GSMA says smartphone costs could deepen the coming AI divide

A new GSMA report warns that the rush to develop artificial intelligence could create a new digital divide, making mobile internet more expensive for low-income people. Over 3.4 billion people still lack mobile internet access despite living within coverage areas, according to the report. The main barrier is handset affordability, with entry-level smartphones costing up to 44% of the average monthly income for the poorest 20% in low- and middle-income countries.

This can be a decision between connectivity and basic household necessities. While 4.8 billion people use mobile internet on their devices, growth is slowing, with only 160 million new users added in 2025. The demand for AI infrastructure, including data centers and chips, has driven up the cost of memory and other components used in smartphones.

This has led to rising prices for entry-level devices, affecting those who need them most. The report highlights the need for affordable components and collaboration among stakeholders to prevent further squeezing of the low-end smartphone market. Southeast Asian countries should take note, as many face similar affordability challenges and are working on digital identity systems, e-payment networks, and AI-assisted public services.