April 5, 2006 4:15 PM PDT

Nokia CEO: Cell phone market still about voice

LAS VEGAS--For all the hype surrounding TV and music downloads on cell phones, at the end of the day the mobile market is still about voice communication, according to Jorma Ollila, Nokia's departing CEO.

Cell phone growth has exploded over the past decade and a half. When Ollila took over as CEO of Nokia in 1992, less than 1 percent of the world's population used cell phones, he said during a keynote speech here at the CTIA Wireless 2006 trade show on Wednesday. Today there are roughly 2.2 billion cell phone users in the world, and that number is expected to grow to 3 billion by the end of 2008.

Credit: Nokia
Jorma Ollila,
CEO, Nokia

Pressure from increased competition has driven down the cost of voice minutes, forcing carriers to focus on new applications, such as mobile TV, music downloads and mobile e-mail, to help boost revenue.

But Ollila, who is considered a key figure in the development of the cell phone market, warned the industry not to lose sight of the fact that voice applications will continue to be dominant on cell phones.

"Mobile voice is still the killer application," he said. "Subscriber growth is still fueled by voice, and voice will be the most valuable form of communication for a long time still. There is still much work to do to improve voice connections and handsets."

Ollila, who is stepping down as Nokia's CEO on June 1 to become a nonexecutive chairman at Royal Dutch Shell, said much of the new growth in the mobile market will come from developing countries in Asia, Africa and Latin America.

"There is rapid growth in the low-income and developing worlds," he said. "We are seeing dual markets emerge. Take India as an example. We are not only bringing mobile communications to people who have never even had access to any telephone, but we are also offering advanced service to more advanced areas like Delhi and Bangalore."

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CTIA: Wired on wireless
Mobile operators, handset makers and network gear specialists are rolling out new products and big plans at CTIA Wireless 2006.

While Ollila said that voice communications will remain the primary application for mobile phones of the future, he didn't discount the importance of new features such as cameras and video players. Many of the phones Nokia is introducing come equipped with camera phones. It is also working on devices that will support DVB-H, a technology that will allow carriers to use multicast to broadcast live video to mobile phones.

Specifically, Ollila mentioned the company's four phones for the North American market, introduced at the CTIA show on Wednesday.

The 6126, which has been built for GSM/EDGE networks, is a slim folding phone with a 1.3-megapixel camera and a digital music player that holds up to 1,000 songs on a memory card. Nokia also launched three CDMA phones, including the 2365i folding handset, the 2865i monoblock phone with an FM radio, and the 6175i, a midpriced folding phone with a 1.3-megapixel camera and a GPS (Global Positioning System) receiver.

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