Older and lower income people are still excluded from digital life and industry must look more closely at their needs, says UK communications watchdog Ofcom.
People are confused, misinformed, and do not know where to get help
Third generation mobile technology, 3G, came off the worst in a report into people's understanding and take-up of technologies.
Seventy-six percent either do not know, are misinformed or cannot explain 3G.
Many have become confused and are bombarded with information which turns them off experimenting with technology.
People also feel they cannot take up the opportunities new technologies have to offer, even if they wanted to, because the prices are still too high, Ofcom's Independent Consumer Panel report found.
Although people broadly knew what terms such as "broadband" and "digital TV" were, less that a third knew what "digital switchover" meant.
That is the term which describes the change from analogue to digital broadcasting that is taking place across Britain.
Grappling with the new
Most had "heard of" digital radio, but less than half asked actually understood to what it really referred.
"Our research provides a firm stake in the ground for the communications market," said Colette Bowe, the Consumer Panel chair.
"It is of serious concern to us that so many customers feel it is so hard to grapple with new advances related to phones, TV, radio and the internet."
Broadband: 62% aware of/understand it
Digital TV: 70% aware of/understand it
Digital radio: 47% aware/understand
3G: 15% aware/understand
Source: Ofcom Independent Consumer Panel
The report also found that even though knowledge of 3G was generally low, those with lower incomes tended to live in households with mobile phones, rather than landline connections.
They are paying proportionately more than higher income households for their phone bills through pre-pay deals though.
Third generation mobile services have had a hard time capturing the public's enthusiasm.
A survey earlier this year found that only 4% of those questioned said they were considering swapping their existing mobile for a new 3G handset.
Many cited the bewildering number of features on 3G handsets as the reason they were put off. But others think people just do not know what they can offer them.
"One of the main reasons that 3G has failed to catch the public's imagination is because its potential for e-commerce hasn't been promoted enough," said Michael Brady, mobile search firm Fast.
"One of the key factors in the development of online commerce was the evolution of search on the internet.
"3G needs to similarly be promoted as a new way to buy online. And once again, we believe that search needs to be specifically tailored for the mobile environment to encourage the uptake of wireless commerce."
Fiddly and confusing
Only one in five were interested in keeping up-to-date with technological developments, according to the research.
Partly, this is down to the kind of language that is used to explain technologies, what they can do for people, and how much they cost people. The older age groups feel particularly frustrated when it comes to understanding information they are given about technologies.
Older people are also especially irritated with devices and technologies that are fiddly to use, a problem shared with disabled people.
Twice as many people with disabilities, who are also under 65, said they found it difficult to use mobiles, than those with no disabilities.
TECHNLOGY IN HOMES
93% households have access to a landline
79% have a mobile
58% have access to the net
57% have digital TV
Source: Ofcom Independent Consumer Panel
"This is a wake up call for the industry really to listen to all its customers, not just the young," said Ms Bowe.
"It makes business sense to do so and the industry risks turning off a significant amount of potential customers if it doesn't act now."
Ofcom said the Consumer Panel would be holding workshops with industry and other groups to find out what can be done to alleviate the problems identified in the report.
Among the discussion will be how to get clear, easy to understand information about products to all socio-economic groups.
It will also look at how to make it easier for people to compare prices of technologies and where they can get help when they need it.