Worldwide mobile cellular subscribers to reach 4 billion mark late 2008

ITU estimates over 60 per cent penetration driven mainly by BRIC economies

Geneva, 25 September 2008 — ITU Secretary-General Hamadoun Touré announced in New York that worldwide mobile cellular subscribers are likely to reach the 4 billion mark before the end of this year.

Dr Touré was speaking at the high-level events on the Millennium Development Goals (MDGs) in New York, where he also participated in UN Private Sector Forums addressing the global food crisis and the role of technological innovation in meeting the MDGs.

The MDGs were adopted following the United Nations Millennium Declaration by UN Member states in 2000, representing an international commitment to eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality, reduce child mortality, improve maternal health, combat epidemics such as HIV/AIDS and malaria, ensure environmental sustainability, and develop a global partnership for development that would include making available the benefits of information and communication technologies. ICTs have been recognized as an important tool to achieve the MDGs.

Since the turn of the century, the growth of mobile cellular subscribers has been impressive, with year-on-year growth averaging 24 per cent between 2000 and 2008. While in 2000, mobile penetration stood at only 12 per cent, it surpassed the 50 per cent mark by early 2008. It is estimated to reach about 61 per cent by the end of 2008.

"The fact that 4 billion subscribers have been registered worldwide indicates that it is technically feasible to connect the world to the benefits of ICT and that it is a viable business opportunity," said Dr Touré. "Clearly, ICTs have the potential to act as catalysts to achieve the 2015 targets of the MDGs."

While the data shows impressive growth, ITU stresses that the figures need to be carefully interpreted. Although in theory a 61 per cent penetration rate suggests that at least every second person could be using a mobile phone, this is not necessarily the case. In fact, the statistics reflect the number of subscriptions, not persons.
Double counting takes place when people have multiple subscriptions. Also, operators’ methods for counting active prepaid subscribers vary and often inflate the actual number of people that use a mobile phone.

On the other hand, some subscribers, particularly in developing countries, share their mobile phone with others. This has often been cited as the success story of Grameen Phone in rural Bangladesh, for instance.

ITU further highlights that despite high growth rates in the mobile sector, major differences in mobile penetration rates remain between regions and within countries.
The impressive growth in the number of mobile cellular subscribers is mainly due to developments in some of the world’s largest markets. The BRIC economies of Brazil, Russia, India and China are expected to have an increasingly important impact in terms of population, resources and global GDP share. These economies alone are expected to account for over 1.3 billion mobile subscribers by the end of 2008.

China surpassed the 600 million mark by mid-2008, representing by far the world’s largest mobile market. India had some 296 million mobile subscribers by end July 2008 but with a relatively low penetration rate of about 20 per cent, India offers great potential for growth. Market liberalization has played a key role in spreading mobile telephony by driving competition and bringing down prices. India’s mobile operators increasingly compete for low-income customers and Average-Revenue-Per-User in India has reached around USD 7, one of the lowest in the world.

ITU recently published two regional reports for Africa and Asia, which indicate how mobile telephony is changing peoples’ lives. Apart from providing communication services to previously unconnected areas, mobile applications have opened the doors to innovations such as m-commerce to access pricing information for rural farmers and the use of mobile phones to pay for goods and services. While mobile broadband subscribers remain concentrated in the developed world, a number of developing countries, including Indonesia, the Maldives, the Philippines and Sri Lanka in Asia-Pacific have launched 3G networks.

Broadband uptake enables a range of socially desirable and valuable online services, specifically targeting the MDGs in areas such as e-government, e-education and e-health. The use of broadband technologies can help overcome many of the basic development challenges faced by developing countries.