Finnish telecom titan Nokia said yesterday that its net sales in China surged by 39 percent to 5.3 billion euros last year, helped by strong mobile phone sales in rural regions.

The firm, which manufactures both mobile phones and telecom equipment, saw exports reach 4.8 billion euros in 2006, an increase of 67 percent compared to the previous year.

Such strong growth in the face of intensifying local competition reinforces Nokia's position as the world's top mobile phone maker and a leading provider of telecom infrastructure, said David Ho, president of Nokia (China) Investment Co Ltd.

"Nokia has maintained robust growth in China since it became our largest single country market in 2005," said Ho.

Nokia sold 51 million mobile phones in China last year, an increase of 57 percent over the previous year, and at the same time its global handset sales grew 19 percent.

Nokia now controls more than 35 percent of the domestic market, the largest share for any mobile phone maker, said Colin Giles, senior vice-president in charge of Nokia's customer and marketing operations in greater China.

In 2005, the firm held about 30 percent share of the market. Gains have been mainly due to Nokia's push into the rural market, where many people buy handsets for the first time.

By December China had 461 million mobile phone subscribers, adding 68 million new subscribers over 2005, according to the Ministry of Information Industry.

Most of the newly added subscribers were from rural areas, as the mobile phone market in big cities is nearing saturation point.

Cellular operators China Mobile and China Unicom have recently stepped up expansion into rural areas, which has helped boost Nokia's handset sales.

Giles noted the country's replacement handset market also remains strong. Last year Nokia sold 16 million multimedia devices globally with advanced features such as e-mail capacity, Internet access, high-quality digital cameras and music players. China was the fastest-growing market for Nokia's multimedia division, said Giles.

Giles forecast replacement handsets could account for 60 percent of the total market in 2007 and the figure could hit 80 percent in China by 2010.

The whole market will see a "double-digit growth this year, driven by increasing demands in the rural market", he said.

Last month, Nokia, when announcing its financial results, forecast that the global handset market would grow up to 10 percent in 2007.

(China Daily February 9, 2007)