By Wang Xing and Li Weitao (China Daily)
Updated: 2007-10-09 09:43

When China's largest electronic retailer Gome decided to start selling mobile phones in 2002, it didn't possibly expect the handsets to contribute a chunk of the company's overall revenue five years later.

But having seen its mobile phone sales revenue surge from 5 million yuan in 2002 to 9.8 billion yuan in 2006, the company now wants to boost the revenue even further.

"We are going to build more stores selling mobile phones and plan to boost our mobile phone sales revenue to 19.8 billion yuan this year," said Wang Aijun, deputy administrator of Gome's telecommunication business, in an industry forum recently.

Gome's fast-growing mobile phone retail business is a reflection of the boom in China's information industry.

According to the National Bureau of Statistics (NBS), the number of mobile users reached 461 million by the end of last year, with an average annual growth rate of 22.3 percent since 2002.

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Experts predict that by 2010, there will be another 160 million new mobile subscribers.

"China is an interesting market in regard to mobile devices," Olli-Pekka Kallasvuo, CEO of Nokia, had said in an earlier interview with China Daily. "On one hand China is an emerging market because there is a lot of potential for new penetration. But then if you look at the market, it is also very sophisticated regarding devices and what people want to buy in the marketplace."

Last year, the Finnish telecom titan sold 51 million mobile phones in China, an increase of 57 percent over the previous year.

Manufactures and retailers are not the only beneficiaries of the increasing number of telephone users. The enlarged user pool and fiercer competition have led telephone carriers such as China Mobile and China Telecom to reduce cost of voice services and turn to new applications that are more profitable.

In the past five years, Chinese people have spent 3.2 times more in speaking over mobile phone than they did in 2002. Long-distance calls also increased 150 percent, according to government figures.

At the same time, short message sending volume has seen an average annual growth rate of 64.7 percent since 2002 and hit 42.95 billion last year (about 30 per person per year).

The development of ringtones, wallpaper downloading and WAP connections has also led an array of Chinese companies such as Linktone, Kongzhong and Hurray! to list on NASDAQ.

According to the NBS, the turnover of China's value-added services reached 108.8 billion yuan in 2006, contributing over half the revenue increase of telecom carriers in China.

The growth of telephone users has been accompanied by the rise in the number of Internet users. By the end of last year, China had 137 million Internet users, an increase of 130 percent over 2002, according to China Internet Networks Information Center.