Only five million customers in western Europe will be using a 3G mobile device by the end of 2004, and subscriber numbers will remain low until at least 2005, market researchers have predicted.

A report by Analysys Research found that, despite a number of 3G service launches in 2004, there will be just 5.3 million 3G subscribers in western Europe by the end of the year, up from 600,000 at the end of 2003.

But a growing number of major launches, expected to happen towards the end of 2004, will result in "significant growth" in 3G subscriber numbers from 2005 onwards.

Demand for 3G services is then expected to rise quickly, with around 70 per cent (240 million) of all western European mobile subscribers using a 3G-enabled device by the end of 2009.

"Several western European operators have launched 3G data services in 2004, increasing the likelihood that others like Orange, T-Mobile and TIM will be successful in entering the 3G mass market during the year," said report author Ariel Dajes.

"Recent market developments also make it more likely that handset manufacturers like Nokia will be able to deliver sufficient numbers of 3G handsets of the right quality in the second half of 2004.

"3G handset design has been widely criticised by operators with complaints that size, appearance and battery life will not be acceptable to customers who, over the past few years, have seen huge innovation in GSM handsets.

"At the same time, equipment manufacturers have complained that issues surrounding handset availability are to do with networks not being ready to enable proper testing."

The report also discovered that poor network coverage issues are being addressed in some cases through the use of alternative technologies like Enhanced Data for GSM Evolution (Edge).

A number of operators, such as Orange, were found to be deploying Edge to enhance their GPRS networks and to complement their 3G W-CDMA coverage in rural and low traffic areas.