Mobile carriers have stopped looking at location-based services as a possible premium service, according to a panel of wireless carriers at the CTIA Wireless IT and Entertainment tradeshow in San Francisco.

Location-based services were considered the next big thing for mobile carriers. Adding GPS technology to mobile handsets, or looking at the mobile transmitter that an individual is using, would allow users to determine their position.

The technology could then allow them to locate nearby friends, or point them to local shops and services.

While location-based services are finding some applications with enterprises, they have failed in the consumer market.

"Finding a friend is fine maybe once," said J H Kah, global vice president at South Korea Telecom. "We do make a good revenue from it, but it's still a small portion [of our overall business]."

Mahesh Prasad, president of Indian mobile operator Reliance, added: "There are no compelling applications for consumers. Find a friend is not what I call a compelling application for people to pay for."

The disappointments contradict an earlier projection by analyst firm Juniper Research, which said in June that the market for location-based services is set to grow from $1bn to $8.5bn in the next five years.

The services are a typical example of businesses getting over excited about a technology while failing to look at the usage case for consumers, argued Graeme Ferguson, director of global content development at Vodafone.