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Last Updated: Wednesday, 22 September, 2004, 11:05 GMT 12:05 UK
Mobile users 'want cheaper calls'
Nokia camera phones
Mobiles have increasingly offered more and more functions
New mobile technology is cutting no ice with consumers who want better coverage and value for money, a study shows.

More than half of consumers are unhappy with the price they pay for mobile calls, says a report into the European mobile market by consultancy Capgemini.

It found that many people would be happy to forego their fixed phone line entirely if prices fell.

Operators need to stop trying to out-compete each other on technology and get back to basics, the report said.

Money talks

Capgemini surveyed 27 operators across Europe and spoke to 1,216 consumers, in conjunction with the business school Insead.

44% would forego any advanced services
79% would increase mobile usage at expense of fixed line
49% would give up fixed line altogether
74% of users would increase usage if coverage was improved
79% would increase usage in cars if operators subsidised headsets
Just over half of these customers were unhappy with the price they paid for calls, with 44% willing to forego any advanced services such as picture and music downloads in order to secure cheaper voice services.

"Price is a big source of frustration for users and consumers are willing to trade down in order to get lower prices," said report author Jawad Shaikh.

"Using 3G may be high on the agenda for many operators but it has little relevance in the eyes of consumers," he told BBC News Online.

Instead, operators may be better off concentrating on the creation of low-cost brands, in a similar way to airlines introducing cheap no-frills flights, Mr Shaikh said.

The founder of Easyjet, Stelios Haji-Ioannou, is planning to introduce a service like this later this year.

While many operators have become out of touch with their customers' needs in their race to out-compete each other with new technology, some are taking a different approach, the report says.

Comviq in Sweden offers a basic, simple service at a low price.

It offers few advanced services and does not have its own store, using specific retailers and the internet instead.

Advances to come

The report found that 79% of users would increase their mobile usage at the expense of their fixed line if the price was right.

Increased coverage in places such as buildings, the underground and trains would also led to more usage the report finds.

Man using mobile phone
Different age groups want different things from advanced services
Three-quarters said they would use their mobile more if coverage was improved and 79% would use their mobiles in the car if operators subsidised headsets or car kits.

"It would be in their interests to do so," said Mr Shaikh, envisaging a future where new phones come pre-packaged with the kit necessary to make them usable in the car.

Getting back to basics could increase voice revenue for mobile operators but that does not mean that consumers are completely turned off by more advanced services.

The report found that there was a healthy level of interest in other services and different age groups focused on different things.

Older people were interested in the idea of monitoring health from mobile phones while young parents were interested in mobile services that would enable them to keep track of children.

Younger people were most interested in entertainment services such as music downloads.

Such services will have their day but not just yet, the report suggests.

"MMS has not been as successful to the extent it was anticipated and there doesn't look like there will be significant changes over the next 12 months," said Mr Shaikh.

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