The global telecoms industry body GSMA has issued a stark warning: without urgent action to lower smartphone prices, billions of people in low- and middle-income countries risk being shut out of the artificial intelligence revolution. The call comes as the organisation publishes its State of Mobile Internet Connectivity Report 2026, an annual assessment of global mobile access.
The report reveals that while 4.8 billion people now use mobile internet on their own devices, 3.4 billion still do not—even though 90% of them live within areas covered by mobile broadband. GSMA calls this the “usage gap”, and it is widening as the cost of entry-level handsets climbs.
Growth in the global digital population is also slowing. Roughly 160 million new users came online in 2025, compared with 190 million the previous year. The slowdown is most pronounced in emerging markets, where affordability is the primary barrier.
AI demand drives up component costs
According to GSMA, a key factor behind the growing digital divide is the “sharp increase in the cost of smartphone memory and chipsets, driven by global demand for AI infrastructure and data centres.” Memory prices more than doubled between the third quarter of 2025 and the first quarter of 2026, followed by an additional 80–90% rise in the second quarter of 2026.
These higher component costs are passed on to consumers. Entry-level smartphones have become unaffordable for many, particularly in sub-Saharan Africa and parts of Asia. By the end of 2025, the poorest 20% of people in low- and middle-income countries would have had to spend up to 44% of their average monthly income on such a device; in sub-Saharan Africa, that figure reached 76%.
GSMA Director General Vivek Badrinath stressed the stakes: “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.” He added that the greatest risk is not simply an AI divide between countries, but between those who can afford to participate in the digital economy and those who cannot.
The report warns that the price surge could lead to the “largest annual decline on record” in global smartphone shipments, hitting emerging markets hardest. This threatens to reverse years of progress in closing the usage gap.
Call for $30 smartphones
GSMA is urging manufacturers to bring the price of entry-level smartphones down to $30, a level that would make devices affordable for nearly 1.6 billion people. A $20 price point could extend access to around 2.2 billion individuals currently living within mobile broadband coverage.
The organisation also calls on chipset and memory producers to “take meaningful steps to increase availability of affordable components for entry-level handsets,” arguing that this would enable smartphone makers to lower prices without sacrificing quality.
For Europe, the implications are twofold. On one hand, European consumers may face higher prices for budget devices, as global component costs rise. On the other, European policymakers and companies have a stake in ensuring that developing nations are not left behind, as digital inclusion is tied to economic growth, security, and migration patterns. The erosion of purchasing power across the continent already affects how much households can spend on technology.
GSMA’s report serves as a reminder that the benefits of AI—from healthcare to education—will only be realised if the infrastructure and devices are accessible to all. As Badrinath put it, “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 organisation is calling on governments, regulators, and industry leaders to act now. Without coordinated efforts, the digital divide could become an AI divide, entrenching inequality for decades to come.
