Borrowing a page from its emerging market handset strategy, the GSM Association is gearing up to take 3G to the mass market by tendering handset vendors to make a lower-cost handset.
The "3G For All" initiative has been accepting proposals from handset makers for a 3G handset that is cheap enough to drive mass market of 3G without sacrificing functionality.
The proposals will be reviewed by a committee of 12 mobile operators - Cingular Wireless, Globe Telecom, 3, KTF, MTN, Orange, Smart, Telecom Italia, Telefonica, Telenor, T-Mobile and Vodafone - over the next few months. The operators will select a winning handset proposal, which will be announced at the next 3GSM World event in Barcelona in February 2007.
The move us similar to the GSMA's Emerging Market Handset (EMH) initiative, under which two tenders were issued to the handset vendor that could develop a handset that could be mass-produced for under $40 in the first tender, and under $30 in the second. Motorola won both tenders.
GSMA chair Craig Ehrlich said that while handset cost is a chief factor in pushing 3G take-up beyond the high-end tier, the tender won't go to whoever can build the cheapest handset.
"We want them to take a more holistic approach and look at all facets of the phone, like functionality, usability, logistics, market acceptance, target price, service and support, strategic commitment and form factor," he said at a press conference on the first day of the 3GSM World Congress Asia event in Singapore on Monday.
Ehrlich also pointed out that, ideally, the real point of the tender will be to stimulate the handset vendor market in a way similar to the EMH program.
"Between the two tenders that Motorola won, most of the other major handset makers also began working to make low-cost handsets. We're hoping that the same thing will happen with 3G handsets with this tender," he said.
However, the GSMA hasn't set any specific target for a handset price that will trigger mass-market take-up, said GSMA CEO Rob Conway.
"We have a sense of where we want to go, but the object isn't just to create a low-cost handset, so we don't want to set a target," Conway said.