The mobile industry has driven the wholesale cost of mobile phones to below US$ 30 as part of the GSM Association (GSMA) programme to make mobile telephony affordable for people in developing countries. This marks the second phase of the programme to "connect the unconnected" and GSMA expects to order six million of these low-cost handsets from Motorola.
"To get below US$ 30 per handset is a milestone achievement," said Craig Ehrlich, Chairman of the GSMA, the global trade association for the world's GSM mobile operators. "Today's news cements the formation of a whole new market segment for the mobile industry and will bring the benefits of mobile communications to a huge swathe of people in developing countries."
At the 3GSM World Congress in Singapore, Rob Conway, Chief Executive and board member of the GSMA, announced today that Motorola has been selected to supply the phase-two handset. "Motorola won thanks to a combination of a portfolio starting from sub-US$30, together with other key factors such as after-sales support, local service, brand presence and a choice of low-cost handset models including an exclusive product, the C113a for this programme," said Conway.
The 10 operators supporting the second phase of the GSMA's Emerging Market Handset programme expect to order about 6 million of these low-cost handsets from Motorola. The GSMA programme, which is chaired by Erik Aas, the Chief Executive of Grameen Phone Ltd. of Bangladesh, is supported by some of the leading operators in emerging markets - AIS, Bharti, BPL, Globe Telecom, Hutchison Essar, IDEA Cellular, MTN Group, Orascom Telecom, Telenor and Vodacom.
"The startup price is the single most important criteria for connecting the unconnected in emerging markets. The GSMA Emerging Market Handset initiative is a major step towards reducing the startup price, and will fuel significant economic growth, as well as major social changes, when so many new people can communicate directly from their home or on the move, " says Erik Aas, Chairman of the GSMA programme and CEO of GrameenPhone.
Motorola submitted two handsets in its proposal - the C113 and the C113a, which were specifically designed for the Emerging Market Handset programme. The C113a offers talk times of up to 450 minutes and up to 330 hours of standby, reducing the need for frequent recharging. The handsets will be available early in 2006.
The Emerging Market Handset programme forms a key part of the GSMA's "Connecting the Unconnected" initiative that has attracted widespread industry and government recognition.
" 'Connecting the unconnected' is a rallying cry across Motorola," said Ron Garriques, president of Motorola Mobile Devices. "In emerging markets, consumers and operators want mobiles that meet specific performance requirements while exceeding expectations for quality, reliability and design. Additionally, they want all of this at a value price. I'm proud that the GSMA has once again chosen Motorola as its partner for this important opportunity to fuel economic development and growth."
Motorola also won phase one of the programme with its family of handsets based on the C11X platform. During this first phase, EMH handsets were supplied into 17 countries through 10 participating operators. These countries included India, South Africa, Nigeria, DRC, Egypt, Algeria, Tunisia, Bangladesh, Turkey, Thailand, Philippines, Malaysia, Indonesia, Pakistan, Yemen, Sri Lanka and Kenya. These markets have a total population of about 1.8 billion.
Analysts say these handsets have allowed far more people to take advantage of mobile communications. For example, the arrival of the Motorola C115 in India helped boost Indian GSM operators' monthly net customer additions by one third to 1.6 million in June, according to a report by Lehman Brothers.
The GSMA expects the cost of handsets to continue to fall as chipmakers and other component suppliers increasingly focus on this potentially huge market.
The GSMA also highly commended a low-cost handset proposal from TCL & Alcatel Mobile Phones Ltd. "T&A Mobile phones is very honoured to have its efforts to serve emerging markets recognized by the GSM Association," said TCL & Alcatel CEO Fei Liu. "Building on our key company values of flexibility, innovation and entrepreneurship, we are committed to delivering high-value handsets tailored to local requirements under the Alcatel brand."
The GSMA is also looking at what can be done to remove other barriers preventing more people in developing countries from using mobile phones, such as taxes on handsets and services. The Association has just published a report revealing that punitive tax levels in some developing countries are pushing up the price of handsets and mobile services beyond the means of many people.
"We are strongly committed to offering affordable mobile services to as many people as possible, and the ultra low-cost handset initiative directly addresses the issue of providing effective mobile communication in emerging markets," said Arve Johansen, Senior Executive Vice President of Telenor's international mobile operations.