The spectre of a further price war in the UK mobile market was raised today when 3 the “next-generation” mobile operator vowed to plough more money into winning customers.

Hutchison Whampoa, the Hong Kong conglomerate which owns the 3 mobile businesses, and is flush with cash after selling its Indian mobile business to Vodafone, said it planned to increase its level of promotional discounts this year in a bid to win higher quality contract customers.

Seperately today it announced that proceeds from the sale of its Hutchison Essar stake would net around US$4.7 billion.

In the UK, where 3 is the smallest operator with its own network, customer numbers increased last year by only 14 per cent to 3.9 million.

“It is expected that the level..of..discounts, will tactically increase this year, as required by specific market needs,” it said.

The move by the group, which has already racked up billions of losses on its “next-generation” mobile ventures comes amid what it described as “intense” competition.

In Western European markets such as the UK most people who want a mobile phone already have one. Instead of finding new customers mobile operators are instead being forced to seek to lure over existing customers from rival players.

Although Hutchison insists publicly that it is fully committed to its mobile businesses, analysts believe 3 UK is a prime consolidation candidate.

In a sign of the vulnerability with which the business is viewed by rivals, Vodafone, the world's biggest mobile player, declared late last year that it would look at 3's European assets if they come up for sale.

But while the business, which has 3.9 million customers in the UK and Ireland, has been touted around by Goldman Sachs, the investment bank, many rivals claim that Hutchison has unrealistic pricing hopes.

Last year a planned flotation of 3’s Italian mobile business - which would have helped to set a value on the mobile companies - was pulled. Hutchison cited weak market conditions.

The full-year 2006 results of Hutchison Whampoa showed that total losses at the 3 Group, which includes business in the UK, Italy, Australia and Sweden, narrowed by 45 per cent to HK$20 billion (£1.3 billion) while total revenues grew 35 per cent to HK$50.7 billion.

The group, whose interests also include ports and property, said that it was on track to hit break-even in its worldwide mobile operations, after taking into account subscriber acquisition costs, in the first half of this year.

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