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The GSMA has warned that the world is at risk of developing a new global divide between AI "haves" and "have-nots" unless urgent action is taken to make smartphones more affordable for people in low- and middle-income countries.

Launching its State of Mobile Internet Connectivity (SOMIC) Report 2026, the global mobile industry association said more than 3.4 billion people still do not use mobile internet, even though over 90% of them live within the reach of mobile broadband networks. The organisation argues that without affordable smartphones, these populations will be unable to benefit from advances in artificial intelligence.

The report identifies rising costs for smartphone memory and chipsets as an emerging threat to digital inclusion. According to the GSMA, growing demand for AI infrastructure and data centres has driven up the price of key components, pushing up the cost of entry-level smartphones and making internet access less affordable for lower-income consumers.

The organisation is calling on chipset and memory manufacturers to increase the availability of affordable components for entry-level devices and work with policymakers, mobile operators, manufacturers and international financial institutions to find solutions.

"Artificial intelligence has the potential to improve lives on an unprecedented scale, but AI is meaningless if people cannot get online in the first place," said GSMA Director General Vivek Badrinath.

"The greatest risk is not simply an AI divide between countries, but between people who can afford to participate in the digital economy and those who cannot."

Badrinath warned that many people could be excluded from future digital services before they have even experienced the internet, adding that rising memory prices represent a "clear and present danger" to efforts to expand connectivity.

The report shows that 4.8 billion people now access mobile internet through their own devices, but growth is slowing. Around 160 million people came online in 2025, compared with 190 million the previous year. Meanwhile, 3.1 billion people remain within mobile broadband coverage areas but do not use mobile internet, a phenomenon known as the "usage gap".

The GSMA found that handset affordability remains the biggest obstacle to adoption across surveyed low- and middle-income countries, ahead of limited digital skills. By the end of 2025, an entry-level internet-enabled handset cost the poorest 20% of people in those countries the equivalent of 44% of their average monthly income. In Sub-Saharan Africa, that figure rose to 76%.

Until recently, reducing entry-level smartphone prices to around $30 could have made internet-enabled devices affordable for nearly 1.6 billion people, according to the GSMA. A $20 handset could have brought affordability within reach of approximately 2.2 billion people living under mobile broadband coverage. However, the report says those targets are now increasingly difficult to achieve as component costs continue to rise.

Citing data from Counterpoint Research, the GSMA said memory prices more than doubled between the third quarter of 2025 and the first quarter of 2026, before rising by a further 80% to 90% in the second quarter of 2026. The organisation said the impact is already evident, with entry-level smartphone prices climbing and the global smartphone market expected to experience its largest annual shipment decline on record, driven largely by shrinking demand in the sub-$100 segment.

Emerging markets are expected to be hit hardest.

Beyond digital inclusion, the GSMA warned that the trend could also undermine economic growth. Previous analysis by the organisation suggests that closing the global mobile usage gap could generate an additional $3.5 trillion in GDP between 2023 and 2030, with more than 90% of those gains accruing to low- and middle-income countries.

The report concludes that improving handset affordability must remain a priority alongside efforts to tackle other barriers to internet adoption, including low literacy levels, limited digital skills, safety concerns and a lack of relevant local content.

As governments and businesses increasingly roll out AI-powered services in sectors such as healthcare, education, finance and public services, the GSMA argues that affordable smartphone access is becoming a fundamental requirement for ensuring the benefits of AI are shared widely rather than concentrated among those who can already afford to connect.