Top mobile handset maker Nokia expects 200 million new subscribers to sign up for mobile phone services in the rapidly growing Chinese market in the next three years, the company said on Thursday.
The Finnish group expects huge growth in mobile use in the the Asia-Pacific region but fierce price competition will limit revenue growth there over the next few years, its Networks division head Simon Beresford-Wylie said.
“(In) 2006 to 2008 in APAC we expect that the market will be flat to growing slightly,” he told investors at a presentation in India.
“While there’s huge subscription growth, the price erosion will effectively offset that.”
In the second quarter of this year, Nokia said it had a mobile phone market share of 32 percent in China, while in the Asia-Pacific region as a whole its share was 30 percent.
There were some 400 million subscribers in China at the end of last year.
Beresford-Wylie said Nokia expected three and possibly four 3G mobile licenses to be issued in the country, most likely in the first half of 2006. Building those networks would probably start in a “meaningful and material way” in the second half.
New operation in India
Research group Gartner said on Thursday the global mobile handset market is on track to rise 16 percent to 780 million units this year after the industry sold 190.5 million handsets to consumers in the second quarter.
Nokia expects the global number of mobile subscribers to pass the 2 billion mark in the fourth quarter and to reach 3 billion by 2010.
The overwhelming bulk is expected to come from growth in China and India as well as Russia and Brazil.
In addition to seeing India as a huge market, Nokia also announced it would open a global mobile networks operation center in the country by the end of the year.
It already has research and development operations in India and is building a manufacturing plant in the southern port city of Chennai.
The new networks operation center would carry out work for some mobile operators in the Asia-Pacific region, Europe, the Middle East and Africa.
The center would employ 100 people, but Nokia did not say where it would be located and gave no financial details.
Rival Motorola Inc., the world’s second-largest handset maker, said earlier on Thursday it would consider making telecoms equipment in India as it seeks big equipment deals from state-owned carriers in the fast-growing market.
State-run Bharat Sanchar Nigam Ltd. is in the process of firming up a global tender for up to 40 million GSM lines and the Indian government has said the eventual winner would have to manufacture a part of that order in India.
Motorola also announced it would launch three low-cost phones in October for the Indian market in an effort to win share from Nokia as the mobile companies scramble for subscribers in rural India.