Mobile phone shortage looms

A SHORTAGE of mobile phones looms in the UK as the industry prepares for its most frantic selling season ever, Vodafone warned yesterday.

Chris Gent, chief executive of the UK's largest mobile phone operator, predicted that the supply of handsets would be between 40,000 and 50,000 short of demand.

The shortfall is the result of a buying frenzy, spurred on by heavy discounting by supermarket retailers. Asda is offering consumers a Cellnet phone and pounds 10 worth of free calls for just pounds 69.99. The offer has been matched by Tesco, selling a similar offering from Vodafone.

More than one million new mobile users are expected to sign up in the final quarter of the year, taking the total number of UK users to more than 11 million. Most growth is expected to be in pre-paid mobile phones - packages where the user pays for the phone and calltime up front without signing a contract or paying a monthly subscription charge.

Mr Gent yesterday predicted that eight in 10 of the new customers Vodafone signed up in the UK would be pre-paid users - a sharp increase from earlier periods.

Mr Gent insisted that Vodafone had enough phones to meet demand, but suggested that other network operators might run out of stock.

A spokesman for Cellnet said: "I'm not sure anybody can predict the market with such prescience," he said. However, he asked customers to "be patient" if retailers temporarily ran out of stock.

The selling frenzy has worried analysts, who fear that many customers given the phones as a Christmas present will stop using them when their free time is used up.

Mr Gent criticised as "inappropriate" the decision by Don Cruickshank, the former director general of telecoms regulator Oftel, to join United News & Media as a consultant. Mr Cruickshank is advising United News on making a bid for the third generation of mobile phone licences.

Vodafone yesterday reported a 60 per cent rise in pre-tax profits to pounds 467m for the six months to 30 September.