AI Boom Could Deepen Digital Divide

The GSMA has issued a warning that escalating smartphone component costs, fueled by the massive demand for AI infrastructure, risk widening the global digital divide and making mobile internet increasingly unaffordable in low- and middle-income countries (LMICs). According to the GSMA's State of Mobile Internet Connectivity Report 2026, which incorporates data from Counterpoint Research, memory prices more than doubled between the third quarter of 2025 and the first quarter of 2026, followed by a further surge of 80% to 90% in the second quarter of 2026.

This price spike is directly impacting the cost of entry-level smartphones, and the industry association warns that these higher prices could stall progress in closing the mobile internet usage gap. While the report found that 4.8 billion people now use mobile internet on their own devices, growth slowed to approximately 160 million new users in 2025, down from 190 million in 2024. Furthermore, 38% of the global population—roughly 3.1 billion people—live in areas with mobile broadband coverage but do not utilize it; notably, 70% of this usage gap consists of individuals who do not own a device, while another 650 million access the internet only through shared or borrowed hardware.

The GSMA predicts that global smartphone shipments are set to experience their most significant annual decline on record, primarily due to the collapse of the sub-$100 smartphone segment, with emerging markets expected to be hit the hardest. Handset affordability remains the primary barrier to mobile internet adoption in LMICs, followed by digital literacy and skills. By the end of 2025, an entry-level internet-enabled device cost the poorest 20% of the population in LMICs an average of 44% of their monthly income, a figure that climbed to 76% in Sub-Saharan Africa.

The study suggests that, until recently, reducing entry-level smartphone prices to $30 could have made devices accessible to nearly 1.6 billion people, while a $20 price point could have reached 2.2 billion. However, rising memory costs have now made these targets nearly impossible to achieve. Consequently, the GSMA is calling on chipset and memory manufacturers to increase the availability of affordable components while urging operators and policymakers to support initiatives like device reuse.

“AI has the potential to improve lives on an unprecedented scale. However, it is meaningless if people cannot get online in the first place. Unless we protect the affordability of entry-level smartphones, billions of people risk being excluded from the next generation of digital services,” warned GSMA director general Vivek Badrinath.