BANGALORE: Technology advances announced by Infineon earlier this week have cleared the way for mobile phone-makers to produce basic handsets with voice and simple messaging capability, for $20 or less.

The German semiconductor maker has created a "reference design" — industry jargon for a working prototype — which harnesses a single chip to perform most of the functions of a Global Services Mobile (GSM)-cell phone and halves the total number of components that go on the circuit board to less than 100. The entire electronic package can be accommodated on a board measuring 3 cm by 3 cm — which holds out the hope that any emerging design would also boost the talk time to about four hours by releasing more space for batteries.

Infineon may not be alone — for long.

Earlier this year the U.S.-based Texas Instruments announced its own single chip mobile phone solution — with key contributions to the design known to have come from its India-based development centre in Bangalore. And on June 29, Dutch electronics giant Philips announced that it had developed the electronic package that will allow a mobile phone to be not just manufactured, but also sold for $20 and for $15 by end of 2008.

Hope

For India this means there is real hope that a handset for Rs. 1,000 or less could well be on the shelves by year-end. The sub-Rs. 1000 phone breaches a long-standing `Lakshman Rekha' in affordability, that is just as significant as the sub-Rs. 10,000 personal computer.

Of the 105 million who own a phone in India, 58 million are `mobile,' while 47 million are tethered to a landline. Union IT Minister Dayanidhi Maran's target — 500 million phones in use within five years — announced in Bangalore on Friday, while inaugurating the new facilities of optical networking player Tejas, will require a sharp fall in the cost of ownership for millions of Indians in the rural heartland.

A handset at Rs. 800-900 may be just the trigger to accelerate phone penetration.

The global push may come in September, when the GSM Association (GSMA), which represents most of the world's cellular telecom players, hold its 3GSM World Congress in Singapore.

Under an Emerging Markets Initiative, the association has invited its members to form strategic partnerships that would aim at creating ultra low-cost handsets specifically tailored for rapidly developing markets such as India, China and Africa. Motorola was the first mobile phone maker to take up the GSMA challenge: it launched a model in India earlier for around Rs. 1,400 making it the cheapest handset in the market.

50-nation study

According to U.K. weekly The Economist, GSMA hopes to complete in time for the Congress, a 50-nation study, which is expected to show that by slashing taxes to almost zilch, governments will in fact join with the mobile industry in a win-win situation.

That might well force India's IT and Finance Ministers to make common cause and ensure that at least one in two Indians can afford a mobile device to help improve one's quality of life by the end of this decade.

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