Robust handset sales in Asia

Robust handset sales in Asia

SINGAPORE (Reuters): Asia appears to have escaped the fall-off
in mobile handset demand in Europe and the United States thanks
to low cellular penetration rates and a huge appetite for new
technology.

Telecom operators said that while regional handset demand may
have eased in line with slowing Asian economies, overall sales
remained relatively robust.

Laurens Bulters, director of operations at Indonesian cellular
operator PT Telkomsel, told Reuters the company had seen
"exponential" sales growth.

"We remain very optimistic about prospects in the Asia-Pacific
due to relatively low penetration rates in countries like
Indonesia, Thailand, Malaysia and Philippines. Asia-Pacific
remains separate from the U.S. and Europe," he said.

The disparity was also due to the fact that infrastructure
spending in developing markets like China was still in its
infancy, said Ted Dean, managing director of BDA China Ltd, a
Beijing-based telecoms consulting firm.

"China's business cycle in mobile communications is not in
sync with the rest of the world. While the rest of the world has
overspent on their networks, China has not hit that point yet."

Even Swedish telecoms equipment maker Ericsson, grappling with
losses from its mobile phone operations, struck a bullish note on
wireless demand in the region.

"We expect Asia-Pacific to be the fastest-growing market in
the coming years," chief executive Kurt Hellstrom said, adding
that the region chalked up 250 million mobile subscribers in 2000
-- a number expected to hit 550 million by 2004.

In the more mature markets of Hong Kong and Singapore, tech-
savvy users choosing to stay connected means there is a ready
appetite for technology upgrades, which in turn drives handset
demand.

"Mobile is a way of life in Hong Kong," said Charles Henshaw,
chief executive of mobile operator Peoples Telephone Co Ltd.
"We've seen tremendous (handset sales) growth in Hong Kong --
nothing of the gloom and doom in Europe."

This demand may have eased of late, but that was largely
because consumers were holding off on their purchases ahead of
the release of the latest technology, Henshaw said.

"There's nothing new in the market right now -- people are
waiting for GPRS and when that is released in the third or fourth
quarter, (handset demand) will take off again," he added.

General Packet Radio Services (GPRS), a 2.5-generation
network, offers high-speed data transmission and is a stepping
stone to faster and more sophisticated third-generation mobile
technology.

Staying connected was also a "basic need" in Singapore, said
Steven Chan, director of product development at the city state's
second-largest mobile operator, MobileOne (Asia).

"We see continued growth in the mobile market in Singapore
from, for example, parents giving their kids cellphones so they
can keep in touch with them," he said.

New technologies involving machine-to-machine communication,
such as using the Short Message Service (SMS) to buy a drink from
a vending machine, would also spur demand, Chan added.

As for Japan, struck by the double whammy of a moribund
domestic economy and high cellular penetration rates of more than
60 percent, strong handset sales were still a reality, said
Japan's largest mobile phone operator, NTT DoCoMo Inc.

"In Japan, penetration rates are already very high but we
still have a lot of demand for new phones because the
technological improvements for handsets are growing very
rapidly," Takeshi Natsuno, executive director of DoCoMo's Gateway
Business Department, told Reuters.