Ericsson: Cheap phones mean 4.5 billion users

The CEO of telecoms giant Ericsson is betting on more than a billion new mobile subscribers signing up before the decade is out.

Carl-Henric Svanberg told delegates at the company's capital markets day he predicts the number of mobile users will rise to 4.5 billion by 2010 - an increase of around 1.5 billion on the current level.

He said: "We are in exciting and also dynamic times in telecom. We have subscriber growth that is stronger than I think we ever anticipated."

Svanberg attributed the continued stellar growth to increased cost efficiency in telecoms kit, better economies of scale as more and more subscribers join the network and the ongoing reduction in handset prices, particularly the arrival of phones pitched between $25 and $30.

The Ericsson head also believes mobile network traffic will increase tenfold by 2012. "We are just in the beginning of a new era... it's all about multimedia, it's all about what we can do beyond talking to each other," he said.

Svanberg said he believes the deployment of the HSPA mobile standard - also known as 3.5G - will boost mobile data traffic by making consuming data through phones, particularly music, data and video, as fast as many people had hoped it would be when 3G networks were originally deployed some years ago.