Mobile Phones Making Money in Bangladesh

Posted by Bonnie Bogle on Jun 11, 2006

Cell phones have added $650 million to Bangladesh’s gross domestic product (GDP) and created almost 240,000 jobs in the country. On top of that, most of the jobs pay significantly more than the average job, a recent study by the international firm Ovum found. Grameen Phone, and its Village Phone program, should be given a lot of credit for this.

Grameen Phone
is currently the largest mobile phone company in Bangladesh with seven million subscribers in April. The telecom company itself is a for-profit operation but has a nonprofit arm that works with the microfinance giant the Grameen Foundation to get mobile phones to people living in poor, rural areas. How the Village Phone program works is that select members of Grameen’s micro-banks, usually women who have proven their ability to work and repay loans, use a small loan from Grameen to purchase a mobile phone. Often times this is the first working phone the village has ever had. The women then turn the mobile phones into businesses, charging fellow villagers a fee to make calls. Essentially this makes each owner of a Village Phone the head of a small, mobile call center.

Since the program started in 1997, it has been very successful. As of last month there were 200,000 Village Phone subscribers that are providing communications access to an estimated 60 million people living in rural Bangladesh. Affordable communications access has helped local economies and improved the standard of living. Business owners can call to find out market prices, rather than relying on a middleman. Mothers can call and ask medical questions and save a time consuming and expensive trip into town. Families can stay in touch even when they live in different towns and countries.

Because of the program’s success in Bangladesh, the Grameen Foundation has replicated it in two other countries – Uganda and Rwanda. Hopefully these programs will see similar economic and social gains. In Bangladesh, the mobile phone industry shows no signs of slowing down. Even with the rapid expansion of the industry and nearly full coverage over the country, only seven percent of citizens own a mobile phone.

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