SINGAPORE-The GSM Association Tuesday said it will begin offering handsets for less than $30 as the second phase of its program to bring affordable handsets to emerging markets.
Additionally, the GSM Association awarded the second-phase sole-source contract for the program to Motorola Inc. Motorola expects to begin offering the low-cost handsets during the first quarter of 2006. The 10 GSM operators participating in the program are expected to order about 6 million low-cost handsets.
In February, Motorola leapt into the high-volume, low-cost mobile-phone business-a space dominated by the likes of Nokia Corp. and Siemens AG-with plans to sell millions of new phones in emerging wireless markets like India, Turkey, Pakistan, Thailand and elsewhere. At that time, the company said it would sell 6 million sub-$40 handsets.
“Connecting the unconnected is a rallying cry across Motorola. 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,” said Ron Garriques, president of Motorola Mobile Devices.
The GSM Association believes that while 80 percent of the world’s population has wireless access, only 25 percent are able to use it. Many carriers agreed.
“In many of our operations, handset costs have proven to be a barrier to entry for prospective subscribers,” said Phuthuma Nhleko, chief executive officer of the MTN Group.
The GSM Association also is examining the role taxes on handsets and service plays on increasing the use of wireless.
“Not only do we have to reduce the price of handsets coming out of the factory gate, we also have to work with governments to optimize tax structures,” said Rob Conway, chief executive of the GSM Association. “We believe reducing taxes will accelerate take-up and help businesses and individuals in developing countries to reach out and connect with each other and with the developed world.”
The program appears to be succeeding. Citing a Lehman Brothers report, the GSM Association said that phase one helped boost Indian GSM operators’ monthly net customer additions by one-third over previous months.
