The Hindu Business Line : Grameen Phone — doing things with a difference

As soon as you land at the Dhaka airport and switch on your mobile, it picks Grameen Phone as your service provider, and the `welcome SMS' you receive is with a difference, because it also gives you the telephone number of the Indian High Commission, a desirable bit of information for any travelling Indian. One was thrilled because till now one hadn't got such information in any other country visited.

But then the Grameen family, led by its founder and Managing Director, Mr Muhammad Yunus, is known for doing things with a difference. The "phone ladies" of Grameen Phone are famous; the Grameen Telecom Managing Director, Mr Khalid Shams, puts their number at 2.65 lakh in a subscriber base of 10 million. "But even though they form only 2.65 per cent of GP's subscriber base, they provide 20 per cent of our revenue because the penetration of phones in the villages is rather low — even though things are changing now — and it's a very profitable product for us."

GP, where Telenor has a 62 per cent share and Grameen Telecom the remaining 38 per cent, is the biggest mobile phone operator in Bangladesh with over 60 per cent of the market share. "We're probably one of the biggest in the sub-continent and recognised by the National Board of Revenue as the highest tax payer; earlier it was British American Tobacco."

Calling charges

Compared to India, mobile phone rates are higher in Bangladesh, but they are constantly being reduced, says Mr Shams. In 1997, when it started GP had put the village phone (VP) rates at 2 taka a minute during peak hour and 1 taka at non-peak periods, which was half the rate charged for other subscribers. But as more competitors came into the urban areas, rates for these subscribers, as well as the village phone had to be cut. "Now our village phone rate is 1.5 taka per minute," he says, adding, "In the fixed line area, the government is the major player and their rates are very cheap; a 5-minute call costs only 1.5 taka."

Forecasts

When GP started in 1997, the teledensity - the number of phones per 100 people - in the country was less than 1, "as bad as Nepal or Bhutan; it was a country starved of telecommunication. Now it is 12, and market forecasts say that it can go up to 30 in the next five years. You will certainly find telephones ringing all over the place."

He says while Grameen Bank has managed to demonstrate that you put technology — in this case telecom — in the hand of a poor woman and "overnight the income jumps, GP is also a professionally run and profit-making organisation. There has been some tension between us and GP, which fixes the tariff. On behalf of VP operators we have been arguing with GP that tariffs should be brought down quickly and made more competitive with the other products. But GP says the village phone is now a very important product for us, as it brings in 20 per cent of the revenue. So we keep arguing... but very recently we have agreed again to reduce the rates, because they are desperate and we have to ensure that the village phone remains competitive, because now there are other operators in the villages," adds Mr Shams.

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