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Last Updated: Wednesday, 16 February, 2005, 15:09 GMT
Emerging markets key to mobile future
By Joia Shillingford
BBC News business reporter, Cannes

Chinese boy using mobile phone
Mobile phone makers scramble for a share of the Chinese market
Emerging markets are the key to future growth in the mobile phone market, according to leading business figures speaking at the 3GSM World Congress in Cannes.

India, China, Russia, Brazil and Africa were highlighted as regions that would drive growth over the next five years.

"China is a multi-billion market for us," said Ed Zander, chief executive of US handset maker Motorola.

"China was cool for us before anyone else thought it was cool."

Jay Naidoo, chairman of the Development Bank of Southern Africa, argued that the developing world is where new subscribers are going to come from.

"There are a billion people in Africa but only 51 million using cellphones," he said.

"By 2006, we could see a quarter of Africa's billion people using them."

Indian approach

Sunil Bharti Mittal, chairman and group managing director of Bharti Enterprises, which runs a large Indian mobile service, said India could add another 150 million subscribers by 2010.

He urged Africa to adopt the Indian business model of charging two cents a minute for mobile calls rather then the 25 to 30 cents charged in many markets.

3GSM entrance

"You can do this in countries with big populations and still make money," he said.

Motorola is hoping to tap into developing markets further since winning a tender to make six million low-cost phones for less than $40 (30.7 euros; 21) apiece.

Mr Zander said one of the fastest-growing areas of Motorola's business was in sales of infrastructure for mobile networks.

Many of its recent contract wins had been in parts of the Middle East, South America and South East Asia.

Bharti's Mr Mittal said several developing countries would be among the top five nations for mobile subscribers by 2009, with China leading the way followed by the US, India, Brazil and Japan.

In 1993, I had never seen a mobile. But today in Johannesburg, all the vegetable sellers are talking on the phone
Jay Naidoo, Development Bank of Southern Africa

He added that: "Vodafone is growing at 9% but if you take out the money it earns from the developing markets it is in, its growth is flatter at 4% to 5%."

"We (Bharti Enterprises) are still spoilt," he said. "With 100% year on year."

Economic benefits

Mr Naidoo of the Development Bank of Southern Africa said that in South Africa most mobile calls are made between 9am and 5pm during the working week.

This is because people are using the phones to help them make a better living; for example, to check what vegetables are selling for in the nearest town so they do not undersell their produce.

3GSM conference
Crowds gather to talk mobiles in Cannes

"In 1993, I had never seen a mobile," Mr Naidoo said.

"But today in Johannesburg, all the vegetable sellers are talking on the phone."

Many of the business leaders present said handset costs and prepaid vouchers for calls must fall even further to reach more subscribers.

Bharti's Mr Mittal said: "It is my dream that handsets will fall to $10, $15 or $20."

He noted that if private mobile operators shared more of their networks, costs could come down, and added that prepaid vouchers should be sold in smaller units - $3 or $4 - instead of the more common $5.

Mr Naidoo told investors there was money to be made in the region and urged them to invest.

"I am very convinced mobile technology is an important part of driving economic growth," he said.




BBC NEWS: VIDEO AND AUDIO
Report on the 3GSM World Congress filed via a 3G phone




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