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Wednesday, 22 September, 2004, 11:05 GMT 12:05 UK

Mobile users 'want cheaper calls'

Nokia camera phones 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.

MOBILE PREFERENCES

  • 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 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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    Related to this story:
    Text technology given top marks (13 Sep 04  |  Scotland )
    Drivers 'carry on using mobiles' (03 Sep 04  |  UK )
    Mobile phone sales grow strongly (02 Sep 04  |  Business )
    Games giant muscles in on mobiles (02 Sep 04  |  Technology )
    TV project aims to kick-start 3G (19 Aug 04  |  Technology )

    RELATED INTERNET LINKS:
    Capgemini
    INSEAD
    Comviq (in Swedish)
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