Carphone Warehouse has called on network operators to kick-start the sagging mobile phone market by pushing next generation services.

The overall mobile phone handset market slumped by up to 40 per cent last year as demand slid across Europe.

Carphone Warehouse is expecting the market to be flat this year with an upturn in 2003 as next generation (3G) services are rolled-out.

Newly-appointed chairman Hans Snook warned future growth depended on operators ensuring there was demand for the new services and making sure they were correctly priced.

He said: "It hasn't taken off in a huge way yet and I expect it won't until the end of this year. People aren't going to stop buying handsets and upgrading but it's a case of the networks getting the pricing and tariffs right.

"If people like something and find it useful, they will pay for it. What the right price level is has yet to be determined but when it's there people will start using these services a lot."

Mr Snook, the former Orange boss, called on the networks to provide free trials of 3G phones and services, such as picture messaging to bolster demand.

The comments came as Carphone Warehouse turnover nudged ahead for the year to March 30, up from £1.11 billion to £1.15 billion, although pre-tax profits, before one-off costs, dipped from £49.6 million to £46.8 million.

Chief executive Charles Dunstone said: "In a challenging year, we have outperformed a European handset market that is down by up to 40 per cent. Our market share has increased substantially."

The retailer aims to open a further 100 stores this year, taking its total portfolio up to 1,204.