Nicholas P. Sullivan's Response

Dan Cozart — Sat, 01 Sep 2007 22:27:54 -0400

Interesting response from Nichols P. Sullivan here: http://www.youcanhearmenow.com/?p=97

GrameenPhone Obsolete? Fast Company Says Yes

Rob Katz — Sat, 01 Sep 2007 14:00:16 -0400

Via Aman Bhandari's Technology, Health, and Development Blog, a fascinating take on the 10th anniversary of the GrameenPhone program from Fast Company magazine:

But as it turns out, the [GrameenPhone] legend is far out of date. The proliferation and democratization of technology has bested the economics of microenterprise. In Bangladesh today, the only one making real money on GrameenPhone's wireless service is … GrameenPhone.

I'll be the first to admit being a major GrameenPhone booster, both here at NextBillion and back during the Digital Dividends years. That said, this article isn't surprising. As mobile phones have become cheaper, they have become ubiquitous - even in places like Bangladesh. What follows is basic microeconomics: as supply increases and demand remains stable, prices will go down.

For GrameenPhone entrepreneurs (commonly known as "Phone Ladies") a price drop can be catastrophic. Remember, these phones are purchased on credit, and if their customer bases shrink, it can be difficult to pay back the loan. You won't hear default stories coming out of the Grameen Foundation, but they are real, as Courtland documented a few months back.

(This article continues past the break; click "Read More" to continue)

NextBillion.net - Development Through Enterprise - GrameenPhone Obsolete? Fast Company Says Yes - Comments

Nicholas P. Sullivan's Response

GrameenPhone Obsolete? Fast Company Says Yes