Smartphones are now so ingrained in our lifestyles that we see them as our gateway to connectivity. In developed markets, society is increasingly structured on the reasonably accurate premise that everyone has access to a 4G device, but in emerging markets, it becomes apparent that smartphones are more of a luxury.
African consumers in particular struggle with the cost of 4G-capable devices - the GSMA’s recent Mobile Economy Africa Report for 2025 found that there is still a significant affordability gap, with around 58% of Africans remaining offline because smartphones are too expensive. Together with major African players MTN, Airtel and Orange, the GSMA has put forward proposals to bring ultra-low cost 4G smartphones priced between $30 and $40 to Africa. Currently, comparable entry-level devices typically cost over $200.
But if a $30 smartphone became available overnight in even a handful of African markets, what would be the ramifications – for both Africa’s consumers and its operators?
The Capacity Gap
Ethel Cofie, Founder and CEO of Edel Tech Consulting, believes that it could be a shock. “The projected numbers, if something like this happens at the $30 - $40 price point, that is bringing between 20 and 50 million onto the grid. That's ridiculous in terms of network planning”, says Cofie.
Cofie predicts that those coming online will be seasoned internet users familiar with how to use apps, but who have not previously had free access to data. Their usage will therefore be fairly data-intensive, requiring immediate increases to capacity, but there are various conversations about how this can be addressed. Building edge computing caching, such as regional data centres, would enable content and services to be delivered locally, reducing latency load on international links to help guard against outages.
She adds that power will also be an issue – this could include off grid options in the short term, and PPAs [Power Purchase Agreements], renewables, and micro grids in the longer term. “You’ve got to fix the coverage then ensure that…data [is] pinging locally, and then you've got to provide more power and capacity. If you look at providers on the market, even data centre providers - MTN with Bayobab - they seem to be inching towards getting ready for something like this.”
Initially, a lot of the focus among African operators was on fixing the coverage gap, and this has largely been accomplished. Now the gap is with capacity. “The networks will struggle, because I don't think anybody is planning for 20 - 30 million people to suddenly come online. Initially there will be capacity problems…issues with getting people capacity, and if not done well, that will degrade the experience.”
The Affordability Gap
However, the GSMA’s Head of Africa, Angela Wamola, is more sanguine, arguing that the progress made in the past 10 years means Africa has been ready for some time. She notes that since 2015, the usage gap has shrunk, while the coverage gap has been reduced from around 50% to just 9%, reflecting the industry’s understanding of the challenges around infrastructure development.
“It's very capital intensive, but at the same time, I think the main challenge has been around the return of capital employed. To date, about 70% of the people who have access to this infrastructure - 3G, 4G, 5G broadband - have never gone online. That's where the opportunity is.”
She notes that capacity can be increased relatively easily as it doesn’t necessarily require further build-out; it can be software-defined, or a matter of licensing – but the infrastructure largely exists.
“The goal is to close that 70% usage gap in Africa so that more people can go online, because we need to tackle the barriers of why they're not online, and those include the affordability of the device, which is why we have the coalition around the affordability of a $30 handset, and the minimum specifications on 4G technology.”
Yang Wang, of Counterpoint Research, has a more tempered attitude towards device affordability. “If I look at where the components come from and mentally break apart a smartphone - how much the system on the chip costs, the memory costs, the display costs – US$30 right now is pretty aspirational.”
In the context of Africa, he acknowledges that the transition from 3G to 4G - which is, by extension, feature phone to smartphone – is ongoing if not accelerating. This is having a positive impact, with African operators announcing that they are overachieving KPIs for usage numbers and base station deployments, but even so, scalability remains the issue for low-cost smartphones.
“I’m not saying that companies can't do it; they are, and it's a huge industry”, says Wang. “There are always suppliers that want to tap into this huge market, but can they do so and scale it? If you want to have a sustainable business model, you want to sell in multiple countries - Africa is 54 countries.”
Stealing your chips
However, reaching this scale involves looking to global leaders for displays, batteries, semiconductors etc – and unfortunately for this segment of the market, many of the firms in the supply chain are now pivoting to AI. The players in this sector have vast investment available and are eager for HBM [high bandwidth memory] chips, which is sucking away capacity from the consumer device space as semiconductor manufacturers shift their focus from legacy to advanced memory chips. This forces the hands of even larger manufacturers such as Samsung and Xiaomi, who have to choose between sustaining market share or defending their margins.
Wang notes that these companies typically opt for the latter at the expense of cutting production capacity, which impacts design features and portfolio mixes for mid to low and smartphones. The entry level is likely to be squeezed even further as the unit cost of legacy 4G chips increases, approaching parity with 5G chips – but Wang notes that in the context of semiconductors, this effect is only ever fairly short-term.
“The smartphone supply chain is probably the biggest ever in terms of value, number of players, and materials being exchanged daily between countries and companies - demand and supply signals transmit extremely efficiently. all it takes is a savvy supplier to see [an opportunity to] address this shortage of supply and decide to ramp up production.” This is factored into Counterpoint’s forecasts, so even if semiconductor prices rise until the middle of 2026, the gap will likely be addressed and the market will resolve itself.
Will AI widen the Digital Divide?
Wamola acknowledges that OEMs and device manufacturers are following the trend towards AI, which is driving demand for AI chips, but cautions against allowing this to widen the digital divide further. “Are we OK as a world to let more than half of our population, 3 billion people, remain offline simply because they're unable to afford the current devices that exist? Is there room in production lines to create devices that will help these populations to go online? Because that's the next [generation of] consumers and contributors.”
Wang notes that operators – including those in the GSMA consortium, such as MTN, Airtel and Vodacom – are deploying 4G more widely and seeing data costs fall, which will spur wider data use among consumers. “On the network side, there's positive momentum [in Africa], because one of the biggest constraints was capital investment and how much of the population you can cover with your network. In Africa, it's not urbanised - you have some population centres, [but] the unit cost, the margin, is just a completely different profile than in the developed world.”
Wamola posits that this increased usage will fuel further adoption as users create content in their local language, boosting relevance and bringing online potential users who do not currently see this utility. She notes that of the roughly 2000 African languages, very few are represented online, which restricts access to meaningful content in the age of AI. Bridging this gap will require users leapfrogging from 2G to 4G and eventually 5G devices as they become more affordable.
This is why the consortium makes sense, explains Cofie. “If left to chance, we're not going to see low-income pricing. Half these countries are also increasing taxes on devices, which is interesting at this time. The GSMA in conjunction with these five or six companies - they're trying to bring their next 100 million customers; from a practical boardroom perspective, that's what they need to do to hit their numbers.”
Achieving this growth is certainly possible, says Wang, noting that for Counterpoint, Middle East and Africa have the highest growth rate through the end of the decade. Demand is outstripping supply – and Africa has long been the unaddressed market. Wang highlights how players from other markets, such as China, are now becoming much more active in building their retail channels and networks while working with local players in Africa. “Their home markets are static, and even places like Southeast Asia, Latin America, are growing very modestly. They need to grow, and where else can they look for this? Africa is the last continent to enter the internet age. So that's why there's still some room for growth.”
