Indian Company to Sell $20 Cell Phone

India has already built the world's cheapest car — the $2,500 Tata Nano — and now the country has unveiled the telecommunications equivalent: the $20 "people's phone."

The mobile handset, developed by Spice, the Indian telecoms group that is listed in Bombay and worth $2 billion, is angled at the very lowest end of the market.

This means the phone has jettisoned all "non-essential" features — such as a screen.

"It is just a phone," said Bhupendra Kumar Modi, the Spice chairman, who hopes to sell about 10 million of the low-cost phones in the next year.

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Mobile phones priced under about $40 account for only about a fifth of the global market.

However, with half the world's population yet to make a phone call and Western markets becoming saturated — there are more mobile phones than people in the U.K. — companies see massive potential in budget devices aimed at the developing world.

The telecoms industry expects the number of people owning a mobile phone to grow from 3 billion to at least 4 billion over the next three years.

With the "people's phone", Spice is joining the race to sell handsets to the up-and-coming new generation of Asian, African and South American consumers dubbed "the next billion."

The company will begin selling its people's phone in Asian markets next month. Spice has already suggested prices can be stripped down further, and that a $10 cell phone is not far away.

Cheap products from India are already making waves around the globe, though Western shoppers are likely to have to wait to feel the ripples.

Since the Nano, the world's cheapest automobile, was unveiled last month, its manufacturer, Tata, has been inundated with queries from non-Indians asking whether they can buy "the people's car."

The 33-horsepower two-cylinder vehicle is priced at 1 lakh (100,000) rupees (about $2,500), excluding taxes. The base model will cost about 130,000 rupees on the road — a sum that would buy a stereo system for a BMW.

Tata says it will export the Nano to Britain and other overseas markets eventually — but not for about three years.

Meanwhile, India, the world's fastest-growing market for mobile phones is a prime target for mobile manufacturers.

It is estimated that more than 870 million of India's 1.1 billion population are yet to own a phone. Cellular subscribers in the country are expected to more than double in the next three years, to 500 million.

The remainder of the "next billion" are not being overlooked. Nokia, the world's largest manufacturer, is experimenting with cheap handsets that can be used for mobile banking in Africa.

Motorola, its American rival, has showed off a bicycle-powered device, which it suggested could sell well in China.