The global telecom industry body says lower duties, instalment plans and a stronger refurbished-phone market are needed to keep handsets affordable, as soaring memory-chip prices threaten the goal of connecting billions of unconnected people.
The Global System for Mobile Communications Association, or GSMA, has reportedly urged governments and manufacturers to rethink how budget handsets are priced and sold, warning that a surge in memory-chip costs is placing smartphones beyond the reach of many first-time internet users.
According to reports, GSMA Director General Vivek Badrinath said the industry can no longer rely on conventional methods to widen access, especially in developing economies where the cost of a phone is the main barrier to going online.
He acknowledged that the sector’s long-standing aim of selling capable smartphones for about $50 has been set back by higher component prices.
Chips diverted to AI
The squeeze stems largely from the rapid build-out of artificial intelligence infrastructure. Data centres are absorbing vast quantities of memory chips, leaving supply tight and pushing up costs for device makers. Badrinath noted that suppliers are tending to favour customers in more lucrative segments, which leaves producers of low-priced phones struggling to secure parts at workable rates.
The effects are already visible in India. Handset brands have been raising prices, while many buyers are delaying upgrades or choosing cheaper models. Citing IDC’s Worldwide Quarterly Mobile Phone Tracker, the reports said India’s smartphone market could shrink by 12 to 15 per cent in 2026, which would mark its sharpest annual fall since 2019.
The problem is global. Roughly 3.1 billion people still do not use mobile internet even though they live within network coverage. In India, network coverage reaches 99 per cent of the population, underlining that the hurdle is the cost of devices rather than the availability of signals.
Proposed remedies
Badrinath called on governments to reduce taxes on entry-level phones, pointing to steps taken in Africa and Argentina as examples. He stressed that cheaper devices are vital for bringing lower-income households online. In some African regions, he said, the poorest residents may need more than three weeks of earnings to afford a smartphone.
The GSMA is also studying financing schemes that let customers pay in instalments. Loan guarantees, subsidies and funding from corporate social responsibility budgets could make such plans viable for low-income buyers.
In addition, Badrinath backed local manufacturing in cases where it lowers prices for consumers. He also encouraged wider use of refurbished and second-hand phones, arguing that they could open up digital access while cutting electronic waste by keeping devices in use for longer.
