'Disillusion rife' among users of mobile phones

MARY FAGAN

Industrial Correspondent

Many thousands of mobile telephone subscribers are disillusioned, with about one in four regretting the choice they made and many deciding to disconnect, according to a report by the Consumers' Association due to be published in March.

The association believes that its survey - "Consumer's Verdict" - will show that the industry has failed to give a good enough service for the prices charged and that the networks and the equipment are too often unreliable. It also criticises the tendency to lock people into long-term contracts with expensive penalty clauses for those who want to opt out before the agreement expires.

As a fundamental improvement, the association wants people always to have the right to try the service in their home or wherever they would most often be using the telephone.

It is also angered by the practice of charging premium prices to people who call from their normal fixed telephone to someone using a mobile. Many people calling mobiles assume they are paying the normal fixed-wire price.

The initial findings emerge as the industry braces itself for another round in the price wars, with Vodafone and Cellnet - the main network operators - squaring up to competition from rivals, Orange and Mercury One-2-One. The two market leaders each have about 2.3 million subscribers compared to a few hundred thousand for the newcomers. But Orange and One- 2-One have pitched themselves firmly at the mass market which is where many believe the future of the business lies.

Last month, Vodafone announced a new range of prices which provides billing on the basis of seconds and offers a certain amount of "free" call time depending on the monthly fee. One City analyst said that the packages make Vodafone about as cheap as Orange for some types of user, but he added that the larger company still has some way to go to close the gap.

On Tuesday, Vodafone and Cellnet revealed that the number of new subscribers in December was sharply down on the previous festive period when they featured strongly on Christmas present lists. The implication is that people are now much more conscious of the on-going cost of using the telephones, the initial price of which can be extremely low.

Sir Gerald Whent, chief executive of Vodafone, said that in spite of the downturn at the end of 1995, the year as a whole was one of "exceptional" growth in every other month.

Comparisons between prices on the different networks are extremely difficult, because of the confusing plethora of packages of subscriptions and call charges from each operator.

Vodafone estimates that the average spent by each of its customers is still about pounds 470 a year, in spite of the introduction of lower-cost deals for consumers. Cellnet's annual expenditure per customer ranges from pounds 240 on consumer packages to pounds 700 for higher paying executives.

The Consumers' Association believes that in the industry as a whole, is it almost impossible to spend less than pounds 200, even when customers do not make any calls.