Ultra-low cost mobile phones a hit, group says

Sales of a pair of ultra-low cost mobile phones aimed at poor nations have exceeded expectations since their launch at the beginning of the year, prompting the GSM Association to extend the program that led to their creation.

Mobile phone operators in emerging market nations such as Bangladesh, China, India and Russia have already bought or ordered more than 12 million mobile phones under the Emerging Market Handset program, the GSMA said in a statement Monday.

The handsets are aimed at the roughly 1 billion people in developing countries around the world who lack the money to purchase conventional mobile phones. GSMA launched the Emerging Market Handset program to entice companies to create a sub-$30 handset, despite the low margins they would likely gain from sales. As part of the competition, a group of 10 operators in developing countries had agreed to buy 6 million of the winning mobile phone model.

Motorola won the competition with two handsets, the C113 and C113a, which went on sale at the beginning of this year.

“This program is a great success. Together with the GSMA and our mobile operator partners, we are enabling over 31,000 new consumers to experience mobile connectivity every single day,” said Ron Garriques, president of Motorola Mobile Devices, in a statement.

Strong demand for the handsets prompted the GSMA to extend its endorsement of Motorola as the Emerging Market handset vendor for an additional six months, representing the entire second half of this year.

The GSMA has also established a program to share access to mobile phones for the many people who can’t afford even an ultra-low cost one such as the Motorola designs. The GSMA’s Development Fund is aimed at projects increase the use of shared access handsets in the developing world.

For example, the South African company Sharedphone uses the ultra-low cost Motorola handsets as a mobile payphone to offer people a chance to make a call or send a text message, GSMA said.

Motorola and the mobile phone operators participating in the program are contributing 50 cents to the Development Fund for every handset sold under the Emerging Market Handset program. The GSMA’s goal is to give 80% of the world’s population access to mobile communications by 2010 even if they don’t all own a handset, the association said.