Grameen Telecom: Serving the Poor Profitably

 This is an original MFMI resource

Author: Sebastian, Asuncion; Lopez, Tomas
Publication Date: 2004
Publisher / Source: Asian Institute of Management
Length: 9 Pages
File Type: PDF
Language: English
Country: Bangladesh
Topics: Marketing/Demand, Products, Technology
Keywords: marketing, mobile phones, innovation, technology, remittances, empowering women

Notes:

View Document

Abstract

The rural Bangladesh had a population of some 80 million, who were willing to spend at least 1.5 percent or US$ 2.57 of their per capita income on telephone facilities. Despite the projected demand and profit from the underserved rural market, it remained untapped. Grameen Bank (GB) then established Grameen Telecom (GTC) for the purpose of extending mobile phone service to the poor in the rural areas using the established principles and financial systems of GB. GB provided the women-operators with mobile phone kit on credit which was payable in two years. GTC charged these operators bulk rates for the use of phone while these operators charged the phone users ? mostly families with members working in the cities or abroad ? a higher rate. The profit earned for this service was used to repay the loan and the extra served as the operator?s income. For the villagers, the results of this scheme were more efficient remittance of money from abroad and better communication with their family and friends; for the women-operators, it meant higher income and better social status; and for GTC, higher profits.