Fono, the Dubai-headquartered regional retail chain for mobile phones and accessories, is in talks with possible partners to penetrate new markets, said a top company official.

Hannu Ruoppa, managing director of Fono, one of the largest mobile phone retailers in the Gulf, said: "We are in talks with a number of possible partners to penetrate the North African, Iraqi, Syrian, Iranian and Indian markets.

"Though it will take some time for the new Iraqi authorities to set up the telecom infrastructure, we are holding discussions with parties as it is going to be a vital market for us.

"We are also looking at Iran and Syrian markets quite closely to tap these important markets. Currently, we are witnessing a solid growth in the Kuwaiti and Omani markets where we are the leading retailer.

"In the UAE, we are one of the top three retailers," he added.

Ruoppa said his company is looking at partnership operations in other markets, rather than going for a fully-owned branch operation.

At present there are 23.7 million GSM service subscribers in the Middle East, including 2.3 million in the UAE, according to market sources.

The GSM subscription in the Middle East is expected to reach 45.4 million by 2005, according to Madar Research and GSM Association.

He said liberalisation in the Gulf's telecom sector will further spur growth in the retail sales of mobile phones.

"Bahrain has recently decided to give licence to a second GSM service provider. Some other countries might allow a second operator, which will expand the subscription base and help the retail sales of mobile phones to grow further".

Officials in the sector predict that a price war might bring down the prices of mobile phones further.

Many bulk importers are dumping products in the local market to get rid of dead stocks of old models. Some of these are sold at throwaway prices.

As the mobile phone market expands, new models are also offering wider choices to the consumers.

South Korean giant LG Electronics has formally introduced its colour mobile phone range in the UAE. It has also signed up UAE's football icon, Adnan Al Talyani, as brand ambassador for its new colour mobile phone, G7020.

The new model comes with a striking 65,000 colour LCD and other key features such as 40 polyphonic melody, EMS, GPRS and infrared capabilities.

"LG is planning to introduce four new models in the market. In a few weeks' time, it is going to introduce a camera phone with a rotating camera, like the one launched by Samsung two months ago," said a source.