A United Nations report says there are nearly 400 million mobile phones in use globally - with another 250,000 new users being added every day.

The BBC's Claire Doole: UN says it is no longer a question of if mobile phones will outnumber traditional lines but when

The International Telecommunication Union (ITU) says a handful of countries, both rich and poor - including Finland, Cambodia and Rwanda - already have more mobile phones than fixed line phones.

It says mobile phones accounted for 51% of all telephone lines in Finland last year, and one-fifth of households no longer have a fixed line.

In Rwanda, cellular phones account for 58% of the market, and in Cambodia the figure is even higher, with mobile phones taking up 72% of all subscriptions.

Different demands

Demand for mobile phones has surged ahead in these countries, but for very different reasons. Finland has led the way in mobile phone development and manufacture, and prices are low.

Cambodia and Rwanda, on the other hand, both had much less extensive fixed networks in the first place.

In Cambodia, it is far easier and less dangerous to put up cellular antennas than to run phone lines across landmine-strewn terrain.

The ITU's Tim Kelly says cellphones could overtake land lines as early as 2001, but most probably by 2006-7.

US lags behind

While mobile phone use is soaring in Europe - particularly in Italy and France - North America is still struggling to catch up.

Fewer nationwide operators and the widespread practice of charging users for incoming calls have discouraged take-up, according to the report.

250,000 people are switching to mobile phones every day, says ITU

In 1998, some 28% of United States telephone subscribers were on cellular phones. But the nation remains the world's largest mobile market, with 69m subscribers.

The ITU says that pre-paid mobile services are helping to speed the cellular revolution.

With 40m subscribers last year, "pre-paid only systems may be the wave of the future" - cutting out contracts, and giving people with low or irregular income who would not normally qualify for a contract access to their own telephone lines, the report says.

This system is proving popular in Italy, where three-quarters of cellular users have a pre-paid phone.

Mexico, with 60% of subscribers using pre-paid phones, is not far behind. The system is also growing in popularity in developing Asian countries such as Indonesia and the Philippines.

Competition

As mobiles have become more popular, the business has remained relatively unregulated.

"All but 1% of mobile telephone subscribers actually have a choice of supply," said Mr Kelly.

While almost 100 countries have a competitive mobile market, less than a third of that number have similar competition in basic telephones.

Companies specialising in cellular services appear to be charging generally lower rates, "following a more aggressive business strategy" than those with a fixed-line business, the ITU says.

But despite continued price cutting, newer, more advanced telephones should mean that revenue from the mobile market will outstrip that of land lines by 2004, the report predicts.