ABSTRACT

The objective of this article is to examine the role of the Village Phone (VP) Program in empowering village women. The article takes a case study approach that draws on interview data and a review of the literatures on the VP Program in Bangladesh. The article takes a case study approach that draws on interview data and a review of the literatures on the VP Program in Bangladesh. It is argued that VP program has created income opportunities for the rural women who predominantly operate the owner-operated village pay-phone program. We find that the VP empowered village women economically and socially by reducing their dependence on other members of their families and allowing them increased roles in household decision making. The empowering role of the VP had its spill over effects on its users as well. The article demonstrates how an innovative idea by social entrepreneurs in the Information and Communication Technology (ICT) sector can act as change agent in transforming the socio-economic condition of rural poor women, making them self reliant and providing them with entrepreneurial qualities in managing small and medium business in an innovative way.

Key words: Shared access model, Village Phone (VP), Village Phone Operator (VPO), Empowerment, Information and Communication Technology (ICT), Grameen Bank

1. Introduction

Bangladesh’s telecommunications infrastructure has been one of the poorest and outdated in the world. The tele-density of the country was less than one (0.63) per 100 persons in 2003 (Bhuiyan, 2004). Potential telecom users had to wait 4-6 years to get telephone connection (Tipu, 2004). The service quality of the BTTB (only service provider) was poor and the call completion rate remained under 50 per cent. Although about 80 per cent people live in villages, there was no telephone connection in rural areas. Against the backdrop of public sector telecommunication’s inability to meet growing telecommunications demand, the advent of mobile phone technology and ideological shift towards neo-liberal economic paradigm, Bangladesh initiated liberalization of the mobile phone sector during 1989-1990. The first mobile phone license was issued in 1989 and then five more mobile phone licences were issued during 1996-2005.

In the period 1993- 2000, the mobile phone was very expensive and urban and district centred. US-based entrepreneur Iqbal Quadir first floated the idea of providing mobile telephony to the rural people of Bangladesh. GrameenPhone (‘Grameen’ means ‘village’ in Bangla) recognized Quadir’s innovative idea in its Annual Report 2006:

His early discussions with Professor Yunus later resulted in launching the internationally acclaimed Village Phone Program, coupling micro-credit with mobile telephony to make telecommunications accessible to the rural poor. (GrameenPhone, 2006).

GrameenPhone translated his idea into a virtual business model to providing telecom services to rural people (Camp & Anderson, 2001). It is a profit-making business portfolio of the world renowned micro-credit finance institution Grameen Bank founded by Nobel laureate Professor Muhammad Yunus. In 1997, three of the Grameen family members, namely Grameen Bank, GrameenPhone and Grameen Telecom, jointly launched the VP Program to provide mobile phone services to poor Bangladeshis. It is the Grameen Bank that played crucial role in giving a concrete shape to the GrameenPhone partnership. The program has now spread to more than 50,000 villages, in 61 out of 64 districts of the country. It indicates that the program’s scale is expansive and its development potential is also geographically vast. The VP program has become a unique and innovative social business model for which Professor Yunus along with his Bangladesh-originated Grameen Bank won the 2006 Nobel Prize (Frieden, 2006). The uniqueness and importance of the program has been expressed in the Nobel Peace Prize Lecture, 2006 by the Nobel Laureate
as a first step to bring ICT to the poor:
    “we gave loans from GB to the poor women to buy mobile phones to sell phone services in the villages. We saw the synergy         between microcredit and ICT. The phone business was a success and became a coveted enterprise for Grameen borrowers.         Telephone-ladies quickly learned the art of telephone business, and it has become the quickest way to get out of poverty and to     earn social respectability. Today there are nearly 300,000 telephone ladies providing telephone service in all the villages of             Bangladesh. Although the number of telephone-ladies is only a small fraction of the total number of subscribers, they generate     19 per cent of the revenue of the company. Out of the nine board members who are attending this grand ceremony today, four     are telephone-ladies“. (Yunus, 2007)

The Village Phones function as an owner-operated pay phone with full connectivity including the facility to make and receive international calls. This study examines the role of the VP – a micro-credit product of the Grameen Bank in empowering rural women, both economically and socially.

The study contributes to understanding how a technological and financial partnership contributed to the economic and social empowerment (increased social status and increased role in decision making) of village women, through the provisioning of a very small amount of microcredit. This study highlighted the ‘social empowerment’ issue of the VPOs something not much explored in other research. It also highlights how an alliance partnership within the Grameen family of organizations (an ‘in house’ solution) and their mutual support to the shared business model contributed to make the airtime business a success for VPOs and keep the telecom service affordable to poor rural customers. The VP model could be a model for pro-poor ICT practitioners.

The article is structured as follows: Section 2 outlines the research approach and data collection techniques, Section 3 provides theoretical background, and Section 4 describes the modus operandi of the VP program. The e-roles of the different partners engaged in the VP model are discussed in section 5. In section 6, we examine the combined efforts of four partners and their effects on the VP program, while section 7 analyses the role of VP in women’s empowerment. Section 8 focuses on Challenges for VP program, the hope of continuity and policy implications. Section 9 concludes.

2. Research approach and data collection

Data for this study were collected through a combination of face-to-face interviews and secondary materials. Twenty-four in-depth interviews were conducted with VPOs using a semi-structured questionnaire. These key informants were randomly selected from a sample of twenty-four villages located in Dhaka and Chittagong region. These villages were selected considering the budget constraints and ease of access. Moreover, the VP program started its journey from these two regions. When the interviews were conducted, the husbands of the phone ladies were present in most cases. In a few cases, phone ladies were interviewed alone. When husbands accompanied their wives (the VPOs), they also made some comments spontaneously about the income from the VP business and the changed role of their wives in the family. They openly recognized that the VP business has improved the economic condition of the family as well as the social status of their wives. The questions asked in the interviews were not about empowerment directly because “empowerment” was considered a difficult jargon for the village women to understand. The interview questions focused on areas such as the income from the VP business, scope for participation in family decision making, freedom of mobility, and reduction of dependency on their spouse and access to information. The changes/improvements in these areas were considered a proxy for empowerment.

Furthermore, 20 VP users and 10 village leaders were selected randomly from these villages to verify if there were any changes in VPOs’ social status and economic wellbeing after the implementation of the VP program in these areas. Moreover, interviews with two mid-level managers and one senior corporate level executive of GrameenPhone (one of the pioneers of the VP initiative), were interviewed during August-October 2008. The purpose of this interview was to assess whether GrameenPhone had any policy stance to empower these women along with their business goal. The interviews were transcribed, systematically coded according to themes and then analysed using computer- based NVivo software 8.0.

Although the article relied upon interview data gathered from a limited number of VPOs, village leaders and GrameenPhone officials, these interviews enabled us to analyse the merit of the VP program. As a qualitative study, the purpose was to explore everyday life experiences of VP operators. The study was not aimed at providing statistical generalisations, and it does not claim that. The study provides analytic generalisations as stated in Yin (2009). No socio-economic factors have influenced the findings other than the respondents’ opinion.

3. Theoretical foundation

Providing credit to rural women including VPOs aimed to give them access to capital so that they can be economically independent. Although the VP model is based on conventional capitalism providing capital to village women to help them get prosperity, the ideology behind the VP model, is at variance with the traditional capitalistic model. The traditional model facilitates exploitation of the labourers in a hierarchical value creation process. The owners of capital retain the surplus value created through the use of capital.

Unlike the lending practices of market capitalism, the Grameen Bank and GrameenPhone created a partnership model to provide micro-credit to rural women. The objective of the partnership model is to enable the eligible rural women to buy mobile phones sets as well discounted airtime to run retailing of mobile phone services without any collateral. This partnership model has created a social business called VP Program where the village phone operators retain a large portion of the surplus value they create by commodifying the mobile phone set. These village women are not part of the traditional labour force and were mostly housewives or informal labourers. They have turned into a new group of social entrepreneurs through the VP program.

Empowerment is a cornerstone of a bottom up approach in development. Empowerment refers to enabling weaker, excluded and powerless citizens to gain or regain power over their lives. Rappaport, (in Beeker et al., 1998), defined empowerment as ‘the process by which people, organizations and communities gain mastery over their lives’ (1998, p. 832). Others (e.g., Hawe, 1994 in Beeker et al., 1998, p.833) have defined empowerment as specific outcomes, including increased political efficacy and social participation at the individual level, increased opportunities for shared leadership and decision-making at the organizational level, and increased competence to collectively identify and solve problems at the community level. From these definitions of empowerment, it is clear that empowerment can refer to different content areas (e.g., sexual negotiation, economic self-sufficiency) at different levels of analysis and practice (e.g., individuals, couples, groups, organizations) Beeker et al.,1998 p. 833). Kabeer (2001 in Malhotra et al., 2002) defines empowerment as ‘The expansion in people's ability to make strategic life choices in a context where this ability was previously denied to them’ (2002, p.6). We employ this definition of empowerment in this article as it discusses the increased role of the women (VPOs) in the family decision making and also of their elevated social status which they rarely enjoyed in the past. The essence of a bottom up approach is that development should focus especially on marginalised people who are unable to raise their voices in decision making or excluded from the development process. In the context of bottom up theory, empowerment can be translated into people’s participation by allowing them take part in the decision making and development process (Fors & Moreno, 2002).

Access to information about employment opportunities, market prices, and government programs, are some of the means to enhance empowerment. The VP model did not only empower the poor women; it also empowered the village people over middlemen by providing them with timely and relevant information about market prices, when to market and where to market their produce. Dowla (2006) observes that “access to telecom service through VP reduced undue advantages of well-connected people”. By helping reduce information asymmetry, VP also increases users’ authority and control over the resources and decisions with which they are concerned with. Village Phones are also used as a tool for networking and information exchange. Anecdotal evidence suggests that the village phone increases their income by 10-20 percent on top of their time savings (Sullivan, 2007)

By connecting the poor to a wider society, the VP has also enabled them to voice out their ideas. From a consumer perspective, access to information and the ability to exchange opinion with peers about the market makes them knowledgeable about the prevalent price and alternative choices. Also consumers with more knowledge feel more powerful (Foucault, 1972 in Pires, Stanton and Rita, 2006).

It is to be noted here that there exists a strong connection between knowledge, information and development. Knowledge and information are critical elements in all modes of development since the process of production is always based on some level of knowledge (Castells, 2000, p.17). Knowledge based information (as argued by Castells in Stalder, 2006) may lead to new ways of organizing production or to more effective marketing strategies (Stalder, 2006, pp.71-72). The VP program, by providing knowledge-based information to the villagers, greatly helps the traders, farmers and fishermen to adopt more effective marketing strategies. VP also allows its users to maintain social relations what Sik and Wellman, 1999 and Larsen et al. 2006 (cited in Larsen et al., 2008) call ‘Network capital’.

The bottom up approach postulates that there are three areas where empowerment can be done through the diffusion of ICT (mobile phone service is an ICT service). These are: basic needs, social empowerment and rural based development. The VP program brings income or an opportunity for income for VPOs, thus helping them in fulfilling their basic needs. This income or opportunity for income is development. Income allows people to go beyond subsistence living and to save, invest and produce (Sullivan, 2007).

Information and knowledge have become increasingly important in the contemporary globalized economy. Access to information is now considered as a basic need (Fors & Moreno, 2002). Information is a basic need as recognized by many including Nelson Mandela. Information is “a great social leveller, information technology ranks second only to death” (Sullivan, 2007, p.111). The VP program helps shrink the digital divide and contributes to social reduction of social inequality. The reduction in equality also empowers the users of mobile phones socially vis- a-vis elites and middlemen.

However, the emphasis of the role of microcredit in empowering women and making them self-reliant through entrepreneurship development has been found to be rhetoric in some cases. Isserles (2003) finds that often the rhetoric of empowerment (such as “women are placed in the driver’s seat of their life”, describing the poor as “good credit risks” and ‘credit worthy’ and “lifting them out of poverty”) had a condescending or patronizing tone accompanied by self-help jargon of “confidence” and “self-esteem”. The claim that microcredit promotes create initiative and responsibility to the poor ignores the fact that the poor are usually creative and responsible because survival is so critical for them. Many poor people who earn and subsist in the informal economy are already entrepreneurial. Most of the thinkers who use such notions about poor people lack a good understanding of how poor people live their lives. The advocates of microcredit often give a narrow interpretation of poverty.

Microcredit often uses very popular and potent rhetoric to appeal to those who are frustrated with their sheer poverty. In targeting microcredit to lift women out of poverty and empower them, microcredit marketers emphasise the individual, ignoring the fact that larger structural processes that create and intensify disparities between people are responsible for the inequality between the poor and the rich (Isserles, 2003:45). They even lack respect for women borrowers as noted by a borrower:  “One could observe that they (Grameen) had no respect whatsoever for the women. They embodied a culture that these women are children. And you cannot possibly hope to empower anybody that you think is an idiot” (Isserles, 2003 pp. 46-7).

Women are targeted for microcredit program because they can be easily coerced to realize repayment and they enable the success of the program, measured in repayment rates. It suggests that microcredit programs do not always believe in genuine empowerment of women rather they are selected because they are good payers (Isserles, 2003).

Moreover, with the inclusion of women in income generating activity, their responsibilities at home and field are not shared equally, thus forcing them to face the consequences of second-shift responsibilities (Hochschild, 1989). So although microcredit empowers women in some ways, in other ways it makes them more constrained by more labour. Moreover, research has shown that loan provided to women are often controlled and managed by male relatives, yet women bear the responsibilities to pay it back (Isserles, 2003, p.50). This practice undermines the main rhetorical appeal of microcredit, which aims to empower participants through economic self-reliance and self development.

In contrasting this view, we examine how VP program has generated social entrepreneurship in a tradition-bound rural Bangladesh by introducing Information and Communication Technology-based (ICT) social and economic relationship. VP acted as a change agent in transforming the socio-economic condition of rural poor women making them self reliant and providing them with entrepreneurial qualities in managing small and medium business in an innovative way.

4. Modus operandi of the VP program– a win-win situation

The VP program is an alliance partnership between Grameen Bank, Grameen Telecom and GrameenPhone. Grameen Telecom is a non-profit entity of Grameen Bank that also owns part of GrameenPhone. Grameen Bank, the pioneer micro finance institution, took the lead firm role in launching the collaborative program. Grameen Bank provides $200 capital each to enable borrowers (who are mostly Grameen Bank’s women members) to buy a cellular mobile handset from Grameen Telecom (Anderson & Kupp, 2008; OECD, 2004). The women, who are existing Grameen Bank borrowers, are selected as VPOs in rural villages because they are trusted Grameen Bank borrowers with good repayment records and are in constant touch with Grameen Bank. The women borrowers obtain ownership of the phone with appropriate connectivity provided by GrameenPhone Limited. GrameenPhone supports the program by providing airtime at discounted price. Grameen Telecom buys bulk airtime from GrameenPhone for all Village Phone Operators at 50 per cent of the regular prices (under a partnership agreement) which are then passed on to the VPOs. Grameen Telecom also trains the operators as well as handles all technical and services related issues to help the women borrowers run the phone business smoothly. The phone ownership, training and the connectivity makes women borrowers “Village Phone Operators”. In addition to the three contributing partners, VPOs also have emerged as an integral part of the partnership as they became entrepreneurs through this program (Islam, 2005). They rent the phones with airtime to the neighbors in the adjoining areas in the village for a fee where no such facilities existed before (Mair & Schoen, 2007, Morse, 2003). Thus it is evident that the VP model is a shared business model where mobile phone services reach end customers through an intermediate device provider. Instead of each user owning a mobile handset, a group of them shares one. The benefit of this model is that by removing the barrier of owning a mobile phone set, the ICT service becomes cheaper and affordable for the rural poor (Dang & Sultana, 2008, p.2). Shared access to technology also helps to achieve universal access to ICT (Selwyn, 2003).

5. Role of different partners in VP model

The partners engaged in the VP program pull together their complementary resources for the successful functioning of the program. The mechanics of the VP Program and the role of the four partners involved in the VP (namely GrameenPhone, Grameen Telecom, Grameen Bank and VPOs) as well as their relationships are shown in Figure-1.

Figure 1 Roles of different partners (GB, GP, GTC and VPOs) involved in the VP Program

Grameen Bank: Grameen Bank selects VP operators on the basis of their past credit records. It provides loans to VPOs for start-up costs i.e., to buy mobile phone sets. It also ensures that VPOs repay their loans regularly (Knight-John et al., 2005). Grameen Bank staff members are permanently located in villages and meet with borrowers at regular intervals to ensure that borrowers avoid moral hazards such as unwillingness to repay their loans (Knight-John, 2007).

Grameen Telecom: Grameen Telecom, supplies handsets, trains VPOs on how to operate mobile phones, repairs handsets and handles all service-related issues (The Daily Star, 2006). It bears marketing and advertising costs of the VP program and prepares monthly bills for the airtime charges for each village phone.

GrameenPhone: GrameenPhone provides telecom network infrastructure and sells airtime in bulk, with a 50 per cent discount to Grameen Telecom. GrameenPhone also issues the bill for the airtime it provides. For billing purpose, GrameenPhone treats the entire VP program as one customer and sends a single summary bill (for the aggregated airtime of all the VPOs) at the end of the month to Grameen Telecom. GrameenPhone incurs costs related to communication infrastructure, technical support, provision of airtime, government licensing and regulatory compliance, government financial and taxation liaison (Knight-John, 2007).

VPOs: The VPO are selected from the large pool of Grameen Bank borrowers. In order to be eligible to become a VPO, these borrowers must meet the following requirements:

• Grameen Bank member for a minimum period

• Have a good repayment record(who had paid back at least two loans)

• Have time to operate the VP

• Have at least one literate member in her household, if she is not

• Have access to electricity

On fulfilment of these conditions, the potential VPO gets loans from Grameen Bank to buy mobile phone set and then resell the airtime to other local villagers for a fee. The selection process is done by the Grameen Bank at the village level. Since more than 95 per cent of Grameen Bank borrowers are rural women (Isserles, 2003) and they possess a very good loan performance (98.95 percent repayment on time, regular attendance in weekly meetings), most VPOs are selected from the pool of Grameen Bank members. There are some reasons for women to be selected as VPOs. It is more difficult to extract payments from men, and women are much more manageable. Moreover, they can be easily coerced to realize credit and they make the success of the program, measured in repayment rates (Rahman, 1999). Women are in charge of the household and look after the children. They find this program beneficial for the well-being of their children.

6. Alliance partnership and success of the VP program

In the case of VP, it appears that the alliance partners’ combined ideas, resources and information helped to bring the innovative and unique VP business model. Grameen Bank’s microcredit, brand image and creditworthiness database of villagers (in selecting potential VPOs), GrameenPhones’s technology and Grameen Telecom’s management support have been the critical success factors for the VP model (Dang & Sultana, 2008). This innovative social business model also benefits from the social network evolved centring on the VPO. It can be argued that the business network between four partners and their complementary skills and resources has been one of the main factors towards VP model’s success.

Another important reason for VP’s success is Grameen understands the aggregate purchasing power of the community and realizes the importance of keeping the call tariff affordable to villagers. The combined purchasing power of the community helped the VPOs to run village pay phone business profitably on shared basis. Grameen understood the significance of combined purchasing power of a community in introducing the VP in rural areas (where one single person is unable to bear the cost of a mobile) much earlier than Prahalad and Hammond (2002) who later stated:

An individual consumer might not be able to afford a particular product or service, while a group or even a whole village, often can. Shared access is rapidly becoming the standard model for providing IT access in BOP markets, making the community-not the individual-the customer (2002, p.10).

The selling of airtime by GrameenPhone in bulk at 50 percent discount also contributes to the VP Program’s success (Knight-John, 2007). VP’s rates thus remain affordable for villagers and profitable for VPOs.

7. Role of VP program in empowerment

The VP facilitates rural people’s access to ICTs to generate incomes for households in rural areas (Quire, Tschang & Reyes-Macasaquit, 2002). It is also the first initiative in the private sector with the explicit purpose of rural poverty reduction through provision of ownership and retailing of mobile phone services. Grameen Bank, through its VP program, has promoted unique business models in rural Bangladesh that enabled village ladies (without collateral) to set up a business of retailing the mobile phone service. The VP Program is an internationally acclaimed program through which GrameenPhone has not only taken the phone to the poor people; it also provides the rural women with a new form of employment and empowerment (Lane et al., 2006).

The commodification of the mobile phone helped the VP operators to be economically less dependent on their male partners as the program brought them earning scope. The majority (72%) of the VPOs interviewed mentioned that the VP program had provided them with the opportunity to earn their livelihood. It has been revealed by the VPOs that they now (2008-09) earn on average US$1.4- 1.50 a day after meeting all costs incurred to run the VP business. The revenue and costs structure (as found in the study) shows:

Total revenue from the airtime sales of VP $4.00

Bills paid to Grameen Telecom $ 2.00

Commission paid to Grameen Telecom (15per cent) $ 0.60 costs (maintenance etc.)

Profit per day per VPO is = ($4.00- $2.00-$0.60)= $1.40. This profit figure did not consider opportunity cost of the time VPOs spend in the airtime business. The net profit would be lower if opportunity costs of VPOs’ time are considered.

The VPOs reported that a few years ago i.e. during 1999-2002/3, they used to earn $ 2.00- $ 2.50 per day after meeting the expenses. The significant reduction in call rates due to competitive pressure and easy accessibility of mobile phones reduced their net income in the last 3-4 years. The findings are consistent with Forestier et al., 2002 who find that a VPO generate net annual income of $624 by retailing phone services (Forestier et al., 2002).

The $1-1.50 income/day from the VP may seem very insignificant for many. But in a country where a typical household in rural village spends around US$ 2-3 a day (as revealed by the informants during interview), 40.4% of the population live below the absolute poverty line, and millions of of these people cannot afford to buy the basic necessities of life such as food, clothing and shelter (Mondal, 2009), VPOs income of around $1.4 a day makes a significant contribution to their household income. Although in some cases, VPOs’ husbands operate the phone on behalf of them and enjoy some control over the phone and the earnings from the business, it still goes to the phone ladies’ family adding to their total income offering them choice and discretion to spend extra income.

About two-thirds (64%) agreed that the business model of VP allowed them to have increased role in family decision making, and enhanced their dignity relative to the rest of the community. Just over two-fifths (41%) of the respondents claimed that they are now able to decide spousal matters such as whether they would adopt family planning to limit their number of children. Previously, they had to surrender to husband’s will on different familial issues such as whether to adopt family planning, sending children school or not and whether to buy a piece of land. Just under three-fourths (69%) of the VPOs stated that before the VP business, they had lacked freedom of mobility in the society. They were seen as a mere housewife to do every day to day activity including cooking, cleaning, washing clothes, rice parboiling, and husking with the use of a Dekhi (basically a tilt-hammer mortar and pestle). Regarding husbands’ role in getting initially involved with the VP business, a majority of the phone ladies (18 out of 24) reported that their husbands/male guardians in their household influenced them to become Grameen Member and engage in the airtime business.

All twenty-four VPOs asserted that the Village Phone increased their social status within the village community. The following comment of one VPO testifies to this fact:

    We were never invited to any social functions or gatherings. The influential persons never counted us. Our role was to serve the     family, taking care of our children and obeying our husbands’ orders. Now we are at times invited to the houses of the                 influential members of the village. It may be because they know that we operate phone business and we can decide what to do     with our earnings. We want to spend more for education. We now understand education can give our children a better and             independent life (Interview, 2008)

Regarding the extent of empowerment, four-fifths of the VPOs interviewed mentioned that they now feel more empowered in terms of their own mobility and control over income but they still have to depend on marriage for any access to the generational transfer of property. Around 40% of the VP respondents stated that although VP provided phone ladies an avenue of earning income, in some cases the phone business has negatively affected their daily life. Previously, their role was merely looking after house hold activities such as, cooking food for the family, giving birth to children & rearing them up, taking in a goat or a cow to raise for profit, and helping their husbands in farm activities. Some of them even worked as maid servants in wealthy families and migrated to urban cities looking for a job. The involvement with the VP resulted in additional responsibilities for them (Interview, 2008). Their responsibilities at home and in the field are not shared by their husbands. In some cases, they are still subject to gender-based division of labour such as care giving, unpaid home work and subsistence work.

On the question about husband’s anger and verbal aggression due to their joining as VPOs, one-fifths of women reported claim a decrease of verbal aggression against them because of their joining the VP business. However, one-tenth claimed:  “Yes, sometimes we have to face verbal aggression and husband’s anger because of our involvement with Grameen. However, now we argue and fight back as we are no more financially dependent on them” (Interview with VPOs, 2008).

Village phones also brought independence to rural women who previously lived at the behest of their husbands. In this regard, one strong view held by a VPO on reducing dependence was:

I am now a self- employed woman earning a living; before I became the Village Phone Operator, I used to depend fully on my husband for all matters including begging for money. The income I earn from the VP business reduced my helplessness and dependency. It helped me to become self-dependent to a large extent (Interview, 2008).

Women’s empowerment comes in different forms such as economic empowerment, social empowerment, ability to get (borrow) money in the case of an emergency and empowerment through improved access to information. Apart from economic self reliance, the income earning capacity created increased standing of the VPOs in their community. The VPOs are now able to borrow money from their relatives, husbands or friends in the case of an emergency (Pitt, Khandker & Cartwright, 2006). The increase in creditworthiness of these rural women is a kind of empowerment for them.

Access to mobile phone also provides women with a tool to meet their social purposes and ensure personal safety (Wajcman 2004 in Green & Singleton 2007). It is significant that relatively well-off villagers have to come to a poorer woman’s house to use the phone. These factors and the income stream from the VP operation contribute to her enhanced social standing and voice in the village as she becomes a communication hub.

Aminuzzaman et al. (2003) have classified the impact of the VP into seven types or areas of empowerment. The areas include general uncertainty reduction as a result of access to telephone; improved standing of the client; reduced need for travel; improvements in clients economic activities; enhanced contact among family members; better contact with political–administrative authorities; and impacts on gender-relations (for a useful review see Aminuzzaman et al, (2003). We agree with most of the findings of Aminuzzaman et al., (2003). However, our findings reveal that use of VP could not increase contact with political-administrative authorities because of very poor quality of political and administrative governance in Bangladesh. That does not allow people from rural areas to have direct contact with administrative and political hierarchy. In regard to the improvement of gender relations, we find that some degree of social awareness is there but this could not have a huge dent on the age-old gender relations in the rural Bangladesh society as the social formation is not yet highly differentiated in the absence of a full bloomed capitalist agrarian economy.

Inclusive leadership and distribution of authority- The interview findings suggests that what was initially commenced as a private sector initiative to address rural poverty has later turned into a tool for gender empowerment. The insights of this study and the statement of Prof Yunus, as has been stated earlier, also suggest that the role of the VP is not confined to women empowerment only. It underscores another important characteristic of the Grameen alliance. GrameenPhone Model has ensured inclusive leadership. In the GrameenPhone board, there are four female board members out of nine which indicate that the alliance has also contributes to achieve some gender parity. Through the VP model, Village Ladies achieved not only social, informational and economic empowerment; it also helped them to take up leadership positions. This is a demonstration of empowerment in business representation and management. Moreover, the Grameen alliance also contributed to the distribution of authority within the VP initiative. The distribution of authority and power among men and women helps in creating a wider understanding about gender inequality that exists in Bangladesh.

The findings presented above suggests that the commodification of village phone (airtime business) the VP model has empowered most of the phone ladies in various forms such as ability to articulate their own aspirations and strategies to realise the aspirations or bring change in their life, less dependence on husbands and greater bargaining power vis-a`-vis their husbands, greater voice in household decision making, access to financial and economic resources and greater social networks (www.doc.kl2.qa.us in Rahman and Kabir, 2004). The ability to articulate one’s own aspirations and formulate necessary strategies to achieve the aspirations is another indicator of empowerment.  It signifies that the phone ladies became empowered in setting their aspirations and strategies. The airtime business and the income earnings from it also significantly lifted the social status relative to the rest in the society. Before the launching of the village phone program in rural villages, the rural women were seen more as a mere housewife, born to give birth to child and rear them up, and to serve their husband’s order and purpose. They had very less or freedom or scope to express independent opinion. After the implementation of the VP, a noticeable change is now observed in the village level especially in the phone ladies’ families. They are more valued in the family as well as in the society. They have now greater freedom of mobility and control over the resources they own. Sen (2004 in Rahman and Kabir, 2004) rightly mentioned, “The concept of such phone lady has created economic and social mobility of women in rural Bangladesh leading to empower them successfully!” They also can decide whether to send their children to school or to rice ground and whether to invest their savings in increasing household resource base, buy calves or repay household debt. However, not all women have become really empowered. In a few cases, phone ladies had to cede the management and control on the loan /income to their male counterparts. Furthermore, a few VPOs still becomes the target of anger and abuse of their husbands if they cannot serve meals on time or do fail to give in to the desire of their husbands.

Village phone provides access to telecom services to the rural people. Users of VP uses it for various purposes including to exchange personal information, get information about prices of their produce, to collect business related information and to be in touch with family members, both home and abroad. The VP users stated that that in most cases (63% cases) their expatriate family members/relatives make phone calls from overseas to be in touch with them (Interview with VP users, 2008). More than two-thirds (71%) users reported that the main purpose of using VP is to make calls to family and friends to exchange personal information. A majority user (89%) reported that VP reduced their need for travel to other places as a phone call easily does away with their travel need. They also claimed that their access to information increased due to telephone usage. Their communication expenses also reduced significantly. Around a third of user-respondents reported that VP has helped them to widen their business relationships. In this regard, the voice of one VP user is worth mentioning:

Use of VP has contributed in widening my business networks. Now I can communicate with my clienteles with much ease and at less cost. Previously it was not possible for me to contact the persons living in remote areas (Interview, 2008).

Just under half of the users (49.3%) considered that VP facilitated them to receive emergency updates and to prepare better for disaster management. The findings of the study suggest that the availability of telecommunications services provided by the VPOs benefited village entrepreneurs such as farmers, traders and fishermen in terms of better prices of goods, reduction of travel costs, more employment opportunities, better access to health facilities and better bargaining power.

8. Challenges for VPP program, the hope of continuity and policy implications

The program could be in danger in the near future due to the growing availability of low-cost handsets, diffusion of mobile phones in villages, drastic reduction in mobile phone tariffs,, the continuing rise in teledensity and the introduction of VoIP. Significant reduction in mobile phone tariffs will erode the competitive advantage (affordable tariff rate) of the VPOs. Table 1 shows the declining trend of VPOs’ revenues

Table- 1 Revenue of Village Phone Operators is declining

Year	Annual Revenue per operator
2003	$917
2004	$660
2005	$508
2006	$396

(Source: Grameen Telecom cited in Shaffer, 2007)

The declining trend in the revenue earnings of VPOs poses a great challenge to the sustainability of the much admired VP program. With the rapid expansion of mobile phone penetration in rural areas, and easy accessibility to mobile service in the last 3-4 years, the raison d’être of the program is at question and its continuity is under great threat. This is because of the erosion of competitive advantage the VPO operators used to enjoy in absence of any other competing telecom network and service provider at the village level

Moreover, if any one of the four partners (Grameen Bank, GrameenPhone, Grameen Telecom and VPO) become unwilling to continue this partnership due to lack of trust or for some other reasons, existence and sustainability of the VP Program will definitely be at risk. However, there is a hope that this program will continue as there is a common bondage between the three partners. All the partners share common vision of “rural poverty reduction” which is the vision of Grameen Bank. GrameenPhone and Grameen Telecom, the two sister organizations of Grameen Bank, also have the motto of furthering Grameen Bank’s mission of removing rural poverty (Islam, 2005).

From the above discussion, it is apparent that the shared access model of the VP is profitable only when telephone set is a high value commodity and telecommunications services are not within the reach of the poorest people. Where phone services are within the reach of the poor, mobile phone sets are given free of cost or at a subsidised price, the importance of the VP is then definitely less. Technology and intense competition among the mobile phone operators to reach the rural population have the potential to make the VP obsolete but possibly not within the near future.

The VP model is an example of inclusive capitalism, a principle used by Henry Ford in his car business, i.e., more phones brings price war, price war leads to tariff reduction, more usage, more revenue for GrameenPhone, more income opportunities for more village phone operators (who are mostly women) and productivity for villagers (Sullivan, 2007). Thus everyone is included in sharing the benefits of competition. The inclusiveness of everyone in the model and lack of telecommunications facilities in rural areas provides the hope of continuity of the model.

Implications for policy makers

The VP Program in Bangladesh demonstrates how an innovative idea in the ICT sector can help rural poor women to be empowered and alleviate poverty. The VP is a financial and technological model which provides an important insight that a multi-stakeholder partnership initiative in the ICT sector can reduce delivery cost of partnership activities as well as maximize social welfare if complementary skills and resources of partners could be properly utilized. The significance of the model lies in its ability to make ICT services cheaper and affordable to the poor people living in rural areas (Dang and Sultana, 2008).

The VP model also demonstrates the significance of aggregate purchasing power of a community in making a business viable. The aggregate purchasing power made the bottom of pyramid (BOP) model a successful one where private enterprise gained success by doing business with the poor. Traditionally, most enterprises were sceptical about the possibility of success in doing business with poor people and are reluctant to take risks in a new market segment (Dang et al., 2008). The shared business model (instead of each end user owning a handset, a group of users share one) of the VP made the business a viable one. The VP model makes it clear that entrepreneurs need to go beyond traditional approaches to serve the poor, taking into consideration the specific socio-economic and ICT infrastructure of the country.

Grameen Bank, being the lead firm in the VP model, discovered that avenue by convincing the GrameenPhone to provide bulk airtime at discounted price and thus kept the price within the villagers’ affordability. The bulk billing of airtime at discounted price helped VPOs to be competitive, even after significant reduction of call rate in recent times, and to run the business profitably.

Countries having a similar telecom infrastructure could successfully replicate the model to provide telephone access to the poor with necessary changes to the model. The VP model has already been successfully replicated in some other countries (with modifications according to the country context) including Uganda (Knight-John et al., 2005). Similar ventures have flourished in Ghana and other places where large populations of people cannot afford to own mobile phones (Donner, 2007).

9. Conclusion

In the socio-economic environment that is generally exclusionary, uncertain, and at times discriminatory to poor women, VP alliance has set an unprecedented example by facilitating social-entrepreneurship for them. The VP program in Bangladesh makes a significant contribution to social and economic empowerment of women by developing a social business model. VPOs are now less dependent on income earning family members and reduced their vulnerability vis-a-vis their male partners. The role of the VPOs in the family decision making has increased and they are more recognized in their community. Although some VPOs become victim of abuse by their husbands, most of the VPOs experience is positive. In Bangladesh, where violence against women is widespread, this program has enhanced social awareness and established some institutional support infrastructure However, there is rhetoric of empowerment as well. We do not argue that VP program has made the VPOs rich or elevated their socio-economic position to an upper level. In this paper, we argue that the operation of the VP has offered them a respectable opportunity to be economically in a better position than before. Bangladesh does not have a social welfare program or any economic safety net for the have-nots. This program has provided them an economic safety net and a sense of self-worth by linking them with the income generating activity.

Although mobile phone prices are falling and gradually becoming accessible to the poor, about 70 per cent of the population is still out of reach of telecoms services. To this vast segment of population, a social business model run by Phone ladies is an example that the pioneers can be proud of.

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Annex -1: Questions used to interview selected VPOs

1. Would you please tell me how you got involved in Village Phone Program?

2. What is the total average per day earnings from the Village Phone you operate?

3. Who are the main users of your VP?

4. Would you please describe how this VP has changed your life as a family member?

5. What impact has the VP business had on your social well being?

6. What did you do in your family life before the VP initiative?

7. Do you think that your responsibility has become doubled after your involvement in this business?

8. Do you think that you now enjoy more respect and recognition in the community you live?

Annex 2: Questions used to interview users of VP and village leaders

1. What is your comment on the introduction of VP in your community?

2. For what purposes do you use Village Phone for?

3. Do you think that the use of VP has benefited the rural farmer and other small firms to expand their business?

4. Do you think that VP has benefited the rural farmers in getting market/price information for their produce?

5. Do you think VP has any role in reducing the intermediary role of middlemen in the marketing of agriculture produce of the village population/farmers?

6. Do you think that GrameenPhone’s VP program lifted women’s economic and social position and empowered them?

7. Do you think the airtime business has contributed to the phone ladies to become entrepreneur?

8. Do you think the phone ladies are now getting increased recognition in social functions and gatherings?

9. Do you think that VPOs freedom of mobility has been increased after their involvement in the airtime business?