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Tuesday, 18 June, 2002, 06:36 GMT 07:36 UK
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Nearly half of all UK mobile phone users are unlikely to use their handsets for anything other than basic voice calls, according to a survey in the Financial Times.

The news came as mobile operators are meeting in Asia, trying to rouse demand for new mobile services under the next generation of mobile phones known as 3G.

It also comes as Japan's Sony and Sweden's Ericsson unveil a new set of phones with picture-messaging features.

Mobile operators paid billions of pounds for the privilege of building 3G networks that offer faster internet services, video clips and colour photos.

But the faith in the future profitability of the telecoms market has since been seriously undermined over fears that consumers will not be prepared to pay for the latest services.

"The mobile industry is in crisis, not because of a lack of consumer demand for 3G, but because operators have been crippled by billions of Euros extracted by greedy government agencies," said Cerebrus Solutions vice president Vernon de Silva.

Estimating potential

The prices charged by 3G operators for their services will be crucial to the take-up of the new technology, analysts say.

British mobile phone operator MMO2 - formerly BT Cellnet - runs Europe's first live 3G network on the Isle of Man.

Based on this trial service MMO2 published a tariff on Tuesday of what it thinks individuals and businesses will pay to use the services.

Prices range from 5 to 80 a month ($7.50 - $120). The company's standard 3G business package gives 100 megabits at a cost 80 a month while the consumer package costs 25 for 20 megabits.

There is an additional charge for each megabit used above the number specified.

As its 3G trial continues MMO2 says these prices are subject to change.

Jim McCafferty of Societe Generale told the BBC's World Business Report it will be years before the potential of the 3G market can be estimated.

"We are still five to ten years away from knowing how big this market place really is," he said.

Absurd dismissal

The industry's fears were deepened by a survey on Tuesday that suggested that four in 10 Britons have no interest in the features that 3G can offer.

Mobile users listed checking their bank balance and paying bills as the most useful additions, when 3G did appeal.

But some industry officials dismiss the notion that people do not want 3G.

"The focus on 3G applications is misplaced," said Mr de Silva.

"It would be absurd say that users don't want 3G before the applications are even available.

"People need to be able to use applications as part of their everyday lives before anyone can pass judgement on 3G."

Asian markets

Mobile operators hope that Asian markets will drive growth and help compensate for saturated western markets.

CommunicAsia 2002, Asia's biggest telecommunications fair, opens on Tuesday with many firms promoting their latest developments in multi-media messaging.

Asian markets have shown the most enthusiasm for such services so far, and picture-swapping is already a popular past-time in Korea and Japan.

3G phones are currently being rolled-out in parts of Japan, in the world's most advanced testing ground for the next generation of mobiles.

Jim McCafferty, telecoms analyst at Societe Generale
"We are still five to ten years away from really knowing how big this marketplace really is"
See also:

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