February 20, 2007, 12:18 PM — David Geer recently spoke with Nicholas P. Sullivan, author of You Can Hear Me Now: How Micro Loans and Cell Phones are Connecting the World's Poor to the Global Economy. Following is an edited transcript of that conversation.
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David Geer: Brief us a little bit on GrameenPhone.
Nicholas Sullivan: GrameenPhone is a cell phone company in Bangladesh. It is celebrating its 10th anniversary this March. It is a partnership between Grameen Bank, the fabled micro lender that just won the Nobel Peace Prize along with Muhammad Yunus, and our Norwegian telecom company -- It used to be the state owned telecom in Norway, which is now partially privatized. So basically, Telenora came in, partnered with GrameenPhone, won the license about 11 years ago and then began building up the network very quickly. They now have 10.5 million subscribers, about a 63% market share in Bangladesh, and notably, they have 300,000 so-called village phones, which are out in the very rural areas where there is no electricity and there are phone ladies who have borrowed money from Grameen Bank to buy a phone and then lease time to the villagers, and they use that money to pay back the loan. So it's created in that fashion and others, a kind of indigenous supply chain of local entrepreneurs that has really added to the income opportunities in the rural areas.
Geer: Tell me a little more as far as the detail about the phone ladies and their buying the phones and making them available, the leasing of time and so forth.
Sullivan: It used to be that they would borrow money from Grameen Bank and buy cows and then sell the milk and so forth. So the cell phone is just essentially a replacement for the cow. They are just using the money to buy a cell phone and then using returns on that to pay back the loan. So the phone, which used to be, 10 years ago, in the $400 range, which was almost twice the per capita annual income, are now about $100 when all the tariffs and duties and taxes are added on top. So they buy the phone and then they set up shop at a little table, either in their own shop, or just in a little corner of a pharmacy or a supply store. And people come in, they have a cell phone on a desk, they have a little book that gives them the rates to different places overseas, and villagers just come by when they need to use the phone. And they pay a la carte, so they don't own the phone, and they don't subscribe, but they get to use the phone whenever they need one.
Geer: And so the cost of the leasing for the villagers is pretty affordable for them.
Sullivan: Yes. I think the average call or per minute fare is about three taka in Bangladeshi money, which is about four cents per minute. So that's pretty affordable. Overseas, obviously, is a different thing, and there's a lot of calls overseas. I visited one phone lady who had, I was there about 11:30 in the morning and she had already recorded 30 calls and several of them were to Saudi Arabia because there's a lot of Bangladeshis and Indians working in the Middle East and the Gulf Region. So their subscriber number is low, it's only about 3 or 4% of the total number of GrameenPhone subscribers. But the revenues are more like 15 or 20%, because the phones get a lot of use and a lot of long distance overseas calls.
Geer: And this is profitable for the phone ladies?
