| Replicability of a Microfinance Approach to Extending Telecommunications Access |
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| Written by Malathy Knight-John, Ayesha Zainudeen & Abu-Saeed Khan | |
| Sunday, 18 December 2005 | |
 A research report prepared by LIRNEasia associates Malathy Knight-John, Ayesha Zainudeen & Abu-Saeed Khan is now available for download as a PDF file. An Investigation of the Replicability of a Microfinance Approach to Extending Telecommunications Access to Marginal Customers looks at the fundamental problem of access to telecommunications, affordability, and focuses on one of the ‘solutions’ that have emerged in response to this problem -- that adopted by Grameen of Bangladesh. The study examines the replicability of the Grameen model and concludes that the usefulness of the different elements of the model depends on the context in which an access solution is being designed for, and should be adapted accordingly.
Executive Summary This study is an attempt to examine and document particular sets of solutions that have emerged for the extension of telecommunications access to marginal customers in Bangladesh, under the Grameen Village Phone (VP) program. The VP program has been successful in providing access to telecommunications to over 45 percent of the villages in Bangladesh through providing microfinance to villagers to purchase a mobile phone and a GrameenPhone connection, which is then operated as a payphone, providing access to fellow villagers for a charge. This is particularly impressive in a country that had 3.44 telecom (fixed plus mobile) subscribers per one hundred inhabitants in 2004. The VP program has been hailed as a unique case in the development of rural telecom infrastructure. The study looks at the fundamental problem of access to telecommunications, and focuses on one of the ‘solutions’ that have emerged in response to this problem, in specific that adopted by Grameen of Bangladesh. The solution adopted by Grameen, which has also proven to be an extremely successful business model, stems from the organization’s desires to (a) promote development and poverty alleviation through the use of ICTs and (b) increase telecom access to the rural poor. It is examined closely to establish the factors that have contributed to its success, including the roles of microfinance and infrastructure sharing in the approach. The replicability of the Grameen ‘model’ is then discussed, attempting to answer questions such as how replicable is this model? and if so which parts? The conclusion reached, is that whilst the Grameen approach has undoubtedly been successful in terms of delivering results in a particular regulatory and market environment at a particular point in time, changes in telecommunications technology and markets have spurred different solutions to the access problem; such solutions do not necessarily stem from the desire to ensure access to telecom for all, but are apparently successful business models, where sellers of telecom services (including resellers as well as network operators) are able to run a sustainable business. This is not to say however, that certain elements of this approach may still be useful, for example, replication of the Village Phone program in Uganda has drawn from several key design elements of the original Bangladeshi model, with modifications according to the country setting. The key to the sustainability and success of the model is that all the stakeholders benefit from the program. The usefulness of the different elements of the Grameen model, as with many models, depends on the context in which an access solution is being designed for, and should be adapted accordingly. |
