Telecom analyst firm Wireless Intelligence recently announced that the number of mobile subscribers worldwide had exceeded 2 billion. This is a major landmark for the industry: it was only three years ago that the number of subscribers was 1 billion. This rate of increase makes mobile services one of the fastest growing technologies ever. According to fellow analyst firm Ovum, the industry will reach the 3 billion mark by 2010. But where will that billion come from?

Counting 1.5 billion subscribers, GSM is a mature technology in several markets, where mobile services have been commercially available for many years.  Even in these markets growth is still apparent. Many users are signing up for second and third subscriptions for data or personal use and operators are successfully targeting new niche markets, for example, the under-14 age group.

However, the strongest growth is in emerging markets in Asia, eastern Europe, Latin America and Africa. Countries such as Brazil, Russia, India and China have seen subscriber growth rates of 60 percent per year or more. The Russian market almost doubled in 2004 while the Chinese market now has more than 400 million mobile subscribers. These markets have dynamically changing demographics, with a rapidly growing middle class.

Liberalization of the telecom sector in emerging markets has also fueled dramatic growth. Access fees have been reduced in India and China where expansion into rural areas has resulted in mobile services becoming more readily available to lower-income segments. These developments, together with availability of low-cost handsets are expected to further drive subscriber and services growth.

Worldwide, voice is still the primary driver of revenue while profits are being driven by increased volumes and economies of scale. With the global penetration rate of mobile services at only 28 percent, there are still about 4 billion potential new mobile users.

Ericsson has designed a new business model for emerging markets with the goal of promoting socio-economic growth through affordable mobile communications. This new model targets communication for all and primarily addresses the needs of rural, low-income market segments. The business model focuses on improving the quality of life for consumers and aims to achieve sustainable growth in rural areas and a spreading of investment risk for the involved stakeholders. The solutions include components to reduce total cost of ownership and to lower the entry hurdles for operators, all customized to meet different needs in different countries.