GrameenPhone: A Solution to Rural Connectivity
Monday, November 27, 2006
But there was a twist: while the company would have direct subscribers like regular cellular companies, local entrepreneurs in villages would buy phones, rent them out ? with airtime ? to neighbours and friends who wanted to make calls. Iqbal Quadir found his exposure to Wall Street fascinating. One particular phenomenon caught his eye: People were buying unglamorous companies cheap, investing in them and selling them high. The process helped the companies, the consumers and made these investors rich.
“Much like an underappreciated company, I had an unglamorous country,”says Quadir, talking of his homeland Bangladesh.
And that unglamorous country had an unlikely “asset”? a vast population of poor people. Which is why, in 1993 Quadir, a Wharton grad, chucked his top-dollar job as an investment banker to piece together a company that would try to solve Bangladesh’s communications problems, utilising its people. Bringing cellular connectivity all over Bangladesh was an ambitious idea.
Even the most basic fixed-line connectivity available was patchy and expensive. And only a few analogue cell phones served tiny pockets of Dhaka.
But why telecom, especially when Quadir knew nothing about it? “Connectivity is a critical ingredient of economic development.
Computing and communications are getting cheaper by the day ? thanks to the digital revolution. Communications devices were marching to the poor. The only question that remained was how they would be delivered,”he says.
Quadir also had a deep dissatisfaction with how Bangladesh ? and countries like India for that matter ? is going about development.
“Aid from western countries has mostly empowered governments, distancing them from their citizens who are left helpless,”he says.
“Historically, people rose from below through technological empowerment and then they participated in their governance, leading to service-oriented governments.
That’s what created healthier societies with checks and balances.”Which is why, Quadir decided to pursue development from bottom-up.
In simple words, capitalism ? or companies working towards a profit motive ? can be used to solve a country’s problems, instead of waiting for governments to solve them with aid.
So the idea of GrameenPhone was born. The company would provide cellular services in big cities as well as in rural areas.
But there was a twist: while the company would have direct subscribers like regular cellular companies, local entrepreneurs in villages would buy phones, rent them out ? with airtime ? to neighbours and friends who wanted to make calls.
It was a great idea. Even as it solved the communication problem in the hinterland, it also provided many a means of livelihood.
But, as with all things utopian, it found few takers. “The common people are happy to be in touch with relatives or those they are working with,”says Quadir.
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