The global push to make AI widely accessible risks deepening existing digital inequalities, as rising memory and chipset costs threaten to put internet-enabled smartphones beyond the reach of billions in emerging markets, according to GSMA.
In its State of Mobile Internet Connectivity 2026 report, the mobile industry body noted that 3.4 billion people still do not use mobile internet. Network coverage is not the issue as more than 90 percent of them live in areas already covered by mobile broadband. Affordability and adoption remain the main barriers.
Asia accounts for a significant share of the global usage gap. India has around 710 million people living within mobile broadband coverage but are not using mobile internet, followed by China (200 million), Pakistan (140 million), Bangladesh (120 million), and Indonesia (110 million).
The usage gap across Southeast Asia narrowed more slowly in 2025. Growth in mobile internet adoption in the region fell from six percent in 2024 to two percent in 2025, bringing it in line with other regions.
“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 Vivek Badrinath, Director General of GSMA. “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.”
Memory costs threaten affordability
The report linked the affordability risk to surging demand for memory used in AI infrastructure and data centres. Memory prices more than doubled between Q3 2025 and Q1 2026, before rising by a further 80 to 90 percent in Q2, according to GSMA analysis of Counterpoint Research data.
The increases are affecting smartphone manufacturers’ bills of materials. Memory now accounts for almost half the bill of materials of a low-end smartphone priced below US$200, compared with 12 percent in Q1 2025.
The impact is already visible in Asian markets. Xiaomi’s Redmi A7, launched in April 2026 at around US$110, was 40 percent more expensive than its predecessor despite having almost identical hardware.
In India, Realme C71’s price rose from INR7,699 (about US$80) at launch to INR12,999 (about US$135), an increase of almost 70 percent.
GSMA expects global smartphone shipments to fall 14 percent in 2026, representing the largest annual decline in the market’s history. Shipments of smartphones priced below US$100 are forecast to fall 36 percent with emerging markets expected to bear the brunt of the decline.
Asia’s connectivity gaps persist
The report found that 4.8 billion people (59 percent of the global population) used mobile internet on their own device in 2025. However, growth is slowing as about 160 million people began using mobile internet during the year, down from 190 million in 2024.
East Asia and the Pacific recorded mobile internet adoption among 79 percent of the population, creating a 20 percent usage gap and a one percent coverage gap. South Asia had a 46 percent adoption rate while 51 percent of the population lived within mobile broadband coverage but did not use mobile internet.
The regional disparities are also visible within countries. In India, the rural-urban gap in mobile internet use widened from 13 percent in 2024 to 21 percent in 2025. In Bangladesh, the gap increased from 32 percent to 41 percent as adoption in urban areas grew faster than in rural areas.
Women remain disproportionately affected. Women in low- and middle-income countries were 12 percent less likely than men to use mobile internet in 2025, representing around 200 million fewer female users. Women accounted for 58 percent of the adult usage gap across these countries.
In South Asia, only 59 percent of adults used mobile internet on their own device, while 23 percent remained within the usage gap. Women represented 60 percent of the region’s adult usage gap.
Affordability the main barrier
By the end of 2025, an entry-level internet-enabled handset cost the poorest 20 percent of people in low- and middle-income countries 44 percent of their average monthly income. The figure was 58 percent in South Asia and 76 peercent in Sub-Saharan Africa.
GSMA calculated that reducing the price of entry-level smartphones to US$30 could make devices affordable for almost 1.6 billion additional people. A US$20 price point could extend affordability to around 2.2 billion people currently living within mobile broadband coverage.
However, the report cautioned that the AI-driven increase in memory costs is making those price points increasingly difficult to achieve.
“Unless we protect the affordability of entry-level smartphones, billions of people risk being excluded from the next generation of digital services before they have even had the opportunity to experience the internet,” said Badrinath. “The current memory price increases make this a clear and present danger.”
GSMA called on chipset and memory manufacturers, mobile operators, device makers, policymakers, and financial institutions to work together to improve the supply of affordable components and devices. It also urged governments to use production, distribution and taxation measures to ease pressure on entry-level handset prices.
The stakes extend beyond smartphone ownership. GSMA analysis estimates that closing the global mobile internet usage gap could generate US$3.5 trillion in additional gross domestic product between 2023 and 2030, with more than 90 percent of those gains flowing to low- and middle-income countries.
Entelechy Asia 