Buying stolen mobile phones is a "waste of money" because the industry blocks them within 48 hours, a new advertising campaign will aim to point out.
Network subscriptions have increased to 72m in the UK
The Home Office adverts will use abbreviated text and be distributed via networking websites such as Facebook and MySpace, to target under-25s.
The £500,000 campaign also includes ads in magazines, phone boxes and on bins.
About 800,000 people had their mobile phones stolen in England and Wales last year, government figures suggest.
The release of the statistics last month was the first time the Home Office published figures for the number of people affected by this type of crime.
Children and young adults are most likely to suffer a mobile phone theft, according to the British Crime Survey.
The Home Office said that although the majority of thefts occurred when a handset was left unattended, some were forcibly taken from their owners.
One was stolen in around 52% of robberies and a mobile phone was the only item taken in around 28% of such crimes, the government said.
Crime Reduction Minister Baroness Scotland said: "I want this campaign to take the bottom out of the illicit phone market entirely.
"Young people should be left in no doubt that stolen phones won't work anymore. The prize will be a dramatic reduction in mobile phone crime overall, making young people safer."
Jack Wraith, chairman of the Mobile Industry Crime Action Forum, said independent testing had shown the UK phone industry had exceeded its own target and was now able to block 90% of mobile handsets across all UK networks "within 48 hours of them being reported as stolen".
But he added: "The reality is that most mobile phones can be blocked within a matter of hours."
He said the adverts were targeting people who steal mobile phones to sell them on for cash.
They are also aimed at those buying the phones, which he said are likely to be 16-25 year olds, who purchase them because they are a "bargain".
Mr Wraith said the campaign would remind people that "for every stolen phone there is a victim, and that victim might well be lying in the gutter, and that next victim might be you."
Mobile phone companies are able to ban stolen phones from accessing the UK's five networks by using the handset's unique IMEI number (International Mobile Equipment Identity).
Offering to unblock a mobile phone carries a sentence of five years in prison and an unlimited fine.
Reported mobile phone thefts, according to industry figures, have gone down month-by-month over the last few years, Mr Wraith said.
The campaign starts on Monday and is scheduled to run until mid-August.