The adverts may be everywhere but customers of 3, the UK's newest mobile phone company, seem unsure whether the business will still be around in a few years.

According to figures released yesterday, 60% of 3's customers have opted to pay for the company's services on a pay-as-you-go basis through its 3ToGo tariff, rather than taking out an annual contract.

Just 3% of the customers signed up since the company's launch in late-February have opted for its premium Caboodle service, which costs £99.99 a month and requires a year-long contract.

The figures are in contrast with the rest of the mobile phone industry, which has been trying hard over the past three years to persuade customers to move off pre-pay tariffs as contract customers tend to be more lucrative.

Speaking at the sidelines of yesterday's FT World Mobile Communications conference in London, Colin Tucker, deputy chairman of 3 in Britain and Europe, said the preponderance of pre-pay users was not a concern.

"All the early evidence is that the average revenue per user we are getting from these customers is fine," he said.

Analysts estimate that only 40,000 people have signed up for the service in the UK while more than 70,000 subscribers have joined in Italy, but Mr Tucker would not comment. He did indicate, however, that the company may only get "close" to its target of 1m UK customers by the end of the year.