Mobile users could see prices rise as demand soars

DEMAND from users of smart phones is set to grow substantially over the next five years forcing mobile phone companies to charge more for heavy users including businesses, warned the head of mobile firm O2 yesterday.

Ronan Dunne, the chief executive of O2 UK, said he expects his firm to double investment into mobile phone infrastructure to 700 million per year but that this will be insufficient to meet the demands of data mobile users downloading films and documents. He estimates data use will grow 200 times by 2015.

"Those who do want to use serious amounts of data on mobile phones, we will create a business model that will allow investment so people will continue to get the experience they deserve," said Dunne.

He added: "Mobile use is defined ultimately by physics. There is a limit to the amount of data that can actually be carried across the spectrum. It is a classic scarce resource we have to manage carefully for the largest amount of people."

Dunne was speaking at the Edinburgh Chamber of Commerce AGM at the EICC yesterday. He also admitted his firm, spun out of BT, was "rubbish" in 2002. But he said the firm, acquired by Spanish firm Telefonica in 2006, has since surpassed its parent to become the largest telecoms firm in the UK.