Case Study

Grameen Telecom's Village Phone Programme in Rural Bangladesh: A Multi-Media Case Study

Grameen Telephone: Aiding rural development
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This study was undertaken to investigate the impact of the Grameen Phone and Grameen Telecom provision of micro-credit cellular phone service on poverty reduction and the socioeconomic situation of women village phone operators (VPO) and users at large.

The paper describes Grameen's village phone as:

  • The best available technical solution and organizational solution to rural telecommunication access;
  • A unique combination of revolving loan system with cellular phone loan scheme;
  • A device providing a large consumer surplus and immeasurable quality of life benefits;
  • A device addressing gender issues for the first time in telecom service provision.

The paper further points out:

  • Telecom regulations hinder the use of rural telephone for rural development benefits;
  • Grameen telephones are used mainly for discussing remittances and social calls;
  • Users are willing to pay high rates for overseas calls for financial matters;
  • Grameen Telecom Village Phones bring in three times revenue against urban phones;
  • A family member working overseas is the most important factor determining phone use;
  • Female phone users prefer to use a phone operated by a woman phone owner.

Finally the paper gives recommendations to upscale the project universally:

  • WLL and other options can provide much better bandwidth and cost of service as compared to cellular technology for internet access;
  • Attracting telecom operators and equipment vendors with a solid business case relieving them of researching rural markets;
  • Micro-credit programs tied to the development of Public Calling Office (PCO)-type micro-enterprises to increase rural access to telecommunication systems.

About this Publication

By Richardson, D. & Ramirez, R. & Haq, M.