Cell phone use surges in China

More than 300 million cell phones will be ringing in China by the end of the year--but there's still room for the market to grow, according to a government agency.

The country's Ministry of Information Industry, an agency that promotes the information technology industry, said that by the end of 2004, about 300 million people in China, or 24.5 percent of the population, will tote cell phones. Currently, around 295 million Chinese have phones. Approximately 2.7 million became cellular subscribers in the first four months of the year.

China has been the world's largest cell phone market for a number of years and a driving force behind revenue for Motorola, Samsung and other exporters.

In recent months, the Chinese government has tried to slow the growth of the economy. But even with the slowdown, the cell phone market may continue to expand because of the country's huge population, which is now estimated to be 1.2 billion.

In Europe, about 60 percent to 70 percent of the population uses cell phones, while in the United States the penetration rate is close to 50 percent. South Korea and Singapore have penetration rates of about 60 percent and 70 percent, respectively. In Taiwan, cell phones exceed people, as many carry more than one phone for personal or business use.

Still, companies will have to adjust their marketing and pricing to reach the rest of the population. Current cell phone users are mostly clustered around booming urban centers like Shanghai.

Wang Dan of ZDNet China reported from Beijing.