DOMESTIC sales of mobile phones surged 39 percent year on year in the first quarter, boosted by the popularity of low-cost smartphones, subsidies and new services offered by telecommunication carriers, the Ministry of Industry and Information Technology said yesterday.

From January to March 163 million units of handsets were sold, the ministry said, adding that 77 percent were smartphones.

"Technological development has made it possible for everyone to own a low-cost 3G smartphone, especially in emerging markets like China," said Michael Hurlston, senior vice president of Broadcom Corp, a US-based chip designer.

Broadcom, which has developed chips for handsets costing under US$100 each, expects global smartphone sales at 1.3 billion units in 2015, an annual growth of 29 percent.

China Unicom, the country's No. 2 telco, expects a 50-percent annual jump in smartphone sales to 90 million units this year helped by its faster network and subsidized prices, it said yesterday.

China Mobile, the world's biggest telco, hopes to increase demand for new phones by upgrading its network to 4G, which is 20 to 50 times faster than the current 3G standard, according to analysts.