UN Says Wireless Uptake Has Surpassed Land Lines

The number of mobile phone subscribers worldwide has doubled since 2000 to nearly 1.5 billion, with cell phone adoption growing faster than land line telephone service and Internet usage, according to a new report from the United Nations.

The International Telecommunication Union (ITU), a wing of the UN, also said in its annual report that 2004 will likely mark the first year ever that mobile phone service will generate more revenue than land-line telecommunications.

The report said that massive growth in China, India and Eastern Europe, especially Russia, is behind the wireless boom.

In fact, developing nations now provide half of all mobile phone subscribers, making up 56 percent of the total versus 44 percent in nations with established economies. Almost 80 percent of the cellular growth worldwide since 2000 has taken place in developing countries.

Susan Schorr, one of the authors of the report, said the changes are significant since landline telephone service sustained the growth of the telecommunications industry for more than 100 years.

Third World Calling

“Virtually all the global growth in the telecoms service sector over the last decade has come from the mobile sector, broadband and other data services,” Schorr said. “The demographics are in place for that trend to continue for some time,” she said.

The report calls for a light touch from regulators in various countries.

“Our job as regulators is to ensure that we are creating a climate that is conducive to these new technologies and allows them to deliver services to our citizens,” U.S. Federal Communication Commission member Kathleen Abernathy said. “The goal should be to maximize the potential for everyone to benefit from all of these new technologies.”

The report says that China now boasts 310 million wireless users, giving the country more cell phone users than the U.S. has people.

Other emerging markets have smaller bases but even faster growth. In India, for instance, the growth rate for 2004 is pegged at around 25 percent, giving the country 44.5 million subscribers. Russia now has about 60 million subscribers, up from 36.5 million a year ago.

Internet Users

The growing subscriber base helped balloon wireless carriers into a US$414 billion business last year, a 1,000 percent increase since 1993. Over the same period, the telecommunications sector as a whole grew by an average of 8.8 percent to reach $1.1 trillion.

The report also found that the number of Internet users has nearly doubled since 2000 as well, growing to 700 million this year, though most of that market’s growth came in the late 1990s. The ITU said Internet adoption could pick up pace again as wireless technologies develop more robust ways to access the Web without wires.

“Connecting people to the Web without wires is probably the most effective way to bridge the technology gap in the developing world,” Gartner analyst Ben Wood said.

While scores of companies went bankrupt trying to bring high-speed fiber lines to remote areas, the economics of expanding mobile coverage is much more sustainable, he added.