Using Cellular Phones in Uganda for Rural Income Generation and More

In a small village in Uganda, the entire community gathers every night at a local shop with a Village Phone. They bring their FM radios and together the community listens to national call-in radio shows. They use their cell phone sponsored by the Village Phone Uganda (VPU) Project to call in to the radio shows and voice their opinions to the rest of the country.

Josephine, a new phone lady describes the services and prices to her community. Under the VPU Project, Grameen Foundation USA has teamed up with MTN Uganda to extend cell phone coverage throughout rural Uganda. dot-ORG is working with Grameen on strategic planning, training and monitoring and evaluation of the program.

On March 9th, dot-ORG invited David Keogh, Sr. Technical Program Manager (Grameen Foundation USA) to present the Village Phone Uganda Project to USAID staff and NGO partners. Mr. Keogh gave an overview of Grameen's Village Phone Program in Bangladesh, its adaptation in Uganda, and provided plans and thoughts on the next replication of MTN villagePhone, leveraging the success in Uganda.

Rolling Out Village Phones
Grameen Foundation is partnering with Mobile Telephone Network (MTN) Uganda and nine microfinance institutions to create a new company, MTN villagePhone. Using microfinance loans, MTN villagePhone sells cellular phones to female entrepreneurs in rural areas, who then sell time on the phones to others in their communities.

This venture generates income for the women and offers affordable telecommunications access to rural communities. Cellular phone clients have used the phones for a variety of purposes, including conducting business transactions, communicating with family members, participating in call in radio shows, and checking the price of agricultural goods.

60 New Phones Deployed Per Month
MTN villagePhone was formally launched in November 2003 with a ceremonial call placed from a Village Phone operator to the Vice-President of Uganda. As of March, 2004, MTN villagePhone has over 400 phones in the field and is deploying phones at a rate of 60 per month, well ahead of original projections. Usage of the phones is also about 25% higher than originally projected.

John Nasasira, Vice-President of Uganda, receives the first call through the program. Village phone operators are offered two different "starter kits" which they can purchase, depending on their equipment needs (e.g. whether they need a car battery or solar panel to recharge their mobile phone). All of the starter kits include a mobile phone, SIM card, prepaid airtime card, business cards printed in the local language, and a sign advertising the business and showing rates.

Some Initial Lessons Learned
Seven months into the VPU project, the project team has begun to gather some initial lessons. First, the VPU Uganda project has evolved differently from the Bangladesh model. For example, in Uganda there is much greater diversity in the microfinance portion of the activity. Currently nine different microfinance institutions (MFI) in Uganda are partnering with MTN villagePhone, offering 6 - 24 month loan products. The MFIs determine which loan product to offer the participants in Uganda, unlike in Bangladesh, where a standard two-year loan cycle was the only offering.

Second, there is a wide range of business management capacity amongst the VPOs. Some of the operators have strong business management skills (e.g. cash flow management, marketing) while other operators lack these essential skills. For this reason, dot-ORG sponsored the Washington, DC-based firm Making Cents to provide customized business management training for the participating MFIs so that they can support the VPOs.

Grameen is currently researching where next to replicate the Village Phone program, including Vietnam, Indonesia, Morocco, and Rwanda.

AED/dot-ORG and Grameen Foundation-USA signed a collaborative agreement on May 5th, 2003 for a period of three years. AED's support to this program is funded by USAID/EGAT/EIT/IT under the dot-ORG Leader Award No.GDG-A-00-01-00014-00.

Copies of the presentations offered by the panel may be downloaded below.

For More Information, Contact:
Michael Tetelman
Acting Director, dot-ORG
Academy for Educational Development
Tel: 202 884 8856

David Keogh
Sr. Technical Program Manager, Village Phone Uganda (VPU) project
Grameen Foundation USA
Tel: +1 206 325-6690 x203

Tim Wood
Sr. Technical Program Manager, Village Phone Uganda (VPU) project
Grameen Foundation USA
Tel: +1 206 325-6690

Related Resource Partners
Related DOT-COM Activity
Uganda - Village Phone Uganda (VPU) Project
Related DOT-COMments Newsletter Articles
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