If their predictions are right, there will be almost 12 million mobile phone users in the UK by the end of December - an increase of more than 40 per cent since January.
In any normal industry, investors would welcome growth rates such as these with open arms. But the City is becoming distinctly nervous about the prospects for mobile phone operators. Revelations in today's Independent on Sunday that the industry itself has doubts about the safety of mobiles will add to those fears.
Shares in Orange and Vodafone - the only two networks separately listed on the Stock Exchange - soared earlier this year as the bull market reached its peak. But recently they have retreated as investors have questioned whether the operators' explosive growth can only be maintained at the expense of profits. Shares in Orange are down 33 per cent from their peak. Vodafone has lost a fifth of its value since August.
The main concern is price competition. This week, Asda started selling Cellnet's "U" package, which includes a mobile phone and pounds 10 worth of calls and is aimed at teenagers and students, for just pounds 69.99. Carphone Warehouse, the specialist retailer, responded by offering the same package for pounds 64.99.
Mobile phone operators are also facing concerns about regulation, with Oftel, the telecoms watchdog, preparing a number of rulings that could change the way the industry operates.
Meanwhile, groups are also facing an expensive auction for licences next year for the next generation of mobile telephony, which will allow users to access the internet and buy products from their handsets.
This Christmas, the market for pre-paid mobiles, which dispense with contracts and monthly charges and require users to buy minutes of airtime in advance, is the key battleground. Every operator has at least one pre- paid package.
Moreover, the fight for new customers is getting nasty. On Friday, One2One issued a writ against Cellnet, arguing that the latter's "U" sounded too similar to One2One's "Up 2 You" - a claim that Cellnet rejects.
Pre-paid phones have been the great success story of the past year. Until they were introduced in the run-up to last Christmas, growth in mobile phone subscribers was slowing. But pre-paid phones have opened up a new market, making mobile phones available to people who are worried about being lumbered with a large bill at the end of the month, or whose credit history makes them ineligible for a contract.
Pre-paid phones have also removed much of the confusion surrounding the sale of conventional mobile phones, with their plethora of different pricing packages. The result is that roughly one in every two new phones sold is a pre-paid one.
"The moment you put a mobile phone in a box is the moment it's going to be considered very seriously by the supermarkets," says William Ostrom, corporate communications manager for Cellnet.
The Asda-Cellnet partnership aside, Boots is planning to offer Vodafone's pre-paid phone while Sainsbury's is preparing to link with One2One.
From next year, the stakes will be raised when number portability is introduced, allowing mobile users to switch to a different network while keeping their numbers. Experts predict the change will force operators to offer existing customers extra incentives, such as new handsets, to prevent them switching.
But mobile phone operators are now not only competing with each other, they are also taking on British Telecom. Orange, often seen as the most aggressive operator, is urging customers to give up their BT phone altogether. It claims they can save hundreds of pounds a year in line rental and call charges by signing up to the Everyday 20 package, which offers 20 minutes of off-peak calls a day for just 50p.
Hans Snook, Orange's managing director, reckons this is just the first step towards a "wire-free future". "The idea that wire-free phones will displace fixed ones is still novel. Within a few years it will be a commonplace reality," he says.
This wide variety of offerings means mobile phone use is set to soar. In a report published last week, Continental Research, the market research group, forecast that the number of subscribers would double to more than 20 million by 2003.
But just how profitable will these users be? The same report confirmed what many analysts have always suspected - that pre-paid phones generate less revenue than standard ones. The average monthly bill for a mobile subscriber is about pounds 30. For a pre-paid user, it is nearer to pounds 20.
Given that the cost of the phones is heavily subsidised by the networks - even a standard phone costs more than pounds 200 to manufacture - operators face the worrying prospect of not generating enough traffic over their networks to justify the money they spend attracting new customers.
However, Cellnet points out that because it is buying pre-paid handsets in large volumes, it can negotiate better prices with the manufacturer. "We are not using these phones as a loss-leader," Mr Ostrom insists.
Meanwhile, price competition looms. Analysts point out that mobiles will only displace fixed phones if their prices are truly competitive - and the cost of fixed lines is falling, too. "Do you really think BT is going to stand by and let Orange eat into its traditional market?" asks one expert.
A series of papers from Oftel could also change the way mobile operators work. Until now, the industry has been vertically integrated, with operators both running the network and selling the services available on it.
A ruling from Oftel, due next month, could force them to make capacity on their networks available to third-party operators. This would open the way for brands such as Virgin to enter the market - intensifying competition and driving down the returns mobile phone operators make from their networks.
While Orange insists it is "comfortable" with this possibility, both Cellnet and Vodafone vehemently oppose it.
Finally, there is the looming auction for the third generation of mobile phone networks. Next year, the government is planning to sell off four licences to operate Universal Mobile Telephony Services, a new standard which will support much higher speeds of data transfer than existing phones can manage. Although these licences will open up a ream of new services, such as mobile internet access and video telephony, they will also be expensive. The details are not yet clear, but analysts estimate that each licence could cost as much as pounds 500m - and that is before the winners even begin to start building the new networks.
All in all, the mobile phone industry is facing a turbulent 12 months. A few clear winners are likely to emerge, but it is also seems a certain that at least one of Britain's four existing mobile networks will lose out.Reuse content