While the issue of bridging digital divide is getting priority in development agendas in many developing countries financing ICT4D projects still remains a challenge. In the context of the developing countries governments are confronted with numerous development priorities and are committed to address multiple development problems such as, poverty, environmental degradation. Given this context, it is unlikely that these countries are able to initiate sustainable and effective mechanism to finance projects that promises to improve living standard of poor people.

In order to address this challenge, multistakeholder partnership approach is increasingly becoming a viable and influential strategy to finance ICT4D projects in the developing countries. Village Phone program in Bangladesh has emerged as a success story of attracting financial involvement and support from a number of stakeholders including domestic and international business enterprises, NGOs, non-profit and multilateral and bilateral donor agencies.

With the noble mission of connecting unconnected people in rural Bangladesh (seventy percent of the population) through mobile telephony the Village Phone has brought significant positive change in the landscape of rural Bangladesh. Currently Village Phone has a subscriber base of 140 thousands women covering forty thousand of Bangladesh’s sixty five thousands village.

Village Phone is an innovative programme to bring new information technologies to the isolated rural areas while at the same time, to address issues of poverty and women empowerment. All of the village phone operators are rural women who received micro credit from Grameen Bank to own mobile phone. The village phone operators earn money by providing mobile telephone services to their fellow villagers. The program thus helps rural poor women to be financially empowered while provide previously unavailable telephone services to the villagers. A number of studies show that the Village Phone program has impacted positively on rural economy and contributed to help rural women jump from poverty.

Village Phone was created in 1997 with financing from diverse stakeholders. The financing structure of the Village Phone programme is multidimensional being represented by stakeholders from diverse sectors ranging from non governmental organizations to multinational companies.

The Village Phone programme is managed by the Grameen Telecom, a non-for-profit in Bangladesh and financially supported by the Grameen Bank, the largest microfinance instituting in the country. GrameenPhone, one of the largest GSM mobile phone operators, extends tariff discount to Village Phone operators through Grameen Telecom. GrameenPhone a joint-venture company, created by Norway based telecommunication giant Telenor, Grameen Telecom, Marubeni, Japan and Gonofone, a business enterprise registered in USA. GrameenPhone took $60 million as loan from the World Bank’s International Finance Corporation (IFC), Asian Development Bank (ADB), UK Commonwealth Development Corporation, and NORAD/NORFUND of Norway. GrameenPhone uses Bangladesh Railway (owned by the government) 1,800 km fiber-optic network facility as a backbone infrastructure.

A number of international organizations such as, InfoDev of World Bank, IDRC, UNDP, Markel Foundation, USA, and Development Gateway Foundation helped to disseminate information on Village Phone world wide. The programme has already been replicated in Rwanda and Uganda with financial support from loans from World Bank and grants from Grameen Foundation USA.

With support form Grameen Bank, the programme is managed by Grameen Telecom which participates in GrameenPhone as equity investor (35%). This participation was possible with funding from US based Soros Foundation and recently it was refinanced by the local bank with a guarantee provided the Soros Foundation.

Impressive success of the Village Phone demonstrates viability of multistakeholder partnership approach in financing ICT4D projects. All partners were involved in the planning and implementation of the project, have ‘shared resources and risks’ to achieve common goals and worked together toward sustainability of the partnership. The “marriage” of Foreign Direct Investment and Overseas Development Assistance (ODA) in the Village Phone Programme meets the objective of global partnership as expressed in Target 18 of the Millennium Development Goal (MDG) 8: “In cooperation with the private sector, make available the benefits of new technologies, especially information and communication technologies”. The Village Phone also complies with the Plan of Action of the World Summit on the Information Society (WSIS) held in Geneva in December 2003.4 It highlights the role of the private sector not only as a market player but also as an effective and dynamic stimulator of development using information and communication technologies. .

Institute of Development Studies (IDS)
School of People, Environment and Planning
Massey University
Palmerston North, New Zealand
Website: http://dev.massey.ac.nz/
email : nazrul07@gmail.com , nazrul07@fastmail.fm
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