In 2007, the number of GSM subscribers around the world is set to increase by 40 million per month, adding up to almost half a billion new users by the end of the year, the GSM Association (GSMA) says. To meet this demand more than one billion mobile phones and terminals are expected to be sold.

Growth is primarily being driven by new network deployments and capacity expansions in high-growth markets such as Asia and Africa, while more than 10 million new subscribers are being added every month across China and India.

Ulf Ewaldsson, head of Product Area Radio at Ericsson, says: "The fast expansion occurring in high-growth markets shows no sign of slowing down. In fact we expect 2007 to be the fifth record year in a row for deliveries. In India alone, Ericsson is currently installing a new GSM base station every 15 minutes and every month more than 6 million new subscriptions are taken out. In April, 121 million of the 1.1 billion Indians had a mobile phone."

The economies of scale offered by mature GSM technology is one reason behind today's expansion in high-growth markets, Ewaldsson says. "We are now seeing the effects of scale in several dimensions. GSM technology has become affordable to many more people and terminals are cheaper, however there are still many issues to address before all the needs of these new subscribers can be met."

In markets where a substantial number of new subscribers earn about USD 2 per day, the cost of a phone call is crucial. "If we can reduce operating costs, operators may be able to introduce fixed rates for their customers, giving them the opportunity to make cheaper calls. One way of doing this is to offer networks with lowest total cost of ownership, such as those enabled with the Ericsson Coverage Expansion solution that offers cheap coverage with greater capacity."

But GSM offers more than cost efficiencies; it provides secure migration to 3G systems - a fact that has helped secure the technology's position in both high-growth and established markets.

Marie Westrin, head of Development Unit Radio at Ericsson, says: "3G technologies and GSM have merged and today we talk about 3GSM. Data speeds have increased through improvements and complementing technologies such as EDGE, giving GSM the capacity to handle services for the third generation of mobile telephony, for example TV.

"The seamlessness between EDGE (GSM) and HSPA (WCDMA) offers superior user experiences. We offer end users the freedom of IP service continuity - enabling users to reach services for both leisure and work. The increasingly popular 3GSM solutions will bring internet to new levels."

Operators that have introduced flat-rate tariffs for their mobile broadband offerings are experiencing a tremendous growth in data traffic.

"The internet just went mobile," Westrin says. "It is happening right now on a broad scale. But much more is to come. Mobile systems offer the most natural way of communicating and 3GSM is the best choice as it covers 85 percent of the mobile user base."