One in three mobile phone users has a Nokia

Nokia said it was extending its revenue growth target of 25-35% from 2002 to include 2003, with continued high profitability.

"In the mobile world, the best is yet to come," chairman and chief executive Jorma Ollila said. "The opportunities in the future are enormous as we enter an unprecedented time when mobility, internet, digitised media and other content can be combined and become available to almost anyone, anytime and anywhere."

Shares rise

Nokia said it expected total revenue growth in the first half of 2001 to be at the top end of the 25-35% range.

"Mobile internet service revenue will grow to be bigger than the mobile voice revenue of last year by 2004, so we will see four-fold growth in the service revenue side," president Pekka Ala-Pietila added.

Telecoms shares on Tuesday: The Nokia effect

Nokia +4.72 euros or 9.56% to 54.10 euros Alcatel +6.3 euros or 10.43% to 66.70 euros Ericsson +8 kroner or 6.72% to 127.50 kroner Motorola +$1.69 or 9.18% to $20.06

Nokia shares climbed smartly following the forecasts, putting on 4.72 euros or 9.56% to 54.10 euros in late afternoon trading in Helsinki.

"This is very positive news... The market reaction has been exactly what it should have been," one Helsinki-based broker said.

International rivals Alcatel, Ericsson and Motorola also made substantial gains.

Rivals struggle

Nokia had reported strong third quarter earnings but the shares have had a rocky ride in 2000, falling more than 20% one day in July when the company warned investors that results might disappoint.

In general though, the company has performed better than most of its rivals, with the shares touching a lifetime high of 65 euros on 20 June.

Ericsson and the US company Motorola are among those whose mobile handset divisions are struggling, with the Swedish firm saying its handset unit was likely to rack up losses of about $1.6bn this year.

Telecoms investors have also been concerned about a possible slowing of growth in the handset market and the cost of providing third-generation mobile phone services.

One billion subscribers

Nokia, which made two handsets a second last year, also said it was targeting annual cost savings of one billion euros by 2003, to be achieved through increasing its focus on mobile e-business.

The company said it believed it now had more than 30% of the mobile phone market - close to twice the market share of its nearest competitor.

According to recent market research reports, Motorola has about 16% of the market and Ericsson 11%.

Nokia also improved its estimate for future subscriber growth, saying it might reach one billion subscribers worldwide in the first half of 2002 rather than by the end of that year as previously expected.

It said it expected there would be more internet-connected mobile phones than personal computers by 2002.

The number of mobile phone users worldwide would rise to 700 million by the end of 2000, Nokia said.