My kids (7&9) are starting to ask for their own cellphone. Right now, they don't need one. When is a good time for a first phone?
Ideally, when they are old enough to raise enough money, on their own, for buying the phone and paying of the monthly plans.
This will change with the child's lifestyle and community though. A cellphone is a useful way to keep track of where your kids are, and is incredibly useful in emergencies. If you're living in a highly urban area and your children spend significant time unsupervised or in transition, a cheap phone and plan can become a necessity.
My theory is, when a kid needs it, they will get one.
What does needing a cell phone entail? They must be in some kind of a situation that requires it. This can include driving, frequent after school activities, school projects, etc. But if they pretty much just go to school and family activities, then there isn't as much of a need.
Our own thoughts regarding this: when our son is old enough to go to and from school on his own, at which point we'd want him to have one. We've tentatively put this at 12 (but we've reserved the right to push that out further :). He is 8 at the moment and has been asking for a cellphone for about a year.
In 2007 Belgian pediatricians seeked media attention to state that children younger then 16 should not have a cellphone. Here is a description in Dutch Brief translation: Belgian doctors would like to forbid cellphone use by children younger then 16. Although there is no scientific sound proof, they still deemed a warning appropriate. Apparently some study showed an increase in brain temperature in kids. I did a quick google search and found an english page on the matter. When I searched Pubmed I did not find conclusive evidence against cellphone use.
"How old" can't be said in a numerical answer, but rather in terms of maturity. Above all though, if there's no real need for a phone, the child shouldn't have one.
Parents must decide case-by-case, depending on how they thnk the kids will use the newfangled technology. Is the child mature enough to use it in time of need, and not just to gossip with peers?
To minimize cost and bad behaviour, make sure the phone can call and send texts, and nothing else! (At the risk of being teased for only having a stone-age phone.) Cameras, games, etc. are dangerous distractions to young minds.
... and remember, we all grew up without cell phones and we managed fine anyway.
When their privileges dictate a need for one. I would say when you feel your children are mature enough to be allowed to do certain events without adult supervision, or events a substantial distance from you, get them a phone to use during those events. These events could be hanging out at the mall or participating in after school events, either way this gives the initial impression that a phone is a tool and not a toy. Then from that point progress to full time phone possession as you see fit.