The number of mobile phone users in China, the world's largest mobile phone market, is expected to double by 2007 to 500 million from around 250 million at present, said George Huang, vice president of Nortel Networks (China) Ltd., a unit of Nortel Networks.

"Four to five million new subscribers are added each month. That's a significant growth and there's no such growth in the world like this for mobile users," Huang told reporters on the sidelines of a 3G World Congress conference in Bangkok recently. He said the penetration rate in China was currently low at around 20 percent and there was substantial room for the Chinese market to grow.

Despite the expected growth in coming years, one of the most challenging tasks for mobile operators in China is how to maintain their average revenue per unit, or ARPU, said Huang. Most of the high-end customers have already subscribed to mobile services while new subscribers are mostly low-end prepaid customers that dragged ARPU down to around US$12 per month currently from US$20 in previous years.

"The key thing is how to drive additional ARPU, that's the main objective of all operators in China right now," said Huang. One possible solution for Chinese phone operators to drive up ARPU is to push ahead for the migration to third-generation (3G) mobile phone services from 2G.