United Kingdom
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I don't think the network effect is the only factor to consider here. Kids are at real risk of social ostracization and bullying by their peers if they do not have a smartphone. And that's dangeous in of itself.
I'm not sure if the dangers of being ostricised and bullied are more significant than the dangers presented by owning a smartphone. Either way, I don't think it's a simple decision for a parent to make.
I think that qualifies as being a severe network effect. Point taken though. In those cases would recommend the parents spend 5 minutes configuring the parental controls before handing the phone over.