The new wave of 3G phone services are too expensive to attract many customers in Britain according to a report out today. MobileUK: Mobile Phones and Everyday Life, which was commissioned by Microsoft and PricewaterhouseCoopers, found that as it is mobile phone owners think their phones are "expensive and addictive".

While many phone operators are pinning their hopes on rapid uptake of 3G services like picture and video messaging, the report's authors are sceptical about how much success these paid for extras will have in the UK. The running costs of a 3G phone could be as much as £600 per year, according to the report, and most customers are currently only paying well under half that on their mobile phone.

"There is a myth that talk is cheap. In fact, for most people, talk remains an expensive worry that needs to be kept under control … until 3G becomes better value most consumers will find it an expensive worry too far", says co-author Max Nathan from The Work Foundation.

The report found that people are applying a range of strategies in an attempt to keep mobile phone bills down. These include using a phone paid for by an employer; using a recognised call sign, where a missed call alert triggers a pre-arranged response, such as picking someone up from the station; only phoning those on your own network and sharing left over 'free' minutes between a family.

In order to ensure that 3G services are successful, the report suggests five economic tests a service must pass:

They must offer competitive pricing, as premium-priced services will miss out much of the potential market.
They must be practical and offer real benefits to the user.
Services that exploit social networks are likely to be successful.
They must recognise when users are mobile, for example the ability to book cinema tickets or check transport information on the move would be valuable.
The services must avoid the WAP trap, by being simple and easy to use.

"New technology only changes lives when people find it useful and cost effective", believes Microsoft's Neil Holloway.