Home > Africa
Home > Stats
Home > Mobile Commerce

May 1 2006

The GSM Association has announced that its emerging markets handset program is exceeding expectations: mobile operators in Bangladesh, China, India, and Russia have already purchased 12 million of its ultra-low cost handsets (ULCH).

But will the initiative reach the rest of the three billion unconnected peoples in emerging markets, asks ABI Research? Under current cost models that is unlikely. The problem is that even at US$30 the ULCH's price is too high for at least a billion of this population. The annual gross per capita income in sub-Saharan Africa is just US$371.

It is unrealistic to expect people there to spend 10% of their annual income on a mobile phone.

So semiconductor vendors, such as Texas Instruments, Freescale, Philips, and Infineon are continuing to reduce the bill-of-materials for ULCH even further, heading towards US$20 and US$15 in the next few years.

But will ULCH markets stall before a low enough price is reached? Alan Varghese, principal analyst, Wireless, at ABI Research doesn't think so.

"We may see trends similar to those for the conventional handset in the developed world. In the early years, it was purchased primarily to transact business; it was only when prices had dropped that handsets penetrated the mass market."


d