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Mobile rush causes chaos on networks

THE SCRAMBLE for mobile phone customers, ushered in by supermarkets offering pay-as-you-go packages for less than pounds 40, has led to a huge increase in sales but left many new users unable to make calls.

What is more, unprecedented demand could swamp existing mobile networks well before the next generation of mobile services is on stream after 2002.

The rush has become so frantic that many service providers, the companies responsible for connecting new users to the four mobile networks, are having problems handling demand. Most disturbing is that the mobile phone industry is finding it difficult to cope in August - traditionally quiet compared with the autumn and pre-Christmas periods.

Ten days ago, the supermarket groups Asda and Tesco cut prepaid mobile packages to pounds 39.99, from pounds 69.99. Since then, nearly 100,000 phones have been sold but some users have not been able to log on to the network.

A week ago, Don Mottershead of Warrington, Cheshire, paid a local BT Shop pounds 49.99 to buy a handset as a security precaution for his daughter Linda, who was planning a camping trip this weekend. He has returned the phone after dozens of efforts to connect to BTCellnet's network. "I kept getting a message saying `we're very sorry but due to popular demand you can't be hooked up'," he said.

His experience is far from unique - as mobile network and service providers acknowledge privately. "If you scratch beneath the surface you'll find there's a lot of disgruntled people out there who didn't realise there was more to a mobile phone than putting it in a supermarket trolley," a spokeswoman for Carphone Warehouse said. "It is an incredibly complex market."

To meet booming consumer demand, Carphone Warehouse is adding 500 service staff and opening 120 new stores by the end of the year. BTCellnet acknowledged yesterday that the surge in demand - it has 4,000 new prepay users a day - is overwhelming its systems.

A spokesman said: "We know there are people that are having difficulty."

The BT subsidiary has increased service lines by one-third and bumped up support staff by 40 per cent. "The recent round of high-street price cuts have created quite a surge in demand for prepay phones," the spokesman said. "It's way above what we'd expect at this time of year."

The three other operators - Vodafone, One2One and Orange - are faring better, but are clearly worried that the combination of heavy price cutting and the traditional pre-Christmas boom could spell disappointment for many customers.

"We don't appear to be having any problems on our side but that could change owing to the propensity to give mobiles as gifts for Christmas," said a source at one mobile company. "People have got to recognise that as prices are cut, volumes will increase exponentially."

If current growth accelerates, experts fear network operators will have difficulty handling demand. The Government is delaying until next year its auction of third-generation mobile frequencies.