A barrier to 3G adoption has long been the price of the phone itself. However, LG has been selected as a winner of a contest to produce a low-cost handset that would retail for about $100 and operate on GSM Networks.

The contest, sponsored by the GSM Association, was judged by some of the worlds biggest operators using the technology, including AT&T, Globe Telecom, Hutchison 3G, KTF, MTN, Orange, Smart, Telecom Italia, Telefonica, Telenor, T-Mobile and Vodafone.

LG could see several millions in orders for the winning handset once it is announced at the 3GSM Mobile Communications Conference in Barcelona next week. Any member of the GSM Association would be eligible to order the handset.

Winning the contest could also prove to be a boon for LG's own business. The company experienced sluggish growth last year and lost footing to larger rivals such as Nokia and Motorola. The company is currently fifth worldwide, and is known more for its CDMA handsets.

Not everybody is cheering the results. One analyst said that accelerating the "cheap 3G handset" would only erode profit margins in the end. But carriers are stuck between a rock and a hard place: after spending billions on 3G services, adoption has been far slower than initially anticipated.

However, others pointed to the fact that the company's GSM portfolio is still sorely lacking, and winning the contest could open new markets for the company and help build market share.

Both the GSM Association and LG declined to comment publicly.