MOBILE telephone use grew 64.8 per cent in Hong Kong in the year to June, according to newly released figures. By the end of June, there were 577,067 mobile telephones in use in the territory, up 64.8 per cent over the same time a year earlier and 31.6 per cent up on the end of December last year. The spectacular growth is part of an explosion of mobile telephones in Asia which is only just beginning. Mark Newman, editor of Global Mobile, the Paris-based industry newsletter which produced the figures, predicted the period of growth was just beginning. 'The number of phones in Asia seems to be doubling every year,' he said. 'There are two separate phenomenons going on. In established markets such as Japan, competition has come along and with proper marketing sales are taking off. 'In the new markets, new players are being introduced and overall growth is shooting ahead.' There are estimated to be more than 15.63 million subscribers in 18 states in Asia, a growth of 96.4 per cent, over the year, or 7.67 million customers. Mr Newman said the introduction of new players, notably in Hong Kong, China, Malaysia and India, was likely to help drive growth even further. 'Malaysia has three operators and that is about to become six but penetration is still only four per cent there,' he said. In Hong Kong, growth had come from extra capacity released as a result of the introduction of the GSM digital standard. 'I don't think GSM released a new customer base, I think it freed capacity,' Mr Newman said. 'The new customers will come with PCS [personal communications system] services which will be launched soon. 'PCS operators won't get the early customers, who pay the most, so they will have to offer a higher volume/lower margin service. 'There is talk of offering free handsets and connection to attract customers.' Free sets and connection are used extensively in mature markets with operators subsidising the telephone giveaways by marginally increasing monthly charges. 'There are several groups who are going to benefit from the growth,' Mr Newman said. Operators may face intense competition initially because countries may have issued more licences than there is room for in the market, but Mr Newman expected gradual consolidation by merger in those circumstances rather than bankruptcy. 'You might see some very high company valuations,' he said. Other groups which could benefit were consumer electronics firms and a new group of small players which could spring up and buy call capacity in bulk from service providers and sell it to the public.