Tue, May 25, 2004 - Page 10 News List

New mobile phone subscriptions booming in China

PENETRATION RATE There are now more cellphone subscribers in China than there are people in the US -- but there's still plenty of room for growth in the market

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China, the world's largest mobile-phone market by users, said subscriptions rose to 296 million last month, exceeding the US population for the first time, as China Mobile (HK) Ltd and China Unicom Ltd boosted sales.

The nation added 5.4 million accounts last month, bringing new subscriptions this year to 27 million, the Ministry of Information Industry said.

At this rate, the percentage of Chinese people who own mobile phones may rise by 50 percent in less than two years, said CLSA Ltd analyst Francis Cheung.

"There is still a lot of room there," Cheung said, who forecast the number of mobile accounts would rise to 334 million by the end of this year.

"It's a huge country," Cheung said.

China, adding users at a rate of two every second, overtook the US, with a population of 293 million, as the world's largest mobile-phone market by customers in 2001, helped by rising affluence and falling call rates.

Still, only one in five Chinese has a mobile-phone account, compared with one in two people in the US and about two in three in Japan.

The so-called penetration rate in the Philippines is about 30 percent.

"There is no problem for China hitting at least levels similar to the Philippines," Cheung said.

Mobile services in China are provided by China Mobile, the world's biggest cellular operator by users, and China Unicom.

China Mobile's revenue of US$19 billion last year ranked third, after Britain's Vodafone Group Plc and Japan's NTT DoCoMo Inc.

China Mobile's sales may rise to US$25 billion in 2006, according to a Thomson Financial survey of 15 analysts.

Unicom's sales may rise to US$12.2 billion in 2006, from US$7.9 billion last year, Thomson Financial said.

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