The rapid growth in mobile phone subscribers over the past year has not encouraged mobile operators to provide a satisfactory level of service to their Irish customers, a new survey has found.

Two-thirds of businesses believe mobile phone firms offer inconsistent and uneven service, while 50 per cent of Irish companies are dissatisfied with the high cost of mobile calls.

The survey by IBEC's Telecommunications User Group (TUG) found that almost a third of businesses believed there was inadequate fixed-line and broadband telecoms infrastructure in the State.

This infrastructure deficit is affecting businesses' use of new technology with just 24 per cent of firms currently engaged in e-commerce activities.

The TUG survey shows the mobile market grew to 2.62 million connections in the second quarter 2001, up from 1.84 million in the previous year. But despite this impressive growth, two-thirds of companies in urban areas said they experienced coverage problems on a daily basis.

This figure was even greater for firms operating outside urban areas. Three out of every four firms surveyed which operate in these areas said they experienced coverage difficulties.

More than 30 per cent of respondents said they were either dissatisfied or very dissatisfied with loss of service while making calls, and half of the businesses said they were dissatisfied with the cost of mobile calls.

Ms Lisa Unden, telecoms analyst with research group Gartner - which partnered TUG on the survey, said these problems could be caused by having too many subscribers on mobile network cells. She said it could be a sign mobile firms were not investing enough money in infrastructure to cope with demand on their networks.

The survey highlighted that there was strong demand for fixed-line broadband services which could offer customers a range of high-speed Internet services.

Three-quarters of firms surveyed said they would use asymmetric digital subscriber line technologies if available while almost 60 per cent said they would use cable modems.

Neither of these technologies, which offer businesses and consumers high-speed access to the Internet, are yet available in the Republic following regulatory and investment delays.

Mr Turlough O'Sullivan, director general of IBEC, said there was a significant deficit in telecoms infrastructure and this must be improved to make the State competitive.

The study predicts the value of telecommunications to the economy will increase to £4.3 billion (€6.46 billion) by 2005, up from £2.5 billion this year.

However, this will represent less than 1 per cent of the European market.