To follow are a number of commonly asked questions about the Emerging Market Handset Programme
Emerging Market Handset Programme
- General
- Handset Related
- The Economics
- Future Plans
1. General
Q: What is the Emerging Market Handset Programme (EMH)?
A: key component of the GSMA's 'Connecting the Unconnected' campaign, the objective of which is to give more people in developing countries access to mobile phones, and to help bridge the digital divide.
Specifically, the GSM Association and some of its operator members set out to create a new Ultra-Low Cost handset segment. This was with the strategic aim of creating a sustainable sub US$30 handset for emerging markets.
This is being achieved by combining the buying needs of participating operators in developing countries to provide economies of scale.
Q: What’s the process and current status?
A: working group comprising a number of GSM Association operator members was created and vendors were invited to pitch for the provision of the first Emerging Market Handsets under this initiative.
This initial programme, which relates to the six months to the end of December 2005, is well underway with Motorola being appointed as the winning vendor in February 2005.
Phase two relates to the six-month period commencing January 1st 2006 was initiated in June 2005.
Motorola has once again been selected as the supplier.
Q: Which operators and markets are involved?
A:
Operators in any emerging market, as defined as part of this initiative, may participate.
The Operators involved in the second phase are: - AIS, Bharti, BPL, Globe Telecom, Hutchison Essar, IDEA Cellular, MTN Group, Orascom Telecom, Telenor and Vodaco
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| Operator |
Country |
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Thailand |
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India |
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India |
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Philippines |
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India |
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India |
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South Africa, Rwanda, Uganda, Swaziland, Cameroon, Nigeria, Zambia, Cote d’Ivoire |
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Board Sponsor & Bangladesh / Kazakhstan Pakistan / Russia / Ukraine |
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Algeria, Bangladesh, DRC, Egypt, Iraq, Pakistan, Tunisia |
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South Africa, Congo, Lesotho, Mozambique, Tanzania |
Q: How are emerging markets defined under this initiative?
A: Countries rating below average in the World Bank's GNI (GNP per capita index) and with a mobile penetration of below 60%.
Q: Operators in which countries may participate?
A: A list of Emerging Markets is attached. Please note that this is indicative and may change.
Q: What other criteria do operators need to meet?
A: Additionally, operators involved have to demonstrate that a significant marketing effort will be deployed in targeting the less affluent in their countries.
Q. How did the Second Phase Process Differ from the first one?
A: The second phase leveraged the learning's from the first phase. Some of the operators changed, and noticeably included the African operators MTN & Vodacom.
Q: Is the GSM Association actually purchasing the handsets?
A: No, the GSM Association is managing the process on behalf of a group of member operators. The individual Operators will conclude purchase contracts directly with the vendor.
2. Handset Related
Q: What handsets are currently available under the EMH programme?
A: In the second phase, Motorola submitted two handsets in its proposal - the C113 and the C113a, which was 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.
Q: Why was Motorola chosen?
A: The criteria that submissions were judged against were: price, logistics capability, service capability, brand, marketing support, form factor, usability, functionality & strategic commitment. Motorola was selected further to the process detailed above, it having scored highest against these criteria.
Q: How many handsets did Motorola sell under phase one?
A: The GSMA cannot answer this question. Please contact Una Kent at Motorola (+44 1256 790317 or una.kent@motorola.com)
Q: What does the endorsement mean for Motorola and the operators?
A: That for the duration of the endorsement period, qualifying operators can purchase the featured handsets from Motorola taking advantage agreed pricing and discounts plan.
Q: When will these handsets ship?
A: The handsets ship during the six months commencing 1st January 2006.
Q: Can handsets be purchased from other manufacturers under the EMH programme?
A: Motorola is the only vendor endorsed under the EMH programme.
Q: Will this prevent participating operators from buying from other manufacturers?
A: There is no restriction whatsoever on operators buying devices from other manufacturer's.
Q: How has quality been maintained?
A: Motorola have made continuous investment and improvement in designing cost out of devices and specifically tailored for this segment of the market.
3. The Economics
Q: What is the potential size of the market?
A: More than 3 billion people in the world live in areas of wireless coverage but cannot afford wireless services. The creation of an Ultra-Low Cost handset segment will make mobile phones more affordable for many of these people.
Q: What is the volume target?
A: The volume target is six million handsets, during the period of six months (January 1st 2006 - June 30th 2006).
Q: How much will the handsets cost?
A: Under the terms of the second phase, Motorola will supply handsets sub US$30 target with its C113 & C113a phones.
Q: Could these handsets end up being sold in developed markets?
A: Under the EMH programme, the EMH handsets can only be purchased by GSM Association operator members (or distributors nominated by these members) in developing countries as defined above. Marketing efforts will only be focussed on participating developing countries.
Q: What about other factors that affect the cost of ownership?
A: In addition to the handset cost, the other two major cost elements are service provision and regulatory / tax requirements. The GSM Association is working with the industry to address service provision costs. The regulatory / tax area requires serious government support and the GSM Association will be reaching out to the relevant governments and regulators with a view to achieving this goal. Please see the GSM Association Taxation Report. Please see below for further information about the other elements of the GSM Association's 'Connecting the Unconnected' Campaign.
Q: Is this about re-directing existing handset inventory?
A: No, Motorola has made a strategic commitment to developing countries and has invested in on-going research and development to develop new products specifically for this market.
4. Future Plans
Q: What are the next steps for the Emerging Market Handset initiative?
A: In the short to medium term, the GSM Association and its members will be concentrating on leveraging economies of scale and non-technical cost-reduction opportunities.
Q: Will the process expand into other market segments?
A: It is focussed entirely on creating a new Ultra-Low Cost segment in developing countries.
Q: Will there be further opportunities for vendors to compete for this segment in the future?
A: Given the size of the market, it is up to vendors to decide if they wish to compete but the GSMA will not be working on a third phase for supply of ultra low cost handsets.
Q: What about other manufacturers developing market initiatives?
A: The Emerging Market Handset programme in no way restricts any operator's freedom to purchase devices from other manufacturers or manufacturers freedom to sell devices.
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