Irish consumers are spending more than £1 billion (€1.27 billion) each year on information and communications technologies.

However, most of the spend, which covers residential and mobile phones, the Internet, personal computers and games consoles, is still going on phone bills.

This is the finding of an extensive survey of 1,010 Irish adults' self-reported expenditure on information, communications and entertainment (ICE) technology in the 12 months to July of this year. Amarach Consulting's latest "TrendWatch Technology" survey found that half of all current expenditure in the ICE sector is going on fixed line telephone bills.

Mobile telephony expenditure, however, is increasing steadily, and accounts for nearly a third of the ICE spend, running at £344 million annually.

This is already almost three quarters the amount paid out on fixed line telephony.

According to Mr Mark Henry, senior research consultant at Amarach: "Mobile phone penetration is only a third of fixed line, but users appear to be spending three times as much as residential phone users. There is an awful lot of fat on what's being charged, which a third operator could undercut and still run a very profitable organisation."

The prepaid model is proving extremely popular, with Eircell's Ready to Go and Esat's Speak Easy services accounting for almost 40 per cent of the total mobile telephony outlay.

The return to mobile operators of phone purchases is also only a fraction of the revenues generated through calls. The survey found capital expenditure on mobile phones was only 15 per cent of total bill expenditure by home users.

Personal computers remain a key investment for consumers, with £213 million spent last year on hardware alone. When software and accessories are included, it amounts to a quarter of the annual ICE spend.

Mr Henry added that PC prices were likely to fall in line with the US trend towards the sub-$1,000 PC.

Despite a high level of Irish Internet awareness, home Internet usage remains relatively low and only accounts for 1 per cent (£9.6 million) of the overall ICE spend.

This figure only represents Internet subscriptions, a figure likely to decline with the introduction of free Internet access. There were no figures available for what portion of telephone bills went on Internet access.

Ireland's reputation as one of the leading gaming locations in the world has been reinforced with the home gaming sector representing 6 per cent of total ICE investment, running at £61 million.

According to Mr Henry, half the games consoles recorded in the survey had only been purchased in the last year. A very high proportion of respondents - more than a quarter - said they had games consoles, but only 6 per cent planned to buy a console in the next six months.

"It appears the current market has run its course, and it will take the next generation of consoles to see equivalent expenditure again," Mr Henry said. All the major games producers have plans for new products in the next few months.