Beyond Coverage: Device Costs Emerge As Main Barrier to Nigeria’s Internet Growth, AI Adoption 

…Supply Chain Shocks Cutting Off Nigerian Users

The skyrocketing demand for high-performance memory chips and processors for AI data centers is driving up component prices, threatening to push entry-level smartphones beyond the reach of millions of citizens.

In its newly released State of Mobile Internet Connectivity Report 2026, the Global System for Mobile Communications Association (GSMA) warned that handset affordability remains the primary barrier to mobile internet adoption across low and middle-income nations.

While network coverage spans vast portions of Nigeria, the physical bridge to the digital economy, an affordable smartphone is becoming increasingly out of reach for average households.

The Anatomy of the Price Surge
The surge in memory and chipset costs has reached unprecedented levels, disrupting the production of budget devices:

Memory Cost Spike: Memory prices more than doubled between Q3 2025 and Q1 2026, followed by an additional 80% to 90% jump in Q2 2026.

Shrinking Budget Market: The rapid cost increases are threatening the sub-$100 smartphone market, which serves as the entry point for most low-income consumers in emerging markets.

Global Usage Gap: Globally, 3.4 billion people live in areas covered by mobile broadband but remain offline, primarily because they cannot afford an internet-enabled device.

Nigeria’s Reality: Income vs. Digital Survival
For Nigerians, the GSMA’s findings reflect a severe everyday reality. In Sub-Saharan Africa, the poorest 20% of the population spends an average of 76% of their monthly income to acquire a basic entry-level smartphone.

Accessibility Barrier in Numbers

In a country where persistent inflation continues to reduce household purchasing power, spending money on a digital device competes directly with basic survival needs like food, transportation, and utility bills.

Industry experts once hoped to lower basic smartphone prices to $20 or $30, which would have helped more than 2.2 billion people get online. However, sudden cost increases in the tech supply chain have made those low prices almost impossible to reach today.

“AI is Meaningless Without Access”
Speaking on the growing divide, GSMA Director-General Vivek Badrinath stressed that the rapid evolution of artificial intelligence risks widening inequality if foundational access is ignored.

“AI is meaningless if people cannot get online in the first place,” Badrinath stated. “Unless we protect the affordability of entry-level smartphones, billions risk exclusion from the next generation of digital services.”

Badrinath noted that closing the global mobile usage gap could generate $3.5 trillion in additional global economic output between 2023 and 2030, with over 90% of those benefits accruing to developing nations like Nigeria.

The Path Forward
To prevent a deepening digital divide, the GSMA is calling for urgent, coordinated intervention across the tech and policy ecosystem:

Policy and Tax Adjustments: Governments should consider lowering import tariffs and taxes on basic internet-enabled devices to offset manufacturing cost surges.

Supply Chain Engagement: Memory and chipset manufacturers must collaborate with mobile operators and financial institutions to support affordable component pipelines.

Refurbishment and Reuse: Expanding formal device-refurbishment and trade-in programs can provide low-income consumers with reliable alternatives to brand-new units.

Holistic Ecosystem Growth: Stakeholders must pair device access with localized content, digital literacy training, and micro-financing options.

Without decisive action from policymakers, manufacturers, and telecom operators, Nigeria risks seeing millions of its citizens disconnected from essential digital services, online education, financial inclusion, and modern public infrastructure.

Reporting by Theresa Igata