Groupe Spécial Mobile Association (GSMA), the umbrella body of mobile operators globally, has formed a global coalition involving telecommunications operators, phone manufacturers, and financial institutions, among others to bring down the cost of mobile phones in low- and middle-income countries (LMICs) in Africa and Asia.
Members of the coalition include telecom operators MTN Group, Orange, Vodafone, Ethio Telecom, and device makers such as Huawei, ZTE, Honor, among others.
Financial institutions members of the coalition include the International Finance Corporation (IFC) and the World Bank.
According to a statement from the GSMA, the coalition which also has device ecosystem players like Google, Intelligra, and M-Kopa, among others, would work together to bring down the cost of entry-level smartphones.
Mobile usage gap
While citing device affordability as a major issue, GSMA noted that approximately 3 billion people, or 38% of the global population currently live in an area covered by mobile broadband but do not use mobile internet services. It described this as the usage gap, which deprives individuals of access to essential information and services.
“In LMICs, mobile broadband remains the primary, and often the only way, of accessing the internet. Despite widespread awareness of digital services, one of the main barriers remains the affordability and accessibility of internet-capable devices.
“In LMICs, entry-level mobile devices typically consume 16% of monthly incomes on average, with this figure rising to 44% for the poorest 40% and 55% for the poorest 20% of the population,” the GSMA stated.
According to the body, handset affordability is not a new issue as companies have been working for years to bring down the cost of entry-level devices. It, however, noted that by working together, the new coalition would spearhead ideas and strategies to improve handset affordability and close the usage gap.
Other stakeholders’ role
Meanwhile, in addition to the efforts, GSMA said governments would also need to remove import duties and 2 sector-specific taxes, which can increase the cost of a device by up to 30%.
“The affordability barrier is not just about the cost of purchasing a handset. It is also impacted by other factors such as willingness to pay, awareness, digital skills, access to financing, and social norms, among others,” it added.
GSMA also recommended innovative device financing schemes by public and private organizations, adding that device manufacturers must consider consumer needs, preferences, and perceived value to increase willingness to pay.
What you should know
Recognizing the high cost of smartphones as one of the access barriers to broadband in the country, Nigeria in its National Broadband Plan (NBP 2020-2025) developed by key experts in the ICT industry, had set a target of having, at least, one smartphone assembly plant by 2023.
This was to ensure the price of an entry-level smartphone in the country could be as low as N18,000.
However, the country currently has no local smartphone assembly plant, while costs of smartphones in the country have skyrocketed as a result of the Naira devaluation. The cheapest smartphone in the market currently sells for about N65,000.