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China chases mobile phone crown

A report released by Gartner has revealed that China is on target to overtake the US to become the country with the largest...

A report released by Gartner has revealed that China is on target to overtake the US to become the country with the largest mobile phone subscriber base in the world by the second half of 2002.

Gartner's report directly contradicts figures from China's Ministry of Information Industry (MII), which earlier this month claimed that China already had more mobile phone subscribers than the US.

Gartner said that the MII figures did not take "inactive" or pre-paid users in China into consideration, while also ignoring the 1% of inactive US subscribers.

However, the report showed that China would continue to lag behind the US in terms of mobile phone revenue: Chinese users spend an average $223 (£153) per year, compared with $615 for US subscribers.

The growth of the Chinese cellular market has been driven by low-priced mobile handsets, with simple units selling for less than $121. The availability of second-hand mobile phones has also enabled marginal subscribers to obtain mobile phone services, increasing subscription rates in the process.

Looking ahead, another revenue generator for China's mobile service providers could be the data market, as the short message service (SMS) becomes more prevalent. But while mobile data usage will increase in popularity, voice will still constitute over 70% of mobile revenue in China, the report found.

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