Final Documentation

Grameen Village Phone, 2000

    In 1999, the Soros Economic Development Fund (co-financing with the IFC) made a $10.6 million dollar long-term loan to Grameen Telecom-- a large-scale market-based development to build rural telecommunications infrastructure-- to extend its system into the villages of Bangladesh .This paper will reflect on market development outcomes due to the ICT services provided by Grameen Telecom. We will look at the reality of Bangladeshi village economy as the context for which this market intervention has been designed and implemented. In particular, we will look at 1) the demand for telecom services and 2) the willingness and ability to pay for such services. Next we will look at 3) the ultimate providers of services (Grameen Bank borrowers operating mobile phone services) to better understand how they operate their businesses, and 4) to what extend these new entrepreneurs could benefit from additional business development services (if such were available) to improve efficiency and profitability. Then, 5) we will analyze the business clients of the mobile phone providers to understand how they use the phones for operating their usinesses, and to assess what value added the phones bring to their businesses. Finally, 6) we will study the village development in general to capture the changes that the phone brings to the village market place, in particular whether new businesses are created as a result of mobile phones availability. Grameen Telecom occupies a unique position as, effectively, the "only game in town" in the rural ICT market of Bangladesh. It is, however, facing significant challenges, both from competitors and, most significantly, from political forces, and therefore is developing more slowly than expecting.

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