The British public love their mobile phones, but see little need to upgrade to Internet-enabled devices, says new research

More than half of British mobile phone owners aged between 15 and 34 would rather sacrifice their home phone than give up their mobile, but most are still unwilling to trade up to an Internet-enabled model in the next year.

The findings, in a report by consultancy firm KPMG, also indicated that 38 percent of all mobile phone users would rather part with their home phone if faced with a choice between the two. But of the 28 million adults who now own a mobile phone, only 15 percent have upgraded to an Internet-enabled phone.

And the study found that only 22 percent of "ordinary" mobile owners, about five million people, are interested in buying an Internet phone in the next 12 months. Forty one percent thought it "unlikely", while 37 percent ruled out ever buying a 3G phone.

"Our research supports views that the true explosion is not likely to happen in the short term. But with GPRS and 3G services on the way, it will happen -- and service and content providers need to be preparing in earnest for it now," said John Machin, head of information risk management at KPMG.

£22.5bn was spent on 3G licenses in the UK in April 2000, with the anniversary of the first auction falling this week. The bidding was driven by five mobile companies who were convinced that 3G networks, which will allow high-speed, always-on connections to the Internet, would generate large amounts of revenue.

Next generation services include the GPRS high speed, always-on mobile networks that are currently rolling out, as well as the coming 3G services. Third generation phones will be able to support applications such as video-conferencing and rapid downloading from the Web.

KPMG's research found that the three most important factors likely to persuade people to buy mobile phones are comprehensive functions, proven security and attractive pricing. But people said they would still use the phones mainly for text messaging. Only 13 percent see themselves using mobile banking.

A recent report by Jupiter MMXI predicted that 3G devices will only penetrate the market between 2003 and 2005, with better screens being the main difference from today's handsets. It also concluded that bandwidth will be improved -- but will still not be fast enough to stream music or video.