Sales of low cost mobile phones will rise 22 percent by 2014, according to Juniper Research. Global sales of the sub-$60 units will reach over 700 million by that period. The two largest areas of growth will be in Africa/Middle East and the Indian subcontinent. “[D]espite – and perhaps because of – the current global economic downturn, operators, handset vendors, and national government agencies alike see great financial, social, and economic benefits arising from any schemes that are adopted to help ‘connect the unconnected,’” according to the report.

Various estimates have the global mobile-less population at anywhere from 2.5 million to 4 million. Total cost of ownership (TCO) of mobile phones and services remains far too high for many areas and populations, limiting adoption.

Offering low cost mobile phones in areas that are poverty-stricken, politically unstable and have low population density rates would reach a population of approximately one billion new mobile users.

“The key [. . .] appears to lie in drastically reducing the cost of the handsets that would be used by these low-income users,” according to the report.

Several low-cost initiatives have already been implemented in emerging economies, with ultra-low budget phones retailing for $10 to $15 dollars in the Middle East and Africa.

Nokia is calling for the development of ultra-low cost (ULC) $5 handsets “to meet the basic communications and information requirements of some of the poorest people in the world,” according to the report.

Nokia believes that entry-level phones, those selling for $60 or less, grew 35 percent in 2008, from representing 35 percent of the total market in 2007 to 45 percent last year.

There were 535 million entry-level phones sold in 2008, but only a tiny portion of these sales were ULC handsets.

By Mark Alvarez