AI divide looms over smartphone affordability in emerging markets, says GSMA

The GSMA, representing the global mobile ecosystem, has cautioned that the world risks a new global divide between AI “haves” and “have-nots” unless urgent action is taken to address the digital divide and make smartphones affordable for billions in low- and middle-income countries.

Its State of Mobile Internet Connectivity (SOMIC) Report 2026, released on Tuesday, highlights that 3.4 billion people still do not use mobile internet, even though over 90 per cent of them live within mobile broadband coverage.

Without affordable smartphones, these individuals will be excluded from the benefits of the AI revolution, the London-based telco association stressed.

The report has identified a sharp increase in the cost of smartphone memory and chipsets as significant threats to digital inclusion. With semiconductor manufacturers prioritising AI infrastructure and data centers for the supply of components, the prices of entry-level smartphones have shot up in recent quarters, hindering mobile internet access for low-income consumers.

Vivek Badrinath, director-general of the GSMA, said, “Artificial Intelligence has the potential to improve lives on an unprecedented scale, but AI is meaningless if people cannot get online in the first place. The greatest risk is not simply an AI divide between countries, but between people who can afford to participate in the digital economy and those who cannot.”

He added, “Unless we protect the affordability of entry-level smartphones, billions of people risk being excluded from the next generation of digital services before they have even had the opportunity to experience the internet. The current memory price increases make this a clear and present danger.”

The GSMA is urging chipset and memory manufacturers to increase the availability of affordable components for entry-level handsets. It has also highlighted the need for dialogue with the wider mobile ecosystem, policymakers, and financial institutions to find solutions.

The SOMIC Report 2026 further showed that while 4.8 billion people now use mobile internet, growth is slowing. Around 160 million people came online in 2025, a decrease from 190 million the previous year. Handset affordability is cited as the biggest barrier to mobile internet adoption in surveyed low- and middle-income countries, followed by a lack of digital skills.

By the end of 2025, an entry-level internet-enabled handset cost the poorest 20 per cent of people in LMICs the equivalent of 44 per cent of their average monthly income, rising to 76 per cent in Sub-Saharan Africa. These costs are expected to increase further due to memory price hikes.

Data from Counterpoint Research cited in the report showed that memory prices more than doubled between Q3 2025 and Q1 2026, with an additional 80–90 per cent increase in Q2 2026. This has already led to sharp increases in entry-level smartphone prices and a forecast for the largest annual decline in global smartphone shipments on record, primarily due to the collapse of the sub-$100 handset segment, with emerging markets expected to be hit hardest.

The GSMA warns that this not only undermines digital inclusion but also the economic opportunity from broader internet adoption. Previous analysis estimated that closing the mobile usage gap could generate $3.5 trillion in additional GDP between 2023 and 2030, with over 90 per cent of these benefits flowing to low- and middle-income countries. Improving handset affordability, alongside addressing other barriers like low literacy, digital skills, and safety concerns, is crucial for realising this opportunity.