A new GSMA report shows that 3.4 billion people remain offline despite being within broadband mobile coverage because the rising cost of smartphone components has made phones unaffordable for the world’s poorest populations.
The global telecom industry body GSMA has called for urgent action to make smartphones more affordable for residents of low- and middle-income countries so that everyone can benefit from the "AI revolution."
The call coincides with the release of the State of Mobile Internet Connectivity 2026 report (source in English), the annual study on mobile connectivity worldwide.
The report finds that 4.8 billion people now use mobile internet on a personal device, but 3.4 billion do not have that possibility, while 90% of them live in areas with mobile broadband coverage. GSMA calls this situation the "usage gap."
The growth of the world’s digital population is also slowing, with about 160 million new users coming online in 2025, compared with about 190 million in 2024.
Viv Badrinarayanan, Director General of GSMA, explained the report saying: "AI has the capacity to improve lives at an unprecedented scale, but if people cannot get online in the first place, AI will be meaningless."
He added: "The greatest risk is not simply an AI divide between countries, but the gap between those who can participate in the digital economy and those who cannot."
GSMA says it is important to "prevent a large portion of the population in emerging economies from being left out of the digital economy entirely" and proposes a set of measures to that end.
Expanding the usage gap
According to the report, one of the main drivers deepening global digital inequality is "the sharp rise in the cost of memory and smartphone chips, driven by global demand for AI infrastructure and data centers."
Memory prices have surged in recent months, more than doubling between Q3 2025 and Q1 2026, and rising a further 80–90% in Q2 2026.
This increase in component costs is ultimately passed on to consumers and has made the price of entry-level smartphones unaffordable for many people worldwide. GSMA says this trend threatens years of progress in closing the "mobile usage gap."
Badrinarayanan said: "If affordability of entry-level smartphones is not maintained, billions risk being excluded from the next generation of digital services before they even have the chance to experience the internet."
The report shows that by the end of 2025, the price of an entry-level smartphone represented up to 44% of the monthly average income for the poorest 20% of the population in low- and middle-income countries, rising to 76% in sub-Saharan Africa, and prices are expected to rise further.
GSMA believes that the sharp jump in smartphone prices will result in the "largest annual recorded decline" in global shipments of these devices, with emerging markets the most vulnerable.
Closing the digital divide
To address growing digital inequality, the organisation has asked manufacturers to bring the price of entry-level smartphones down to $30; GSMA believes this could make devices accessible to nearly 1.6 billion people, and a $20 price point would make them affordable for about 2.2 billion people who now live within mobile broadband coverage.
The body has also urged chip and memory manufacturers to "take effective steps to increase the supply of low-cost components for basic phones"; a move that GSMA says could help handset makers offer their entry-level devices at lower prices.
GSMA also recommends addressing "other major barriers to digital inclusion," including "low levels of digital literacy and skills, safety and security concerns, and the lack of relevant content and services."