1. Introduction:

Grameen Telecom (GTC) is a company dedicated towards extending the benefits of the information revolution amongst the rural people of Bangladesh. Currently GTC provides the GSM 900 cellular mobile phones to the villagers. Our corporate vision is to provide telecommunication services to the 100 million rural inhabitants in the 68,000 villages in Bangladesh.

Grameen Telecom is a not for profit company set up at the initiative of Professor Muhammad Yunus. Grameen Telecom holds 35% share of GrameenPhone Ltd., the company which was awarded a nationwide license for GSM 900 cellular mobile phone services. The Company is entrusted with the responsibility of providing telecommunication services in the rural areas in Bangladesh and also acts as a sales agent for mobile phones for individual urban subscribers. Our basic objective are to ensure universal telecommunication access for the villagers and provide other value added services.

Grameen Bank plays a vital role in implementing and expanding the Village Phone program. It provides necessary organizational & infra-structural support to Grameen Telecom towards selecting the Village phone operators from amongst its members and also by collecting the phone bills. GB happens to be the first 'point of contact' towards problem resolution related to the "Village phone program " by acting as the conduit between the Village phone operators and Grameen Telecom, on as and when required basis. Based on this available infra- structural support, Grameen Telecom plans to establish one unit Office to support and service 300 Village phones.

2. Village Phone (VP) : The Basic Concepts:

The "Village Phone" concept was developed by combining Grameen Bank's experience with the village based micro-enterprises and the latest digital wireless technology and the well tested/ proven idea of Public Call Offices (PCOs) and the privately operated phone centers.

Village Phone (VP) is a unique idea that provides modern telecommunication services to the poor people in Bangladesh. A Grameen Bank member obtains ownership of the phone under the lease-financing program of the bank and provides the services to the people in the adjoining area, covering both outgoing and incoming calls. The VP bills along with its other dues are collected by Grameen bank. It is our belief that very soon, VP will attain the position of being the largest wireless pay phone project in the World. Our desire is to install 40,000 village phones by the year 2004.

Each Village phone remains under the custody of a village pay phone operator, who is responsible for extending the services to the customers for both incoming and outgoing calls, collection of call charges according to prescribed rates and proper maintenance of telephone set. The operator's income is derived from the difference between the air time charges paid by customer/s and the billed amount required to be paid by the VP operator along with a flat charge for each incoming call.

3. OBJECTIVES:

To provide easy access to telephone services, all over rural Bangladesh To initiate a new income generating option for the villagers To gradually bring the full potential of the Information Revolution to their doorsteps and thereby introduce telecommunication as a new weapon against poverty.

4. ADMINISTRATION:

4.1 Selection, Subscription and Training:

On getting information about coverage from GrameenPhone Ltd., GTC Unit officer visits the Grameen Bank branches in the area and prepares a list of villages where network coverage is satisfactory, towards providing Village Phones. GB branch then selects from among its better performing members from these villages to act as the VP Operators. Grameen Bank has a specific criteria for selection of VP Operators. Some of these rules are summarized:

She must have a very good repayment record of Grameen Bank loans;

She should have a good business, preferably a village grocery store and has the spare time to function as the VP operator. Initially this would constitute a side business and eventually she would switch over to telecom business on a full time basis, after services and revenue justify full time commitment;

She should either be literate herself, or at least she must have children who can read and write.

Her residence should preferably be situated near to the village center..

After initial selection by GB branch as a potential VP operator, respective Unit Officer of GTC verifiy signal availability at her house or shop where she intends to use the phone. The final approval of membership is provided either by GB Zonal Manger or the Area Manager.

On final selection being over, GTC buys subscription from GrameenPhone and provides connection to the member. GTC supplies necessary hardware and provides the training for operating the phone. The price of phone and the connection fee is paid by GB to GTC while the member pays it back in installments to GB, within the stipulated 3 or 2 years period, as decided for individual cases. Mobile phoners are provided to the member under the lease finance program of GB.

4.2 Billing:

Grameen Telecom purchases from GrameenPhone, air time in bulk, for all village phones in operation, at a specially discounted rate which has been negotiated between the two organizations. GP prepares the monthly bill and sends these to GTC for payment.

GTC remakes the individual bills (in Bangla, the local language) and sends these to the corresponding branch with a summary of all bills due from a particular branch. The concerned branch then pays the bill to Grameen Telecom over the next six weeks period. Grameen Bank in turn collects the bills from VP Operators.

4.3 After Sales Support:

Unit Office of Grameen Telecom is responsible for the VP operation in the field. The duties of U/O are to locate new areas with signal coverage, help GB branch manager to select member/s for becoming VP Operators, training of the VP operator/s and taking care of all kinds of problems faced by VP operator regarding handsets, billing etc.

So far we have 13 unit offices at: Dhaka, Norsingdee, Srinogar, Comilla , Feni, Chittagong, Mymensingh, Sirajgonj, Khulna, Barisal, Sylhet, Rajshahi and Faridpur. Number of Unit offices will continue to increase with the increase in signal available area.

5. Expenditure and Earnings:

5.1 Purchase & Payment:

The basic package of Village Phone contains Nokia 5110 transceiver, battery, fast charger, sign board, user guide in Bangla and price list for different destinations (both local and international. The basic package costs Taka 12000(US$ 220). Grameen Bank branch pays the bill to GTC while the VP Operator pay to GB in weekly installments. For usage charge, VP operators pay minimum monthly bill of Taka 154 which includes monthly line rent, VAT and Service Charge along withTaka 100 towards annual government license/royalty fee. Actual airtime charges are then added over and above.

5.2 Call Charges & Profit:

GrameenPhone charges are Taka 2.00 per minute for local calls at peak hour (compared to Taka 4 for urban subscribers). For NWD and ISD calls, GP charges BTTB rate plus VP air time charges. 15% Value Added Tax (VAT) is added to total call charges. To compensate the administrative costs incurred by GTC and GB, 15% service charge are added to the total GP bill. VP Operators are supplied with a price list that includes all kinds of charges and a margin of profit for themselves. For example, for a local mobile call, retail rate is Tk.5, out of which GP cost is Tk. 2, VAT being Tk.0.30 , Service charge Tk.0.30 . Therefore the rest Tk.2.40 is the profit for the VP Operator .

6. Experience and Impact:

The VP program provides Universal Access to telephone services to the residents of rural Bangladesh. A person may not own a telephone but s/he has access to a telephone near by. Due to diversified occupation being persued, many people live out side their villages. Fifty per cent of rural households do not own any land. They seek off farm and non-farm income earning opportunities outside their villages. Labor mobility has increased enormously in the recent past. Practically, millions now work outside their own village - even abroad. On the other hand, volume of rural-urban trade has considerably increased. Thus two important factors emerge - enhanced labour mobility as well as marketing of agricultural production - which has resulted in enhanced demand for telephone services. The other reality is that personal voice communication beyond hearing distance is still simply not possible even today from 90 per cent of the 68,000 villages in Bangladesh.

The Bangladesh Government's plan to install card phones on an extensive scale does facilitate outgoing calls from Thana (Police Station) levels, but not from the villages. VPs enable villagers to make and receive calls from their own villages A VP operator has a financial incentive to make the extra effort to find the person for whom the incoming call is destined. While, at the present income level, demand for direct subscriber telephone will be very few and universal access cannot be ensured by depending upon private phones.

A phone in a village has several far reaching implications. We have found several significant impact on social life which are described below:

From the phone, average net income of the phone lady is around Tk. 2,500 to Tk. 5000 per month (USD 50 to 100). The amount is quite attractive when compared to other rural occupations. With the completion of the network, 40,000 VPs operators will be employed for a combined net income of $24 million per annum (assuming a 20% increase in air time use).

In 1997, when the news was broadcast by cable television that a tornado had hit some villages in Bangladesh, may non resident Bangladeshis called our 10 village phones from abroad, for news of their villages.

Hazera Begum, one VP operator has collected the telephone number of the Prime Minister. She keeps it handy for possible use if necessary (perhaps in an extreme emergency).The operators also have the phone numbers of the local MP (Member of Parliament), police stations etc. Thus Village Phone has made the operator conscious about their right to call police, MP or even PM in case of need. This is a step forward towards strengthening the base of democracy in the country.

Village phone use can be expanded more significantly in the future towards improving overall living standard in Bangladesh:

We may provide phones to the local Police Station, Hospital/Health complex, Agriculture office, Family planning office, Fire Stations, etc. where the villagers could call for help.

Cell broadcast facility of GSM system may be used to convey particular message (i.e. Flood, Cyclone, Epidemic, Health care etc.) to a particular area.

The villagers may also be given market information in order to empower them for negotiating better prices for their products.

Electronic Fund Transfer, Access to the Internet and many more. Eventually, with the passage of time it will be feasible to set up Village Telecom Center (VTC).

7. Obstacles Faced:

Most of the villages where we have provided VP are situated at the outer edges of the cells. Sometimes signals fluctuate. This results in frequent drop calls, loss of revenue and customers dissatisfaction. We are concerned about this problem. We have already introduced external High Gain Antenna that ensures smooth call completion at areas of weak signal. This also extends coverage for VP operation without further investment in network expansion. Fixed Wireless Terminal (FWT) may be another solution for extended coverage with good quality but it will cost at least double the present cost of mobile cell-phone. We may wait a while for the price reduction of FWT before commencing our experimentation. GrameenPhone is experimenting towards finding cost effective ways to increase coverage in the rural area. Mast Head Amplifier used in BTS close to the villages may be a solution on the network side.

Power for charging the battery is another problem. There are villages with network coverage, but without electricity. The number of such villages will increase as we move far from Dhaka city. We have tested solar panel and DC batteries as alternatives.

All the solutions of the present problems, i.e. extended antenna, solar panel, DC battery increases the start up cost, which is funded by GB branch. This results in increase of weekly installment for the operator. On the other hand, new BTS or MHA will increase the cost on the network operators. We have to explore and find optimum solution on both sides.

8. Prospects and Plans:

Village Phone is used as a community phone in the villages where telephone was a rarity earlier. One VP covers approximately 2500 people of that village. As per our estimates the currently operative 5000 VP have provided telephone access to 12.5 million rural people. Average usage of village phones is around 1600 minutes per month, out of which 600 minutes are outgoing calls. This unique concept (of the Village phone program) has attracted the attention and interest of the international media and different operators. It seems to be a very prospective project in terms of usefulness to villagers anywhere in the world, who remain isolated.

GrameenPhone will gradually expand its network throughout the country. Following the network, GTC will expand its operational areas for village phones as well. Using the Fibre Optic Network(FON) of Bangladesh Railways, GP has already reached Chittagong, Khulna, Sylhet & Rajshahi. GTC has provided VP in between these areas. Further, GP has connected Chittagong with Khulna, through its own backbone microwave link. This has permitted connecting another major town named Barisal, where there are no railway tracks and hence FON is unavailable. Northern Bangladesh will be covered by GP in 2001. After connecting all big cities along the railway track, GP will intensify its network penetration in the remote areas. Once the network expansion of GP is completed, geographic areas of VP will cover almost the entire country by the year 2002. Our target is to install 40,000 VPs by that time (December 2004).

8.1 Village Telecom Center:

Usage of VP will gradually also be diversified, as well. We are planing to establish pilot project of multi purpose telecenters. Exact configuration of such telecenter are being worked out in further details. Ideally these will offer phone, fax, e-mail, Internet, word processing, data entry, distance education, health assistance, adult education and several other benefits from IT, for the villagers. Electronic Fund Transfer, Market Information services will also be introduced. These telecenters will be particularly useful for relief work during natural disasters.

9. Conclusion:

Cell-Phone in the villages of Bangladesh is altogether a novel idea. Grameen made it happen and the direct beneficiary of the information flow are the rural poor. This program has attracted the attention of the interested quarters all around the world. We receive queries from different parts of the world. It is our hope and belief that like Grameen Bank, VP program of Grameen Telecom will be replicated in many developing countries, where it might be the solution for universal access to telephone by joining the islands of isolation.