Opportunity comes calling
Jun 29, 2001 
Categories: Asia, Bangladesh, Microfinance, Mobile Technologies
Tags: Iqbal Quadir
“Connectivity is productivity”: the story behind Iqbal Quadir’s mantra and how it is proving to ring very true for rural Bangladesh.
Spotlight on Five Heroes of the Digital Divide
Iqbal Quadir: Opportunity Comes Calling
Think cellphones are only for the rich? This ex-banker has proven otherwise
By Yasmin Ghahremani
June 29, 2001
qbal Quadir knows what it's like to live cut off from the world. In 1971, when he
was 13 years old, his native Bangladesh erupted in war. Quadir's middle-class
family was forced to flee their urban home and hide out in the countryside for a
year. Suddenly, everyday conveniences the Quadirs had taken for granted — running
water, electricity, even basic roads — were missing. Then fighting forced the
suspension of ferry services on a nearby river, taking away the village's sole means of
transportation. When Quadir's parents sent him to fetch medicine from a neighboring
town one day, he walked for 10 kilometers to get there, only to return empty-handed.
"Even as a boy, I could see how I had wasted a whole day," he says.
Memories of that day surfaced decades later when the computer network at the New
York investment bank where he was working broke down. Quadir found himself once
again reflecting on what a difference technology can make. "I realized that
connectivity is productivity, whether it's in a modern office or an underdeveloped
village," he says.
Today, thousands of such villages are connected, thanks to Quadir. The 42-year-old
business-school graduate has brought mobile-phone services to millions of people in
rural Bangladesh, and created self-employment opportunities for thousands of
disenfranchised poor. With the help of micro-credit pioneer Grameen Bank, Quadir
established a mobile-phone company called GrameenPhone. The for-profit enterprise
provided the infrastructure necessary to sustain an affiliated non-profit project called
Village Phone. Rural women receive small, no-collateral loans (hence the term "micro-
credit") for cellphones, and a 50% discount on airtime. They can then charge their
neighbors the market rate for making calls. Development experts see the program as a
model for using technology to empower the poor.
You only have to look at the results to understand why. Jamirun Haq is a 38-year-old
woman who lives in the village of Jolarpar, about an hour outside Bangladesh's
capital, Dhaka. Most people here eke out a living growing rice. There is no television
in Haq's simple mud home, or even a toilet. But there is a mobile phone. Some days it
starts ringing at 6 a.m. "A lot of people call from overseas to talk to their relatives,"
she explains. When they do, she tells them to ring back at a designated time, then has
one of her daughters run and get the person the call is intended for. Hers is the only
telephone within a four-village area inhabited by 3,500 people. Haq charges about 20
cents a minute for local calls, more for long-distance and international connections.
She makes a profit of about $100 a month — nearly four times the per-capita income
in Bangladesh and more than many urban office workers earn. "I could not even
touch a phone without this program," she says. "I get very emotional when I talk
about it." She is saving for her two younger daughters' education and hopes they'll
become lawyers.
Creating better opportunity for women is one of the scheme's many achievements.
Women who run Village Phone businesses not only earn more than most men, but
have greater decision-making power in the family. Their children are more likely to be
in school than other kids. The users of the phones benefit too. With easy access to
market information, they can get a fair price for the sale of agricultural products.
They're also able to keep in touch with relatives living in other towns or abroad.
Quadir's inspiration for Village Phone was Grameen Bank (now a 35% shareholder in
GrameenPhone). The bank started micro-loans to Bangladeshis 25 years ago, and
enjoys a remarkable 98% repayment rate. That's partly because most borrowers are
women, who tend to be better credit risks than men. "You will never see a woman
take the money and get drunk with it," says Grameen Bank founder Muhammad
Yunus.
Still, even after gaining Yunus's support for his idea in 1994, getting the project off
the ground wasn't easy. Quadir quit his banking job, moved back to Bangladesh and
for three years worked out of his house and car, without pay. "At the beginning he
was kind of frustrated," says his wife Samina. "He really had to start from scratch in
Bangladesh." Quadir traveled the world trying to convince investors that rural
Bangladesh was an attractive market for mobile-phone services. "The idea just seemed
so atrocious," recalls Khalid Shams, deputy managing director of Grameen Bank. "But
Iqbal Quadir was very persistent. He was someone who could do the bulldozing."
Finally, Quadir convinced Norway's state-backed telecoms company, Telenor, to take
a 51% stake in GrameenPhone. With the help of Japan's Marubeni Corporation and
$65 million in loans from aid agencies and development banks, the new company
started operations. But the battle had just begun. Quadir says he considered throwing
in the towel just two days before GrameenPhone won a mobile-phone license from
the government. "There was almost no hope," he recalls. "And at that time, I had a
wife and a child, and I was thinking I had to wrap up all this crazy stuff. For three
years I had been completely floating around."
The company did win its license, and built transmitting towers and leased a fiber-optic
network from the national railway. GrameenPhone is now by far the largest cellphone
company in Bangladesh, with 260,000 subscribers, 5,000 of whom are part of the
Village Phone program. Considering the average village has 1,700 people, around 8.5
million villagers now have access to the world. The number of Village Phone
subscribers is expected to double to 10,000 by the end of the year. They are a
commercial asset to GrameenPhone, ringing up an average $100 a month in charges
each, compared with urban users who average only $22 a month. After four years of
losses, GrameenPhone began making a profit this year.
Bangladesh's flat terrain and dense population make it easier to build a profitable rural
cellphone business than in many other poor countries. But Quadir is convinced
similar projects can succeed elsewhere, fueled by entrepreneurialism rather than
traditional hand-outs. "I don't know any country that has used aid to become
developed," he says. It's a belief he picked up while studying for his MBA at Wharton
business school in the U.S., where he realized companies and the profit motive can
help solve society's problems. "I didn't want to believe that," he chuckles. "I would
rather learn that businesses were exploiting. But in fact commerce is development."
Quadir is still a shareholder in GrameenPhone, but the restless entrepreneur left the
firm in 1999 to return to the U.S. and tackle other challenges. "I like to solve
problems, but I don't want to solve the same problem every day," he says. His
immediate task is preparing a course on technology and development that he is
scheduled to teach at Harvard's Kennedy School of Government this autumn. He's a
bit nervous about it because he's never taught before. His students, however, will no
doubt find they have a lot to learn from the man who got Bangladesh's villages
ringing.
URL http://www.asiaweek.com/asiaweek/technology/article/0,8707,132167,00.html
