UK mobile companies benefit from pay-as-you-go schemes

The UK's national mobile phone operators - Cellnet, One2One, Orange and Vodafone - have this week recorded healthy customer gains for the most recently completed calendar quarter.

Vodafone still leads the way, with over seven million customers worldwide, and just under four million in the UK. The company has signed up over 300,000 UK customers since June this year - 127,000 of whom joined the Pay as You Talk scheme.

Cellnet's performance also picked up, not least because it has joined the other three operators in offering a pay-as-you-go service. The BT-Securicor joint venture has had 80,000 customers join its pre-pay Easylife package.

Justine Hayes, principal analyst at the Yankee Group, commented: "Pre-pay is opening up new types of consumer markets, and it will become increasingly used by some businesses as a way to control costs."

The UK mobile sector has traditionally been a laggard when compared to those of other European countries, but the introduction of pay-as-you-talk schemes has boosted the uptake of services.

Peter Richardson, an analyst at Gartner Group's Dataquest unit, said the growth of these services would not be detrimental to business users. The business market is projected to grow more slowly than the consumer market.

"Business customers represent the largest proportion of revenue and will do for some time. They are the powerhouse for generating revenue," he said.

Orange, the UK's newest network established by Hutchison Telecom, reported 200,000 new customers for the three month period, with chief executive Hans Snook once again predicting "wirefree will increasingly displace fixed wire phone usage".

One2One recorded the weakest growth, with just 127,000 new users, but analysts said the company - which has done well to shrug off its one-time image as a patchy, south-east-oriented operator - should not be dismissed because of a single poor quarter.

In terms of long-term growth, the operators and some analysts are predicting 50 per cent population penetration by 2004. Hayes added: "We're not quite so bullish. We're forecasting 40 per cent in that time frame. Given a possible recession, mobiles will be the first thing to go for some people."