Selling mobile phones and the new 3G services has proved a bit of a challenge of late, but mobile operator O2 is hoping to revive consumer interest with a range of new handsets, services and pricing plans.

This month it launched its Xda (see full review PC Advisor September 02) — a combined phone and PDA (personal digital assistant) — and is planning an onslaught on the Christmas market with several MMS (multimedia message service) handsets from Nokia and Sony Ericsson, plus a camera phone from Sharp.

"Mobile data is already here," Peter Erskine, O2's chief executive said. "We have 175 million SMS (short message service) users and if you count them — and you should count them — 13.4 percent of our revenue came from data last quarter." Customers don't care that a new technology is being used to send pictures, but will just see it as an enhanced SMS so, he explained, that is how it will be marketed.

O2's Xda (pictured) runs Pocket PC 2002 Phone Edition software and gives users GPRS (general packet radio services) access to email and the web. "It can do pretty much everything a computer will do," Erskine said.

The MMS devices it will offer include the Nokia 3510, 7650 and 6610, plus Sony Ericsson's T68i and Sharp's GX-1 camera phone, all of which will be on sale in time for the Christmas buying period. Prices for these devices has yet to be set but are likely to be between £150 and £220.

Charging for MMS services will be "event-based", said chief marketing and data officer Kent Thexton. "Customers are used to, and happy with, paying 10p to 12p per text message. From research, we believe they want to continue that way, even if it means paying between 30 pence and 50 pence for MMS messages."

There should be no "big junction" for the consumer as the media gets richer — it should seem the same and be as easy for them to use, he said.

3G services where customers are surfing and downloading varying amounts of data will require a different pricing structure, with users being charged for the amount they download. O2 will develop a range of "price bundles" for these services, Erskine said. "Customers like bundles and like to know they have a spending limit," he said.

O2 has been running a 3G network in the Isle of Man since the end of 2001, together with subsidiary Manx Telecom. After trials of handsets and the service, it has set four tariffs, tailored for large corporations, small and medium-size companies, consumers and heavy internet users.

The first tariff costs £80 per month, with an extra charge of 50 pence per megabyte above 100MB. Below that, customers can choose to pay £50 for 50MB, with a 70p charge per extra megabyte; £25 for 20MB, and £1 per extra megabyte; or £5 per megabyte, and £2 per megabyte thereafter. These prices may be adjusted as the trial continues, the company said.