"Effective communication is one of the key catalysts for economic growth. The GSMA is bringing together operators and vendors to address the affordability issues of mobility in emerging markets," said Craig Ehrlich, Chairman of the GSM Association. "The next phase of our initiative aims to drive even greater affordability, through sustainable products, at even lower cost than the first phase of the programme. At the right entry level we believe there is the potential for over a hundred million new connections per year."

Open to handset manufacturers worldwide, the result of the selection process will be announced at the 3GSM World Congress Asia in Singapore at the end of September*, with new handsets expected to be available from Q1 2006. The objective for the second phase is to achieve a sub US$30 handset price-point, with a similar volume target as the first phase of six million handsets within the first six months.

The process is being managed by Arve Johansen, CEO Telenor's International Mobile & GSMA Board sponsor of the Phase 2 steering committee and Erik Aas, CEO of Telenor-owned GrameenPhone in Bangladesh and chair of the committee, which comprises GSM operator networks serving emerging markets1.

"Operating in developing markets means that we are dealing with the challenges on a day-to-day basis," said Erik Aas. "We must ensure that the realities of the issues faced by developing countries are addressed. This programme seizes the initiative and pushes the potential - we are making the market happen."

The GSMA's determination to create a sustainable Ultra-Low Cost handset segment has ignited huge global support. Motorola won an initial supply tender earlier this year, and is already on target to meet the programme's anticipated volume of six million units.

The Ultra-Low Cost handset programme forms a major part of the GSMA's Emerging Markets Initiative. Although 80 per cent of the world's population has wireless coverage, today's 1.3 billion GSM users represent only 25 per cent of the potential.

"The triumph of the first Ultra-Low Cost handset supply tender, which designed cost out yet maintained margin in order to ensure sustainability, has proved that we are beginning to remove the barriers of ownership for the people who will arguably get the most benefit from mobile communications," said Rob Conway, CEO and Board member of the GSMA.

"The price of the handset is only one hurdle," said Conway. "We are also pushing hard for further positive changes that can be effected by governments, such as more flexible regulatory decisions and a more favourable approach to taxation. In addition, we are encouraging innovative payment mechanisms that could further positively reduce the barriers to ownership."

The following GSM operators comprise the steering committee for the second phase EMH programme supply tender - others are expected to confirm participation shortly:

AIS - Thailand

Bharti - India

BPL - India

BSNL - India

Globe Telecom - Philippines

GrameenPhone - Bangladesh

Hutchison Essar- India

IDEA - India

MTN - South Africa, Rwanda, Uganda, Swaziland, Cameroon, Nigeria

MTNL - India

Orascom - Algeria, Bangladesh, DRC, Egypt, Iraq, Pakistan, Tunisia

Telenor - Russia, Ukraine, Thailand, Bangladesh, Pakistan

Vodacom - South Africa, Congo, Lesotho, Mozambique, Tanzania

1Participation is open to any operator that meets the definition of operating in an emerging market. This is defined as any country that is below the average in the World Bank's GNI (GNP per capita index) and has mobile penetration below 60%.

*The 3GSM World Congress Asia - featuring an Emerging Markets "Show Within a Show' - takes place from 26-30th September 2005 at the Suntec International Convention & Exhibition centre, Singapore. Please visit www.3gsmasia.com for further information.

About the GSM Association:

The GSM Association (GSMA) is the operator-led trade association representing the global mobile industry. Encompassing technical, commercial and public policy initiatives, the GSMA focuses on ensuring wireless services work globally, thereby enhancing the value of mobile services to individual customers and national economies while creating new business opportunities for operators and their suppliers. At the end of 2004, the Association embraced more than 660 operator members serving more than 1.3 billion customers across 210 countries and territories. More than 150 manufacturers and suppliers support the Association's initiatives as key partners. The GSM community accounts for 75% of the digital mobile phone market worldwide.