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The GSM Association is extending its effort to get low-priced mobile phones into the hands of people in developing countries.

The industry group, comprising operators, phone makers and developers, is moving into the second phase of its Ultra-Low Cost Handset initiative, which aims to get handsets costing less than $30 onto the market in poorer nations.

Although 80 per cent of the world's population has mobile phone coverage, today's 1.3 billion GSM users represent only 25 per cent of the potential, the GSM Association (GSMA) notes.

Phase 2 includes an "Invitation to Strategic Partnership" issued to handset manufacturers.

Once phone makers are selected for the initiative - a process which should be completed in the autumn - the GSMA will see to it that the ultra-low cost phones will hit the market in the first quarter of 2006. The group is aiming to see six million handsets sold under the programme within the first six months.

"The next phase of our initiative aims to drive even greater affordability, through sustainable products, at even lower cost than the first phase of the programme," said Craig Ehrlich, chairman of the GSMA. "At the right entry level we believe there is the potential for over a hundred million new connections per year."

Several operators are already expected to sign up to the second phase of the initiative, including six Indian operators, three in Bangladesh and two Pakistan operators. Players in Thailand, the Philippines, South Africa, Rwanda, Uganda, Swaziland, Cameroon, Nigeria, Algeria, DRC, Egypt, Iraq, Tunisia, Russia, the Ukraine, Lesotho, Mozambique and Tanzania are also expected to jump on board.

"Operating in developing markets means that we are dealing with the challenges on a day-to-day basis," said Erik Aas, CEO of Telenor-owned GrameenPhone in Bangladesh and a manager of the initiative. "We must ensure that the realities of the issues faced by developing countries are addressed. This programme seizes the initiative and pushes the potential - we are making the market happen."

The Ultra-Low Cost Initiative kicked off at the start of the year, with a trial which saw phone maker Motorola agree to supply low-cost handsets to phone makers in developing markets -- a tender which enabled Motorola to make a small profit. Phase one of the project also aims to see 6 million units make it into the hands of users and the GSMAexpects to hit its targets.

"The price of the handset is only one hurdle," said GSMA CEO Rob Conway. "We are also pushing hard for further positive changes that can be effected by governments, such as more flexible regulatory decisions and a more favourable approach to taxation. In addition, we are encouraging innovative payment mechanisms that could further positively reduce the barriers to ownership."

GSM Association press release is here

© ENN

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