China heads toward 500 million cell phone subscribers

IDG News Service - The number of mobile phone subscribers in China is likely to hit 500 million before the end of June, according to government statistics.

China had 487.4 million mobile phone subscribers at the end of April, an increase of 6.7 million over March, China's Ministry of Information Industry said on its Web site (in Chinese). The country added 6.8 million new subscribers in February.

At this rate, China will likely cross the 500-million subscriber mark sometime during late June.

Since construction of China's first mobile network began in 1987, mobile telephony has transformed personal communication in China. As recently as 10 years ago, China had just 10 million mobile subscribers, and many urban residents still relied on public phones for making calls and pagers to make sure they didn't miss one.

By 2001, the number of mobile phone subscribers had exploded, along with China's growing economy, and 100 million Chinese were carrying phones with them. In recent years, growth has been faster than ever, with mobile phones becoming ingrained in the daily lives of urban Chinese.

Jason Yin, managing director of In-Stat China, is typical of many urban Chinese professionals. "Even when I'm at home, I prefer to use my mobile phone. The signal is very good and costs are competitive, and I have all of my contacts inside," he said. "It's just convenient."

But even with 500 million mobile phone subscribers, most Chinese still don't own mobile phones. That figure represents a penetration rate of roughly 38%, given China's population of 1.3 billion, and is certain to keep growing over time.

Lower service costs will help drive this growth, Yin said. Chinese operators have dropped bidirectional calling charges, which means users no longer pay for calls they receive on their cell phones. And discussions are under way to eliminate roaming charges within China.

"It's still under discussion, but I think it will be realized soon," Yin said.