1. 2005 /

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Handsets for the next billion

According to the GSM Association, roughly 80 percent of the world's population lives within range of wireless coverage though only a quarter of them use mobile services. A major stumbling block to getting the remaining 75 percent on board is handset prices, particularly in emerging markets.

September 07, 2005

Africa is the fastest growing mobile phone market with an average increase in subscribers of 58 percent a year since 1999. Because traditional telephony services have been limited mainly to urban areas, the introduction of mobile networks across the continent has brought telephone services to where none previously existed. But the price of handsets has kept many potential consumers from signing up.


Used handsets can be had for less than USD 50 in Africa, but this is still prohibitively expensive for the majority of Africans who live on less than USD 2 a day. Chip makers such as Intel, Qualcomm and Texas Instruments have recently developed handset chips that are cheaper to manufacture and require less energy, allowing vendors to sell basic GSM or CDMA phones for as much as 30 percent less than at present.


Market watchers believe a USD 30 mobile handset will be available soon. The GSM Association, which promotes GSM technology and operators worldwide, has started the Emerging Market Handset Program to bridge the digital divide.


Many developed countries are approaching mobile market saturation, and the focus for operators and handset manufacturers has been on upgrading services and technology to 3G. But in emerging markets, there is still a huge consumer base that has yet to enter the mobile arena.


India, for example, has 58 million mobile subscribers and expects to add another 100 million in the next two years. Market analysts believe that in emerging markets those who can afford mobile handsets already have them, and it is the large segment of the population without the means to buy the current handsets that offer the greatest potential for growth.


Many operators in Africa, Asia, the Middle East and Latin America already offer affordable prepaid or package services and are working with the GSM Association and handset manufactures to develop basic handsets for their untapped markets.


With the introduction of less expensive mobile handsets, consumers in emerging markets will reap the benefits of quick, reliable, and inexpensive communications to friends, family and markets, and operators can look forward to continued growth.

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