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Mobile Phone Industry Targets The Third World

BARCELONA, Spain — With a saturated market in Western Europe and North America and a user base adopting costly new third-generation features at a seemingly glacial pace, the mobile phone industry is turning to the Third World and asking the heads of developing countries to lift regulatory barriers.

According to Motorola CEO Ed Zander, addressing a forum at the 3GSM World Congress here Wednesday (Feb. 15), mobile phone penetration is a powerful engine for economic growth. He said, “Every time you have ten more phones per 100 people, you have an increase in GDP (gross domestic product) of 0.6 percent.”

Zander’s company is a leader in providing ultra-low cost (less than $40) handsets to poor countries, shipping at a rate of 31,000 phones a day.

He said, "We stand on the brink of a new world where mobile communications will help people overcome poverty and realize their potential." But he said that countries that continue to impose taxes on handsets, and other restrictions on mobile operators, will delay or even deny the economic benefits from “connecting the unconnected.”

Zander struck a theme common to this year’s 3GSM gathering, where thrift has supplanted the race to add handset features and maximize ARPU (average revenue per user). Zander was among several panelists in a session on developing markets who cited the economic virtue of deregulating mobile telephony in countries like Bangladesh, Nigeria, the Philippines, parts of Russia and dozens of other countries that represent the potential of 3 billion new subscribers by 2010.

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