Press Releases 2005
GSM Association Forges Sub-$30 Mobile Phone Segment For Developing Countries |
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Motorola selected to supply affordable and robust handsets for
second phase of programme to 'connect the unconnected'
Singapore 27th September 2005: The mobile industry has driven the wholesale cost of mobile phones to below US$30 as part of the GSM Association (GSMA) programme to make mobile telephony affordable for people in developing countries.
“To get below US$30 per handset is a milestone achievement,” said Craig Ehrlich, Chairman of the GSMA, the global trade association for the world’s GSM mobile operators. “Today’s news cements the formation of a whole new market segment for the mobile industry and will bring the benefits of mobile communications to a huge swathe of people in developing countries.”
At the 3GSM World Congress in Singapore, Rob Conway, Chief Executive and board member of the GSMA, announced today that Motorola has been selected to supply the phase-two handset. “Motorola won thanks to a combination of a portfolio starting from sub-US$30, together with other key factors such as after-sales support, local service, brand presence and a choice of low-cost handset models including an exclusive product, the C113a for this programme,” said Conway.
The 10 operators supporting the second phase of the GSMA’s Emerging Market Handset programme expect to order about 6 million of these low-cost handsets from Motorola. The GSMA programme, which is chaired by Erik Aas, the Chief Executive of GrameenPhone Ltd. of Bangladesh, is supported by some of the leading operators in emerging markets – AIS, Bharti, BPL, Globe Telecom, Hutchison Essar, IDEA Cellular, MTN Group, Orascom Telecom, Telenor and Vodacom.
 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.
The Emerging Market Handset programme forms a key part of the GSMA’s “Connecting the Unconnected” initiative that has attracted widespread industry and government recognition.
" 'Connecting the unconnected' is a rallying cry across Motorola," said Ron Garriques, president of Motorola Mobile Devices. "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. I'm proud that the GSMA has once again chosen Motorola as its partner for this important opportunity to fuel economic development and growth."
Motorola also won phase one of the programme with its family of handsets based on the C11X platform. During this first phase, EMH handsets were supplied into 17 countries through 10 participating operators. These countries included India, South Africa, Nigeria, DRC, Egypt, Algeria, Tunisia, Bangladesh, Turkey, Thailand, Philippines, Malaysia, Indonesia, Pakistan, Yemen, Sri Lanka and Kenya. These markets have a total population of about 1.8 billion
Analysts say these handsets have allowed far more people to take advantage of mobile communications. For example, the arrival of the Motorola C115 in India helped boost Indian GSM operators’ monthly net customer additions by one third to 1.6 million in June, according to a report by Lehman Brothers.
The GSMA expects the cost of handsets to continue to fall as chipmakers and other component suppliers increasingly focus on this potentially huge market.
The GSMA also highly commended a low-cost handset proposal from TCL & Alcatel Mobile Phones Ltd. "T&A Mobile phones is very honoured to have its efforts to serve emerging markets recognized by the GSM Association,” said TCL & Alcatel CEO Fei Liu. “Building on our key company values of flexibility, innovation and entrepreneurship, we are committed to delivering high-value handsets tailored to local requirements under the Alcatel brand."
The GSMA is also looking at what can be done to remove other barriers preventing more people in developing countries from using mobile phones, such as taxes on handsets and services. The Association has just published a report revealing that punitive tax levels in some developing countries are pushing up the price of handsets and mobile services beyond the means of many people.
“Not only do we have to reduce the price of handsets coming out of the factory gate,” said Conway, “We also have to work with governments to optimize tax structures.”
“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,” he continued. “Taken together, these initiatives represent a concerted, unified programme to extend communications and connect the unconnected.”
Supporting quotes from participating operators
“The startup price is the single most important criteria for connecting the unconnected in emerging markets. The GSMA Emerging Market Handset initiative is a major step towards reducing the startup price, and will fuel significant economic growth, as well as major social changes, when so many new people can communicate directly from their home or on the move. “
Erik Aas, CEO of GrameenPhone.
“Wireless communication is the foundation for creating a higher standard of living and for social development in a country with a widely-dispersed population. The provision of affordable devices is essential for a country’s development towards universal access to communications.”
Yingluck Shinawatra, President of AIS.
“The first phase of the Emerging Market Handset programme, which paved the way for new low cost terminals with an affordable Motorola product, has helped Globe penetrate the lower income segment of the population, even in less-developed towns in the Philippines. Our tracking shows these phones are delivering good subscriber usage and, interestingly, in some cases, ‘phone-sharing’ behavior. There are still more challenges in making mobile service more affordable, both from the perspective of cost and service package. We are glad that the GSMA is further breaking down barriers on the terminal cost side through the second phase of the Emerging Market Handset programme.”
Gerardo C. Ablaza, President and CEO of Globe Telecom.
“High prices of handsets in the past have inhibited growth. Despite the fact that people have started changing their phones more frequently than ever before, this pattern is restricted to the high end segment which needs to be contemporary at all times. However, the huge demand that lies ahead will be spurred by a sub $ 30 handset. This is not about communication alone...it is also an economic opportunity for the masses!”
Sandip Das, Deputy Managing Director of Hutchison Essar Ltd.
“Idea wholeheartedly welcomes the Emerging Market Handset project which will bring to the rural markets of India an ultra low cost handset. By lowering entry costs, this project will bring about an inflexion point that will lead to high levels of telecom penetration in India.”
Vikram Mehmi, CEO of IDEA Cellular.
“The MTN Group is a proud supporter of the GSM Association’s Emerging Markets Handset (EMH) Initiative. In many of our operations handset costs have proven to be a barrier to entry for prospective subscribers. This initiative has resonance with MTN’s commitment to increase access to information and communication technologies (ICTs) through introducing products and services that are relevant, cutting edge and affordable. As such we believe the introduction of an Ultra-Low Cost handset will significantly contribute to making mobile communications access increasingly affordable.”
Phuthuma Nhleko, CEO of MTN Group.
“Again, the GSMA Emerging Markets Handset project managed to catalyze the creation of a new high volume handset segment. The sub-$30 ultra-low cost handset will further lower the barriers for new subscribers in our markets and enable more people from low income segments to benefit from mobile communications “
Naguib Sawiris, CEO of Orascom Telecom.
“We are strongly committed to offering affordable mobile services to as many people as possible, and the ultra low-cost handset initiative directly addresses the issue of providing effective mobile communication in emerging markets.”
Arve Johansen, Senior Executive Vice President of Telenor's international mobile operations.
Visit the EMH website
About the GSM Association
About Motorola:
Motorola is a Fortune 100 global communications leader that provides seamless mobility products and solutions across broadband, embedded systems and wireless networks. In your home, auto, workplace and all spaces in between, seamless mobility means you can reach the people, things and information you need, anywhere, anytime. Seamless mobility harnesses the power of technology convergence and enables smarter, faster, cost-effective and flexible communication. Motorola had sales of US $31.3 billion in 2004. For more information: www.motorola.com.
GSMA Contacts
Mark Smith
Tel. +44 (0)20 7759 2300
Fax. +44 (0)7850 229 724
Email: press@gsm.org
David Pringle
GSM Association
Tel: +44 795 755 6069
Email: dpringle@gsm.org
Una Kent
Motorola
Tel: +44 1256 790317
Email: una.kent@motorola.com
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