By Emmanuel Ogbodo
The Groupe Spécial Mobile Association (GSMA), representing global mobile operators, has formed a coalition involving telecom operators, phone manufacturers, and financial institutions to reduce mobile phone costs in low- and middle-income countries (LMICs) in Africa and Asia.
Coalition members include telecom operators MTN Group, Orange, Vodafone, Ethio Telecom, and device manufacturers such as Huawei, ZTE, and Honor. Financial institutions in the coalition include the International Finance Corporation (IFC) and the World Bank.
According to GSMA, the coalition, which also includes ecosystem players like Google, Intelligra, and M-Kopa, aims to reduce the cost of entry-level smartphones. GSMA highlighted that around 3 billion people, or 38% of the global population, live in areas with mobile broadband coverage but do not use mobile internet services, known as the usage gap. This gap deprives individuals of access to essential information and services.
“In LMICs, mobile broadband is often the primary or only means of accessing the internet. Despite widespread awareness of digital services, affordability and accessibility of internet-capable devices remain significant barriers. Entry-level mobile devices in LMICs consume, on average, 16% of monthly incomes, with this figure rising to 44% for the poorest 40% and 55% for the poorest 20% of the population,” the GSMA stated.
Handset affordability is a longstanding issue, and the coalition aims to spearhead ideas and strategies to improve affordability and close the usage gap. GSMA emphasised that government actions, such as removing import duties and sector-specific taxes that can increase device costs by up to 30%, are also necessary.
“The affordability barrier involves more than just the cost of purchasing a handset. Factors like willingness to pay, awareness, digital skills, access to financing, and social norms also play a role,” the GSMA added. The organisation recommended innovative device financing schemes by public and private entities and urged device manufacturers to consider consumer needs and preferences to increase willingness to pay.
Nigeria, recognizing the high cost of smartphones as a barrier to broadband access, included a goal in its National Broadband Plan (NBP 2020-2025) to establish at least one smartphone assembly plant by 2023 to lower entry-level smartphone prices to around N18,000. However, the country currently lacks a local smartphone assembly plant, and smartphone costs have soared due to Naira devaluation, with the cheapest smartphones now selling for about N65,000.
