India a key driver for telecom boom

Shailendra Bhatnagar

NEW DELHI: Emerging markets including India, China and Russia will lead a surge of new users entering the mobile market in the next few years, the head of the world's leading mobile phone maker Nokia said on Thursday.

Jorma Ollila, Nokia's chairman and chief executive, said there would be about two billion users of wireless services in 2008, up from about 1.3 billion now, and data traffic would continue to gain importance.

"We see over 80 percent of global mobile subscriber growth coming from new growth markets in next five years," Ollila told an industry seminar.

"India, China, Russia, Indonesia and Brazil will be the key drivers for our industry."

Most of these countries have expanding economies and the demand for wireless gear and phones is relatively higher than in western markets, because of low penetration rates.

Finland's Nokia, which makes about two of every five name-brand handsets worldwide, began its Indian operations in 1994 and is the leader in the $1.4 billion Indian handset market.

India, with a population of more than one billion people, has close to 30 million mobile users. The number is forecast to expand to at least 100 million by 2005, helped by some of the lowest call rates in the world.

Only three in a 100 Indians own a mobile phone, compared with more than 20 in China and more than 60 in Europe, but mobiles are no longer considered to be luxury items and ownership is spreading fast.

"India is the fastest-growing mobile market in the world today," Ollila said.

Ollila said that although voice calls would continue to anchor revenue for services providers, data traffic globally would grow in significance due to the flow of text messages, pictures and Internet downloads.

"Mobile data services will make up an increasing larger share of the mobile services market," he said. "We see data accounting for some 27 percent of the total mobile service market in 2007 compared with 10 percent in 2002.

"And during the same time period we foresee mobile services market to nearly double from last year's level of more than 600 billion euros ($730.9 billion)."

© Reuters