Nokia, the world's leading mobile phone supplier, sees China's vast less-developed regions as a major driving force behind its future growth, a company executive said.

David Ho, president of Nokia (China) Investment Co Ltd, said Nokia will "make substantial efforts" to introduce low-price mobile phones to China to tap the less-developed markets.

"Mobile phone subscriber growth in big cities is continuing to slow since market penetration is already high," said Ho.

"However, third and fourth-tier cities are providing big opportunities for mobile operators since they are signing on a growing number of new subscribers."

A top priority for Nokia now is to further strengthen the coverage of its sales network in small cities, the president said.

China now has more than 370 million mobile phone subscribers and the growth in this market has been strong.

However, now the market is growing mainly in small cities and rural regions.

Ho forecast Chinese mobile operators will recruit more than 200 million subscribers in the coming three to four years.

"By September 2008, we expect that the total number of Chinese mobile phone users will hit 650 million," he said.

Most of the new users will be those from small cities and rural regions, who will buy handsets for the first time.

The small cities, which have a potentially vast market for mobile phone subscriber growth, are increasingly becoming a major battlefield for mobile phone manufacturers.

A number of makers including Nokia and Motorola are ready to introduce the so-called ultra low cost handsets (ULCH) to China, which could be sold for as little as US$30.

Such phones offer only basic functions like call-making, messaging and black and white screens.

Nokia will also aggressively introduce very high-end mobile phones to woo corporate users, said Hera Siu, general manager of Nokia Capitel Telecommunications Ltd, Nokia's joint venture in China.

The company plans to manufacture its flagship mobile phone models Nokia 9300 and 9500 which will enable users to access the Wi-Fi, or WLAN.

"We are working on the Chinese version of operating systems for Nokia 9300 and Nokia 9500 and plan to start manufacturing them next year," Siu said.

"We believe in the future most high-end phones especially the 3G mobile phones will have the Wi-Fi function."

Since producing its first mobile phone in China in January 1996, Nokia has manufactured a total of 200 million units in the country, half of which have been exported.

The firm is now the country's largest mobile phone manufacturer and exporter.

"Starting from 2005, our exports already exceeded those sold at home," said Siu.