MTN Group, a South Africa-based carrier, on Thursday confirmed that it has dispatched a team of engineers to China to source mobile phones that the company can sell for $10 in Africa, one of the world’s fastest growing mobile markets.
If the engineers are successful, MTN and its supplier will set a jarring new price floor for mobile handsets, just two weeks after Nokia announced its intention to market a $32 phone, the company’s least expensive to date. (Nokia Unwraps $23 Phone)
Nokia has the largest share of the mobile handset market in most parts of the developing world, but Chinese handset makers such as ZTE have been eating into its share, particularly in Africa.
And African carriers are becoming more aggressive about seeking bargain phones to market under their own brands.
“MTN is investigating the possibilities in introducing ultra low cost devices that will break new industry price points as a means of fast-tracking mobile telephony accessibility on the continent,” said Bridget Bhengu, spokeswoman for MTN.
MTN operates in 17 countries in Africa including Ghana, Nigeria, and South Africa, and four countries in the Middle East including Iran, Afghanistan, and Yemen.
MTN’s engineers also will be looking for higher-end smartphones that it can retail for about $40.
“By removing handset cost barriers that remain traditionally higher than expected, MTN will be able to interconnect as many people in its region as possible,” Ms Bhengu said.
According to numbers gleaned from multiple research sources, more than 300 million Africans own mobile phones. With a population of more than 922 million people, Africa’s penetration is about 30 percent.
By comparison India with a population of 1.1 billion people has 143 million cell phone users, and China with a population of 1.3 billion has 449 million cell phone users.
Despite many logistical, commercial, and political complications, Africa represents an untapped opportunity for mobile handset makers and carriers.
In May, India-based telecom company Bharti Airtel offered to pay $19 billion for a 51 percent stake in MTN before that deal fell through.
And recently Vodafone, the world’s largest carrier, agreed to pay $2 billion for a 15 percent stake in Vodacom, South Africa’s largest mobile carrier. (Vodafone Wants $2.5B Stake in Vodacom, Vodafone Moves to Control South African Carrier)