Cellular phones grow by billions

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GENEVA -- Within the next two years, statistics show, nearly half of the 6.5 billion people living on planet Earth will be using cellular telephones.

Boosted by robust growth in developing countries, the number of cell-phone subscribers worldwide is expected to reach 3 billion by the end of 2008, up from 2.1 billion in 2005, according to the Geneva-based International Telecommunication Union (ITU).

Much of this growth is in emerging economies such as Brazil, China, India and Russia, said Tim Kelly, head of the strategy and policy unit at the ITU.

His conclusions are spelled out in a joint study with the United Nations titled "World Information Society Report, 2006."

Explosive growth also has been recorded in Southeast Asian countries such as Thailand and the Philippines.

The report, which draws on data from 180 countries, said the number of cell-phone subscribers in China at the end of last year was 393.4 million, up sharply from 85.2 million in 2000.

In Brazil, the number of subscribers last year reached 86.2 million, up from 23.1 million five years earlier. In India, the number of subscribers reached 76 million, compared with 3.5 million in 2000.

The spike was even more impressive in Russia, which reached 120 million cell-phone subscribers last year from 3.2 million five years earlier, or equal to 83.6 subscribers per 100 inhabitants.

Despite the large growth rates, there is room for further expansion in many of these emerging markets. The number of cell-phone subscribers equals 6.9 per 100 inhabitants in India, 29.9 per 100 in China and 46.2 per 100 in Brazil.

Mr. Kelly said Africa is experiencing an amazing growth rate, showing how rapid technological advances are allowing developing nations to bypass the costly installation of fixed-line networks and leap to cutting-edge telecommunications and information systems.

However, the report said the digital divide remains wide for Africa's poorest countries, where access to the Internet and other information technologies remains scarce.

Another U.N. report concludes that a person in a country with an annual per capita income of more than $9,386 is more than 22 times more likely to use the Internet than someone living in a country with a per-capita income of no more than $765.

"Internet affordability is over 150 times greater in a high-income than a low-income country," the report said.

Supachai Panitchpakdi, secretary-general of the U.N. Conference on Trade and Development, said that increased private-sector participation, greater competition and more effective regulation have helped reduce the divide in certain areas.

A 1997 World Trade Organization accord helped sweep away barriers to telecommunications, which had been dominated by monopolies in most countries for more than a century.

Increased international competition also has held down prices and increased investment flows.

Between 2003 and 2005, Mr. Kelly said, prices declined by 40 percent for broadband, 20 percent for cell-phone services and 25 percent for dial-up services.

He said prices for mobile telephony are still much higher than fixed-line rates but decreases will prevail as the market saturates and growth slows.