3 offers pay-as-you-go 3G mobile

UK 3G mobile operator 3 is offering a pay-as-you-go service - though currently only on one handset.

The operator, which launched its services in mid-2003, signed up 210,000 subscribers to its post-paid services by the end of the year.

Now it has opened up to customers who want to use it on a pre-paid basis via its ThreePay contract.

This pay-as-you-go option is initially available only on the Motorola A835 handset, with credit purchasable in chunks of £15 (for 100 minutes), £25 (500 minutes) and £35 (750 minutes).

Each of these packages includes extras, such as video calls, worth £1.50. Users can also add on extra services, with £5 buying 10 minutes' worth of video calls, for example.

The company said it would not charge a higher per-minute rate for pre-paid than post-paid, which is the norm in the 2G world. And, unlike its GSM competitors, 3 is not targeting the low end of the market with ThreePay.

"It's just that some of our customers prefer the comfort of paying for our services as they go, rather than on a contract basis," explained a 3 spokeswoman.

Despite costing more for the customer on a per-minute basis in the GSM world, pre-paid services tend to represent a lower average revenue per user (ARPU) rate, simply because operators' target customers will stop using the phone at times of the month when money is tight.

But 3 does not expect that to be the case with ThreePay.

"Our ARPU was £44.56 a month in December, and we're not destroying our market value with pre-paid," said the company's spokeswoman.