THE traditional glitz of the mobile phone world is seriously lacking in the gloomy headquarters of Carphone Warehouse.

If there is an antidote to the industry’s annual conference, 3GSM — a festival of yachts, parties and flashy new gadgets in Cannes, on the Côte d’Azur — then this giant warehouse in North Acton, West London is it.

However, Charles Dunstone, the company’s 41-year-old founder and chief executive, is concerned with one thing only — the continued success of the business that he has built from scratch into Europe’s biggest mobile phone retailer.

After riding the wave of the late 1980s and 1990s, when it was as much as Dunstone could do to keep up with the demand for mobile handsets, Carphone, like the mobile operators whose phones it supplies, is adjusting to a new environment.

In the UK virtually every potential mobile phone buyer already has one, so the only way players suh as Vodafone and Orange can win customers is to lure them away from a rival.

Increasing saturation has not deterred new players from entering the market, however. Aside from the big four — Vodafone, Orange, O2 and T-Mobile — there are now several other mobile providers and new networks, including 3, the third-generation operator, Virgin Mobile, Tesco Mobile and now easyMobile, the mobile service of Stelios Haji-Ionnaou, the entrepreneur.

Competition is now so cut-throat that some participants have taken to promoting their products outside rivals’ stores.

Then there is the little matter of third-generation (3G) phones. After the sale of the licences in 2000 for a huge £22.5 billion and the hyping of the technology to the rooftops, 3G has, so far at least, proved a damp squib. Clawing back that cost will not be easy.

Dunstone, who has a 22 per cent share of the UK mobile phone retailing market, says that he would not wish things to be any different. These market conditions, he maintains, play entirely to his strengths.

The way he looks at it, the more players in the market and the more tariffs on offer, the better. Confused customers will feel all the more inclined to turn to an independent retailer like Carphone, which will explain what is the best deal for their particular needs.

And as 3G does begin to take off — most likely this Christmas, Dunstone believes — who, he argues, is better positioned to explain a new, confusing technology than Dunstone’s independent shop staff? “The more confusing the technology gets and the more fragmented the suppliers get . . . the more important our role becomes in providing an independent view on everything that is available within that market place,” he explains.

Besides, Dunstone points out, though in pure customer numbers the market is seeing saturation there is still room for “enormous growth” in terms of how much people use their phones and, crucially, how much they spend on them.

At present 65 per cent of the UK mobile market is still pre-paid — people who could in time become higher-spending contract customers.

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