Page 131 - ITU-T Focus Group Digital Financial Services – Technology, innovation and competition

ITU-T Focus Group Digital Financial Services
Technology, Innovation and Competition

Poor power output and antenna design in some of these devices may reduce the user experience. While
feature phones with more connectivity options are replacing basic phones worldwide.

Feature phones are a midway design point in phone functionality. They are the
most common phone type worldwide: in the developing world, basic and feature
phones make up around 70% of the phones used. They have small non-touch
5
displays of median size of 2.7”.
They have limited functionality and proprietary operating systems designed by
either the manufacturer of the phone, or as part of an operating system designed
by the primary component maker.

Most produced after 2008 have Bluetooth, WAP-based phone browsers, and (in
many cases) an ability to install and run Java applets and applications, a camera,
and primarily use narrowband 2G EDGE/EDGE+ speeds for mobile data access.
Only a few feature phones produced since 2014 support 3G (or 4G) and their
variants. This is to reduce the price point for the devices. Very few support NFC.

Smartphones offer a better user interface than used on basic and feature phones, as well as providing more
bouquets of service offerings, for example agent mapping data. Entry-level smartphones being sold in emerging
markets are at feature phone-level pricing of around US$30, although many are low-end varieties running
6
older versions of Google’s Android mobile phone operating system and may not have 3G capabilities to save
7
on costs.
8
Lower and mid-range smartphones also use lower quality, high battery consumption displays, while higher
end devices use power-sipping and higher-resolution displays. 9

3 Phone statistics

Smartphones are growing in penetration, but are not yet the plurality
in the developing world. Adoption in the East African Community (EAC)
is 17%, and 24% in the Southern African Development Community
(SADC).
Feature phone use is higher in urban areas than rural areas. South
Africa and Nigeria, markets characterized by significant levels of
urbanization and competition, there is better supply chain capabilities
for rural markets, which has led to increases in smartphone penetration

5 GSMA (2015) From Feature Phones to Smartphones, The Road Ahead, available at: https:// www. gsmaintelligence. com/ research/
2015/ 01/ from- feature- phones- to- smartphones- the- road- ahead/ 456/
6 Plus any local taxes.
7 GSMA (2015) ibid
8 See further Perlman (2016) ibid. Handset manufacturers usually pay royalties for certain declared-essential patents for cellular
and other standards. However, recent estimations by Galetovic and Haber are that there could be high evasion of payment by
especially feature phone manufacturers. See Galetovic, A and Haber, S (2016) A New Dataset On Mobile Phone Patent License
Royalties, available at http:// hooverip2. org/ wp- content/ uploads/ ip2- wp16011- paper. pdf
9 Usually thin, Active Matrix OLED displays.

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