The uptake of third-generation (3G) mobile technology could be under threat in the UK because Britons worry about the cost of using mobile phones far more than is commonly assumed, reveals research released today.
UK think-tank The Work Foundation said that many operators in the fiercely competitive telecoms industry are pinning their hopes on 3G, and new services such as video calls and football highlights.
But as the first 3G handsets start appearing on the high street the firm argues that steep phone charges remain the overwhelming concern of mobile users.
The cost of running a mobile phone can reach as much as £600 a year, a prohibitive sum to most Britons as, according to research, the average phone user currently spends well under half that amount.
"There is a myth that talk is cheap. In fact, for most people, talk remains an expensive worry that needs to be kept under control," said analyst Max Nathan, analyst and co-author of the report.
"Our research suggests that the mobile industry must remember how important cost is to most people who buy and use mobile phones.
"The industry is aware of this but it doesn't change the fact that, until 3G becomes better value, most consumers will find it an expensive worry too far."
Although over 75 per cent of adults and over 90 per cent of young people own a mobile phone, the report found that owners think their phones are expensive and addictive.
Users are all too aware of the cost of conversation: three-quarters of mobile phone users remain on pay-as-you-go contracts to help them control cost and keep aware of how much money they are spending.
As a result, the report suggests, 3G services will need to pass five 'economic tests' to ensure their success.
Pricing: Future phone services will succeed only if they are competitively and clearly priced.
Practicality: Successful 3G services should be closely linked to specific tasks and functions that a user will find valuable, such as picture messaging.
Sociability: Services that exploit social network effects are also likely to be popular, such as ring tones that can be passed on.
Mobility: Future services must target users' mobility, and specifically the times and places in which they are mobile.
Simplicity: 3G services will have to be simple and work properly.
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