IN DECEMBER 1985 Eircell launched Ireland’s first mobile phones. Hefty, brick-like devices, the cheapest model available was priced at IR£1,395 (€1,770) and coverage was pitiful outside Dublin.

Just over 20 years on, the mobile market is worth about €1.5 billion and the country has 100% mobile phone penetration with more than 4m subscribers. Vodafone and O2, the top two players, last year earned profits of €550m between them.

But with both Vodafone and 3 refusing to release any new 3G figures for Ireland, and O2 saying nothing about the success or otherwise of its internet-based i-mode service, the perception is that the country’s hitherto promiscuous mobile phone users have come over all shy when it comes to adopting these latest technologies.

In September, less than 5% of Vodafone’s Irish subscribers had 3G handsets. New figures released last week by Comreg, the communications regulator, show that while awareness of 3G services in the corporate sector is high (90%), usage remains low, with just 6% of SMEs and 18% of larger companies providing 3G handsets to employees.

The report stated: “Overall the findings suggest that many businesses have not been bowled over by 3G services and have yet to see the business benefits associated with using them.”

All three companies are mercilessly plugging their respective 3G (or similar) services, but some industry watchers have expressed doubts over the operators’ application of the technology, which is dominated by music, ringtone and video downloads, and their ability to generate long-term revenue.

“The killer application is never the one in front of your face,” said Darragh Stokes, the managing partner of Hardiman Telecoms, a Dublin-based consultancy. “Do we all really want to be downloading video clips? The real revenue generator using 3G will be transactional, not downloads.”

Stokes said that mobile companies needed to focus more on 3G products that earn them a percentage of physical monetary transactions, such as paying a toll on the M50. “Mobile phone companies will become like transaction brokers, picking up a minor percentage of physical transactions in a move towards a Visa-type approach.

“Operators need to pay more attention to segmented products rather than mass products (such as music or sports downloads). I’m surprised companies have not embraced the electronic wallet approach with 3G. The technology and the handsets are there.”

He also queried 3G pricing strategies. “In the Irish market, there is still a lot of pay-per-use. When it’s all-inclusive, people will use it more.”

Much of 3’s 3G content is included in its pricing bundles, with some downloads costing extra, but most of Vodafone’s 3G and O2’s internet i-mode services are pay-per-use.

Stokes did say, however, that winning over Irish consumers with 3G is something that operators would succeed in doing.

“People may be still using 3G phones for talk and text, but once it’s in someone’s pocket, you can begin trialling them on other uses. You’ve got to build it before people will come. But one thing is for sure: it won’t be as quick as everyone thinks.”