GSM Association pushes for further handset price reductions

Open to handset manufacturers worldwide, the result of the selection process will be announced at the 3GSM World Congress Asia in Singapore at the end of September, with new handsets expected to be available from 1Q06.

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By  Tawanda Chihota Published  July 8, 2005

The GSM Association (GSMA) has announced an ‘Invitation to Strategic Partnership’ issued to handset manufacturers for the supply of the next ultra-low cost handset, in order to expand usage to as yet unconnected potential subscribers in emerging markets around the world. Open to handset manufacturers worldwide, the result of the selection process will be announced at the 3GSM World Congress Asia in Singapore at the end of September, with new handsets expected to be available from 1Q06. The objective for the second phase is to achieve a sub US$30 handset price-point, with a similar volume target as the first phase of six million handsets within the first six months. “Effective communication is one of the key catalysts for economic growth. The GSMA is bringing together operators and vendors to address the affordability issues of mobility in emerging markets, ” said Craig Ehrlich, chairman of the GSM Association. “The next phase of our initiative aims to drive even greater affordability, through sustainable products, at even lower cost than the first phase of the programme. At the right entry level we believe there is the potential for over a hundred million new connections per year.” Motorola won an initial supply tender earlier this year, and is already on target to meet the programme’s anticipated volume of six million units. The ultra-low cost handset programme forms a major part of the GSMA’s Emerging Markets Initiative. Although 80% of the world’s population has wireless coverage, the GSMA estimates that today’s 1.3 billion GSM users represent only 25% of the potential addressable market. “The price of the handset is only one hurdle,” said Rob Conway, CEO of the GSMA. “We are also pushing hard for further positive changes that can be effected by governments, such as more flexible regulatory decisions and a more favourable approach to taxation. In addition, we are encouraging innovative payment mechanisms that could further positively reduce the barriers to ownership.” The following GSM operators comprise the steering committee for the second phase Emerging Market Handset programme supply tender – others are expected to confirm participation shortly: AIS – Thailand Bharti – India BPL – India BSNL - India Globe Telecom - Philippines GrameenPhone – Bangladesh Hutchison Essar– India IDEA - India MTN – South Africa, Rwanda, Uganda, Swaziland, Cameroon, Nigeria, Zambia, Cote d’Ivoire MTNL - India Orascom – Algeria, Bangladesh, DRC, Egypt, Iraq, Pakistan, Tunisia Telenor – Russia, Ukraine, Thailand, Bangladesh, Pakistan Vodacom – South Africa, Congo, Lesotho, Mozambique, Tanzania.

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