The ZTE Open smartphone goes on sale in Spain this week for 69 euros (about $90) and will soon be available in several Latin American countries.
The device is aimed at the youth market and at people who are new to smartphones, Telefonica's chief of product development, Carlos Domingo, said during a Madrid press conference where he was joined by executives from Mozilla and telephone-maker ZTE.
Equipped with a 3.5-inch 480x320p touchscreen, the ZTE Open includes a 3.2MP camera, 256MB RAM and 512MB flash memory enhanced with a 4GB microSD card that comes as part of the package.
The purchase price includes 30 euros ($39) of pay-as-you-go credit.
The ZTE Open is fully integrated with Facebook and the Spain-based social network Tuenti and talks are on about incorporating the WhatsApp instant messaging service, Telefonica said.
Mozilla executives said the ZTE Open is the "first chapter" in what they expect to be a long project, one that is already attracting interest from many other telecommunications companies.