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1 Ichiro Tambo Advisor on Science & Technology Development Co-operation Directorate OECD Grameen Village Phone Lady Community Telecenters As Community Telecenter in Rural Bangladesh International Seminar on ICT Policy Reform and Rural Communication Infrastructure 23 August – 1 September 2004, Japan
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2 Q1: Bangladesh: what is the general situation? The people’s Republic of Bangladesh South Asia, N-W India, E-India & Myanmar, S- Bay of Bengal Area: 47,570 sq Km Capital city: Dhaka Population: 135.6 million Religion: M-88%, H-10.5%, C-0.3% 2002/2003 GDP: US$ 52 billion (US$ 388/per capita-annum) Main productions: jute, tea, textiles, garments, paper, fertiliser, leather and its goods, sugar, cement, fish processing, pharmaceuticals.
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3 Q2: What is the situation of the telecom sector? 5 Operators Fixed-line-BTTB Mobile-GrameenPhone, Aktel, Sheba and City Cell Teledensity in South Asia, 2002 Source: World Telecommunication Development Report, ITU, 2003
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4 Q3: What is the Village Phone Programme? Administered by Grameen Telecom, not- for-profit company Brief Business Model: A person, usually women, buys a telephone handset and subscription Grameen Bank provides the person with necessary financing She retails phone services to villagers Through retailing, she pays off her loan and makes a living She benefits from a tariff discount system.
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5 Q4: What kind of partnership is involved? Programme Administration: Grameen Telecom Telecom Service Provision: GrameenPhone Ltd. Micro credit and Support: Grameen Bank
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6 Partnership of GrameenPhone Ltd. GP mobile phone subscribers in Bangladesh GrameenPhone (for-profit) “Village Phone” programme (Operators or VP ladies) Telenor AS Marubeni IFC Asian Development Bank CDC NORAD (NORFUND) Debt Financing Supp ort - Programme management - Training of operators - All service related issues Microcredit Grameen Bank (for-profit) Tariff Discount Mobile phone and related services Soros Foundation 51% 9.5% 4.5% Gonofone 35% Equity investment Grameen Telecom (not-for-profit) Debt Financing
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7 Q5: What is the role of Grameen Telecom? Programme Management Training of Village Phone Ladies (operators) All service-related issues supported by Grameen Bank and its family organisations
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8 Q6: How does the tariff discount work? * Invoices are translated in Bangla by Grameen Telecom Phone Service GrameenPhone Ltd Purchase of air time at discounted rate (50%) Billing * Billing Aggregate PaymentPhone Bill (50%) + Commission (15%) Tariff at market rate (100%) Grameen Bank Branches Village Phone Operators Phone Users in villages 45,000 operators in approx. 39,000 villages Aggregate Monthly payment 70 million people in rural areas have access Grameen Telecom Tariff Discount System
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9 Q7: Is this discount system sustainable? VP Ladies: business opportunity GrameenPhone: guaranteed revenue / no extra cost Grameen Telecom: Cost recovery / no subsidy Phone users: no physical trips / market rate phone
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10 Q8: How does the Village Phone lady make money? Revenue Cost /Profit Phone bill paid to Grameen Telecom (50%) Commission paid to Grameen Telecom (15%) Marginal Profit (35%) Instalment to Grameen Bank Net profit Phone User Village Phone Operator Tariff at Market Rate (100%) Cost Structure for Village Phone Operator
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11 Q9: What is the Programme Management Policy? Strict rules of the programme Sequential approach in villages Monopoly Competition
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12 Q10: How is extensive service coverage provided? 1,800 Km fibre optic backbone Continuous increase in the number of base stations Strong emphasis on operational excellence and efficiency
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13 Coverage
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14 Q11: Can this be replicated elsewhere? MTN Village Phone in Uganda Success factors? Other replication initiative in Latin America
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15 Q12: What are the lessons learned? Creative partnerships can expand infrastructure services beyond profitable areas Strong leadership and ownership of the local partners are critical Synergies between business objectives and development goals are possible.
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16 Thank You ! Ichiro Tambo Advisor on Science & Technology Development Co-operation Directorate OECD ichiro.tambo@oecd.org http://www.oecd.org/dac/ict
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