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China to Outpace U.S. in Cell Phone Use
China is expected to surpass the United States as the world's largest cellular phone market this month, according to a report released yesterday by the State Ministry of Information Industry.

The world's most-populous nation was home to 117 million mobile phone owners at the end of June, up 31 million from the end of last year, according to the semiannual analysis.

In June alone, the number jumped by 6 million.

The United States currently has about 118.7 million mobile phone users, according to the Cellular Telecommunications and Internet Association. But it has added only about 3 million since May 25.

"The growth rate among China's mobile users slowed down a little compared with last year, but it still exceeded expectations," said Wang Zhaniang, an analyst at Guotai Jun'an Securities.

China's mobile phone customers almost doubled in 2000 to 86 million. The ministry is forecasting an increase of 60 million this year, Wang said.

"The six-month figure beat our prediction that China would have 116 million mobile phone subscribers by the end of June," said the ministry statement.

Today, nine out of every 100 people in China use a mobile phone, a rise of 2.5 percent from the end of last year, according to Xinhua news agency.

China's telecommunications operators realized total revenue of 166.57 billion yuan (US$20 billion) in the first half of the year, rising 14.7 percent from the same period last year.

"The policy of lowering and finally removing the government's fixed-line telephone installation fee and mobile phone initiation charges has greatly stimulated market demand for telecommunications services," Wang said.

China's average cost of installing a telephone was lowered from around 700 yuan to about 180 yuan at the end of June. Two days after government charges were removed entirely on July 1, China Telecom's Shanghai branch received 9,000 installation applications, three times the normal level.

The ministry report noted there were 164 million users of fixed-line phones at the end of June, up more than 20 million since the end of last year.

"The popularization of prepaid service also helped in the revenue growth," Wang added.

Prepaid telephone service has attracted 36.8 percent of new mobile phone users this year.

As the only company that is allowed to manage both fixed-line and mobile services, China United Telecommunications Group experienced the most dramatic revenue growth during the past six months, up 57.4 percent to 15.96 billion yuan.

The nation's biggest fixed-line phone company, China Telecommunications Corp, generated 87 billion yuan in sales, increasing 6.4 percent from the former period.

China Mobile Communications Corp, China's largest cellular phone service provider, achieved sales growth of 16.4 percent and generated 62.71 billion yuan.

(Eastday.com 07/19/2001)

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