door and suggested it indicated a move away from the indirect channel by O2.

O2 denied it was withdrawing from the dealer channel. In a letter to Mobile News Driver stated: This [withdrawal by O2 from the indirect sales channel] is false. O2 is investing heavily in the indirect sales channel for B2B connections via the O2 Advance programme and the O2 Centres of Excellence which are designed to raise connection levels improve ARPU and reduce churn.

Market conditions

Driver insisted O2s decision to let its field sales staff go was dictated by market conditions. He said the dealer channel is hardly engaged in consumer connections anymore and is now mainly being utilised for business connections.

At the same time Driver appeared to acknowledge O2 had played its part in altering the dealer landscape by cutting indirect contracts and reducing dealer commissions on consumer connections.

Driver told Mobile News the field sales team mainly looked after consumer outlets and as a result of a decline in O2 consumer connections from independent dealers had become redundant.

Driver said: When you look at what a field team is employed to do and look at the rapid decline for them in the market it became uneconomical. We made a decision to remove this cost and achieve what we wanted in other ways. They werent as effective as they were originally employed to be.

This is a result of a changing market place and not reflective of the work these guys did. They did very good work over the years and it was a hard decision to make.

But a former staffer said its field sales team visited every B2B dealer that sold O2. We saw them every month and talked about changes and new propositions from O2 and weve been doing that for years.

Driver claimed O2s Advance and Data Centre of Excellence programmes will provide its business partners with specialist data support going forward. Our move towards data is something our sales team would never have been able to deliver because its very specialised he said.

Again the staffer responded: We trained all Carphone Warehouse store staff on BlackBerry and XDA devices so we are a bit miffed by that claim. Thats not fair.

Reduced independent support

Driver maintained the removal of the field sales team is not an indication O2 plans to withdraw from the indirect channel altogether. But he admitted O2 has reduced its support for independent consumer connections.

Said Driver: Were investing more in the business side of indirect than ever. And our indirect partners dont do a lot of consumer connections anyway.

The majority of O2 consumer connections come via O2 retail outlets and online sales sites. Its single major indirect partner for consumer connections is The Carphone Warehouse. It dropped Phones 4U for new connections in February.

Driver also acknowledged a steady decrease in commission payments to the dealer channel has also stemmed the flow of indirect consumer business.

Independents have moved towards selling consumer contracts via networks like 3 and Orange which pay more commission.

Our direct stores became so successful that we didnt need the consumer volume from the independents so thats why we dont pay as much commission [as other networks] he said.

The network launched legal proceedings against the Cardiff-based company after rising customer complaints about cold calls claiming to be from O₂ and offering upgrades. Under the practice customers are then transferred unknowingly to another network. Communications Direct admitted liability after the first day of a High Court hearing.

An O₂ spokesman said: Were extremely pleased with the outcome. The important thing is not the money but the admission of liability.

The spokesman said the success could be largely attributed to customer feedback gathered through a customer nuisance call bureau: We have measures in place to encourage customers to come forward when approached in this way helping us gather evidence for a successful outcome.

The spokesman said four other companies are being assessed.

Communications Direct managing director Matt Burge said: The settlement will not materially affect the way we conduct our business given the quality of the systems we have in place. We also intend to work with O₂ going forward.

But the O₂ spokesman said: We dont have a trading relationship with Communications Direct and have no intention to establish one.

Communications Direct is the second provider O₂ has taken legal action against for trademark infringement following a settlement with Landmark Communications in December last year.

Traditionally fonesure has offered no minimum commitment policies payable monthly that can be cancelled at any time by the customer. The new policies take a one-off payment that covers a handset for a year after a single payment at purchase.

It provides the opportunity for independents to earn up to £18 in additional commissions when they sell the policy with a handset.

Fonesure managing director Stuart Turner said: The addition of a number of policies based on annual premiums was a natural development to our portfolio giving resellers a greater flexibility in their offering at point of sale.