An initiative by an alliance of telecommunications providers, handset producers, and sector associations to introduce $40 smartphones to the market — a cost level regarded as crucial for enabling tens of millions more people to access the internet — is gaining traction, yet uncertainties persist over whether manufacturers are capable of producing such extremely inexpensive devices in large quantities.
This week, during the Mobile World Congress in Barcelona, the prominent industry association GSMA announced its collaboration with leading cellular network providers across Africa — specifically Airtel, Axian Telecom, Ethio Telecom, MTN Group, Orange, and Vodafone — along with smartphone manufacturers, to test highly affordable 4G handsets in six African nations: the Democratic Republic of the Congo, Ethiopia, Nigeria, Rwanda, Tanzania, and Uganda. This effort aims to enhance smartphone accessibility and connect a further 20 million individuals to the internet.
Cost-effective smartphones are broadly considered essential for reducing the internet access gap in emerging economies, where millions reside in areas with cellular broadband access but lack internet connectivity, often because web-capable gadgets remain prohibitively costly. Through its Handset Affordability Coalition, the GSMA is partnering with operators and manufacturers to advance the availability of handsets with a cost near $40 to help bridge this disparity.
The endeavor is still in its nascent phase, with business discussions ongoing between mobile operators and smartphone manufacturers to create handsets fitting the desired cost bracket.
The GSMA has consulted with more than 15 smartphone manufacturers for this undertaking, with seven companies showing willingness to back the initiative, Alix Jagueneau, the group’s director of external relations, informed TechCrunch.
“The $30–$40 price point is a target, derived from GSMA market analysis on cost-effectiveness and is to be understood as an aspirational goal,” Jagueneau stated, adding that increasing expenses for memory components are intensifying the need and intricacy of the effort.
The ultimate cost of such devices will depend on a confluence of elements, including funding arrangements and fiscal regulations, Jagueneau told TechCrunch. Developmental financial bodies, contributors, and other monetary organizations could help mitigate hazards for mobile operators committing capital to these handsets. Simultaneously, customs tariffs and levies on smartphones — sometimes categorized as non-essential goods — can augment handset costs by up to 30% in some markets, Jagueneau noted.
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The GSMA has not disclosed which manufacturers will manufacture the devices, with Jagueneau confirming that business negotiations with smartphone makers are still ongoing. Nevertheless, the group anticipates that first prototype models could be developed this year, with initial retail products possibly appearing in stores by late 2026.
None of the six countries selected for the trial scheme has yet pledged to lower customs tariffs or levies on basic smartphones, Jagueneau revealed, adding that the group is collaborating with service providers to establish continuous communication with governments in the coming months.
“We believe there is a pressing need for the public sector to tackle this aspect of the challenge for the sake of digital integration,” Jagueneau asserted. She further added that the group applauded South Africa’s abolition last year of a 9% luxury consumption tax on smartphones priced below R2,500 (approximately $150), suggesting other nations ought to adopt comparable measures.
Narrow profit margins and escalating constituent expenses
Market observers suggest the sector could contend with difficulties to manufacture handsets approaching the $40 cost level given prevailing parts pricing.
“Promoting handsets valued between $30 and $40 could have been previously attainable when memory costs were considerably reduced,” stated Ahmad Shehab, a research analyst at Counterpoint Research.
Devices at that price point would likely feature minimal technical specifications and meager earnings, Shehab told TechCrunch, further noting that obtaining smaller memory modules can also be challenging as providers increasingly favor higher-capacity chips.
The mean retail value of smartphones in the Middle East and Africa, according to Counterpoint, was approximately $188 in the fourth quarter of 2025, underscoring the disparity between prevailing retail costs and the aspirational $40 threshold.
“Although a few brands have reached average selling prices below $40, these sales volumes remain insignificant and are mostly unrepresented among leading worldwide suppliers,” Shehab said.
Efforts to introduce extremely inexpensive mobile phones to developing economies have encountered prior difficulties. In 2014, Google initiated the Android One initiative to encourage the use of affordable smartphones in markets including India, Pakistan, Bangladesh, and Indonesia before extending the scheme to Africa in 2015. However, it contended with limited broad acceptance.
Google maintained the initiative in some markets for several years, including Japan, but it failed to establish itself as a leading system for basic mobile devices.
Jagueneau commented that the endeavor necessitates harmonized collaboration among service providers, producers, and public authorities, but emphasized that enhancing availability of inexpensive mobile phones is still vital to connecting a greater number of individuals to the internet.
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