2. The Village Phone's Impact on Poverty Reduction

2.1 The Village Phone operator
2.2 User analysis and village-level impacts
2.3 Financial remittances from overseas workers and phone use
2.4 Consumer surplus made available through Village Phone use
2.5 Gender analysis
2.6 Satisfaction levels of users

2.1 The Village Phone operator⁷

This section begins by shedding light on the Village Phone operator, her role in the household, the dynamics of the household and her role in the village. This requires both a qualitative and quantitative portrait of her situation.

Who becomes a Village Phone operator?
A VP operator is always selected by the Grameen Bank from among its borrowers: since 95% of GB members are women (123,790 men vs. 2,246,340 women), VP operators are usually female. As the Grameen Bank deals with the poor, it is to be expected that the VP operator will come from a poorer-than-average household in the village. According to the Bayes et. al. (1999) study, phone-owning households were confirmed to be poorer than the villagers in general, regardless of whether land ownership or per capita income was used as a measure. However, the Bayes study also reports that in terms of social indicators, phone-owning households seem to be leaders in terms of literacy, child immunization rates, use of safe drinking water, and sanitary latrines. The rate of family planning households was 74% among VP operators compared to 57% among villagers in general. The differences may be attributed to the fact that all the phone-owning households are members of the GB, while only 37% of the Bayes sample villagers reported to be members of any NGO (Bayes et.al., 1999 p.15). Also, local Grameen Bank managers are asked by Grameen Telecom to recommend candidates who have demonstrated successful participation within their borrower groups and have shown that they can operate a profitable small business.

What is the net income for the household?
In the Bayes report, the income derived from the VP was reported to be about 24% of the household income on average; in some cases, it was as high as 40%. Both phone-owning households and others in the village derived the largest proportion of their income from non-agricultural activities (47% and 62% respectively). On average, the VP operator earns a net profit of 277 Taka per week (Bayes et.al., 1999); however, a much higher average net revenue is reported by GTC at 2,000 Taka/month (Grameen Telecom, 1999). On average, the VP operator earns an income of 14,400 Taka or roughly $300 USD per year from providing telephone services. This exceeds the average per capita income of Bangladesh ($286 USD) by $14 USD. Most of the VP operators interviewed for this study indicated that the income earned through the VP was a supplement to income earned from other sources.

Village women are becoming increasingly empowered through Grameen Bank programmes

How does the VP operator's status change in the household? The degree of empowerment of a woman with regards to micro-credit has been closely linked - among other factors - to the extent to which she controls the loan (Goetz and Sen Gupta, 1999; Hashemi et.al., 1996). In some cases, where the loan is provided as cash and the husband becomes the main decision-maker on the use of the money, negative consequences have been reported in the literature in terms of increased indebtedness and family violence. In such circumstances, the woman was seen as taking on the transaction cost of lending to men (Goetz and Sen Gupta, 1996; Rahman, 1999). In the case of the VP, we are not aware of any study that reports a comparable situation with regards to the husband taking control over the telephone. However, in our field visits, we did encounter one such case where the phone was in the hands of the husband (quite literally, and throughout our visit) who used it as part of his bazaar store business just 50 metres away. This led us to probe further and ask a number of questions about the implications of not having access to the phone (see Section 2.5 for more details).

Relative to the circumstances reported in the critical articles mentioned above, the VP operator at present does have some unique advantages. First, the revenue stream from the telephone is substantial. This seems to elevate the woman's position in her own household, particularly in regards to decision-making, and our interviews with VP operators and phone users confirmed this [see related video clip - 577K]. Second, even when the phone may be in the man's control during the day, it is often moved to the house at night (where more women phone users tend to congregate). Lastly, because it is an in-kind loan, it cannot be used as capital for another, riskier enterprise which might not be in keeping with the Grameen Bank loan agreement.

2.2 User analysis and village level impacts

Who are the Grameen Bank members who are potential phone users?
During our field visits to communities in rural Bangladesh, we surveyed only Grameen Bank (GB) members. Most GB members are women and most can be considered to be among the poorer segment of village population, thus our focus on GB members should shed light on the role of the Village Phone in poverty reduction. The median age groups surveyed were between 26 to 30 and 31 to 40 years of age. Fully 90% of the sample was married. Almost half had no formal education, a quarter had only some primary school education, and a quarter had some high school education. In stating occupations, 36% stated that they were primarily involved in household activities, about a quarter stated they were self-employed service providers (e.g. sewing, midwife), another quarter stated they were traders or business people selling goods from a business they owned, and about 8% stated that they were primarily involved in agriculture. Only 6% described themselves as employees of businesses or government.

Based on initial field visits, we became intrigued by the importance of village members using the Village Phone to stay in contact with village members who had become overseas workers or who were working in Dhaka. Our surveys and interviews reflect this interest and enabled us to shed new light on the important role the Village Phone plays in facilitating the transfer of financial remittances to family members residing in rural areas. We hypothesized that having a family member working overseas would have a significant impact on Village Phone use, in terms of calling/receiving patterns and in terms of willingness and ability to pay for phone calls. We found that 38% of the sample had at least one family member from their household living overseas, which in itself demonstrates the degree to which external migration for work is currently having an impact on village life in Bangladesh. Income from family members working overseas was indicated by 36% of those surveyed, with a typical monthly income received of about 3,000 Taka or about $62 USD per month. The monthly household income, not including money received from family members overseas, had a mean of 5,000 Taka or about $102 per month.

The income received in the form of remittances from overseas workers is a substantial part of village income. For those with family members working overseas, the remittance income they receive accounts for about 50% of family income. If we assume that the Bayes (1999) study is correct and the average village family has 6.18 members, then we can make a rough estimate of the mean per capita income for our sample of Grameen Bank members. If the mean monthly household income is 5,000 Taka, then we multiply by 12 months and divide by 6.18 and multiply this by the exchange rate to calculate a $198 USD per capita income for the sample. This would mean that the Grameen Bank member population has a much lower per capita income than the $286 USD per year of the average Bangladeshi. We conclude, and our interviews support this conclusion, that attracting additional income from family members overseas is very important to Grameen Bank members, and the Village Phone is a key tool used to ask for remittances and to reduce the risks associated with remittance transfers.

Ranking wealth is always a challenge in rural research. In this case, we used a set of indicators to see if we might see some correlations between a specific wealth indicator and phone use. In terms of the overall sample, 50% indicated that their household owned at least one cow, 54% of households indicated radio ownership, 34% indicated television ownership, and the mean amount of money reported to be required to construct the respondent's house was 35,000 Taka or $715 USD. However, we did not find any significant correlations between these independent variables and the dependent phone use variable. This serves to highlight the importance of having a family member working overseas being a key variable influencing phone use.

Who is using the Village Phone?
Of the 292 Grameen Bank members surveyed in their villages, 34% reported never having used a phone while 64% reported having used a phone at least once. Having a family member working overseas was significantly correlated with phone use, with 75% of respondents with a family member working overseas reporting that they had used a phone while 45% of people with no family members working overseas had never used a phone. In other words, if we were looking at a hypothetical village where no families had household members working overseas, only 55% of the Grameen Bank members in that village would be phone users, whereas in a hypothetical neighbouring village where each family had one household member working overseas, 82% of the Grameen Bank members would be phone users. The proportion of phone users versus non-phone users also increases in direct relation to increases in the proportion of household income received from family members working overseas. Our dataset indicates that the single most important variable in relation to phone use is whether or not a household has a family member working overseas.

There is also a clear correlation between respondents who have used a phone and respondents with higher average monthly incomes. Approximately 40% of those with average monthly household incomes (inclusive of money received from relatives working overseas) of 4,000 Taka or less reporting having used a phone, whereas 89% of those with average monthly incomes of 4,000 Taka or more reported to have used a phone. We also found a strong correlation between the percentage of household income received from family members working overseas and phone use, with those reporting higher percentages being more likely to have used a phone.

In ranking Grameen Bank member respondents according to the levels of poverty employed by Bayes (1999), over 10% of phone users in our survey would be ranked as "poor" and 90% as "non-poor." Conversely, 73% of non-users could be ranked as "non-poor" and 27% as "poor." This echoes with Bayes' study which showed that 15% of the poor are phone users. Bayes found that one-fourth of the total phone calls are made by the poor segment of rural population, thus implying higher use density among the poor.

Who is not using the Village Phone?
When respondents who indicated that they had never used a phone were asked why, 78% reported that they had no one to call, which may be an indicator of a household in which members experience little migration for labour. Indeed, 83% of non-phone users had no family members working overseas. As reasons for not using the phone, only 7% indicated that they did not know how to use a phone. It is important to note that none of the non-phone users indicated that phone use was too expensive. This would seem to indicate that the cost of telephone use is not a significant barrier to phone use, as we had originally surmised from initial field visits.

When non-phone users were asked if anyone else in their household might have used a phone, 71% said that no one in their household had used a phone, 26% said that men in their household use the telephone more than women, only 2% reported that women in their household use the telephone more than men, and 1% reported that there were both men and women in their household who had used the phone. There is a marked gender difference between non-phone users and phone users in their responses to this question. Among phone users, the results were much more equal with 35% of respondents reporting that women use the phone more than men, 23% reporting equal use among women and men, and 39% reporting that men use the telephone more than women.

Among non-phone users, when asked how far they would be willing to travel to make a phone call if they needed money badly from a family member in another country, 39% reported that they would be willing to travel over 10 kilometers. This compares to 33% of the phone users stating that they would be willing to travel over 10 kilometers, illustrating little significant difference between non-phone users and phone users on this question.

When asked how much they would be willing to pay for a 3-minute call if they needed money badly from a family member overseas, the mean response (64% of non-phone users) was between 100 and 300 Taka. Phone users indicated a slightly strong disposition to pay more for a similar call, which may simply indicate a better understanding of the costs of overseas calls.

When asked what they thought they might potentially use a telephone for, 63% of non-phone users indicated they might use the phone to discuss financial matters or remittances with family members. This provides additional evidence for the importance of the phone in facilitating the flow of income and wealth within a family. Among phone users, 42% indicated that their main use of the phone was to discuss financial matters or remittances with family members, and 44% reported social calls as being their main use of the phone.

Among female non-phone users (the majority of respondents to this survey were female), 58% said that they would prefer to use a phone operated by a female and 39% said that it did not matter. Only 3% indicated that they would prefer to use a phone operated by a man. Interestingly, among the small number of male non-phone users surveyed, these numbers were reversed.

How is the Village Phone being used?
The main reasons Grameen Bank members reported for using the telephone are discussions of financial matters with family, including discussions of remittances (42%) and social calls to family and friends (44%), accounting for 86% of all calls. While the Bayes survey and report focused on the value of the Village Phone for accessing agricultural pricing information, improving bargaining power with middle-persons, and resulting higher prices gained for local farm products, our results indicate that the predominant economic benefit derived by Grameen Bank members who use the phone are related to the facilitation of the flow of income and wealth between overseas workers or workers in urban cities such as Dhaka and their families in rural villages. The remaining categories of phone calls indicated by respondents included business calls (7%), calls involving matters of illness or death (4%), calls for arranging travel and visas (2%) and calls involving educational arrangements (1%). [Please see related video clip - 500K]

Qualitative interviews with phone users provided us with anecdotal evidence of the ways in which telephone use can reduce the risk and the transaction costs associated with the transfer of funds, and help families in villages provide their wage-earning relatives with timely reminders of the need for funds at home. Using the phone to arrange for safe passage of funds and verification of the amount of funds being transferred were common comments among phone users interviewed.

Funds received from overseas workers and wage earners in urban areas make up a significant proportion of aggregate household income within a rural village. In the poor rural areas of countries such as the Philippines, Haiti and Bangladesh, where wage-earning potential is significantly greater and more attractive outside of the home country and beyond the village, remittances from relatives can become the single most important source of income for village members. This income is used for providing for basic needs, as well as for contributions to infrastructure, health and sanitation at the household and village levels. A telephone call that solicits remittances or helps facilitate the smooth flow of remittances is a critically important call, one that can be worth many multiples of the cost of completing the call.

The majority of telephone traffic by Grameen Bank members surveyed is between rural villages in Bangladesh and places overseas where family members have gone to work. The majority of other telephone use is between the village and Dhaka city and other urban areas in Bangladesh where relatives and friends have gone to work or study. The majority of calls (61%) are calls that are received, not dialed, by phone users, and proportionately most of those calls originate from outside Bangladesh. Phone users are more likely to dial calls themselves when the other party resides within Bangladesh: the closer the other party is to the phone user, the more likely they are to dial the call than they are to receive the call. Received calls last significantly longer than dialed calls, and the length of call varies directly with the distance of the other party from the village.

Data obtained from Grameen Telecom for the period between 21 September 1998 to 20 October 1998 (a period when most Village Phones were located close to Dhaka) reflects our survey results. The percentages of different categories of calls dialed from 134 Village Phones were:

• Local (BTTB) - 67.97%
• GrameenPhone mobile - 17.70
• Other mobile - 6.05
• Nation-Wide Dialing (NWD) - 4.35
• International Subscribers Dialing (ISD) - 3.93

These numbers are virtually reversed when we look at data for calls received.

These results demonstrate that rural telephony is driven a great deal by urban realities and the realities of globalization. The people who place calls to their families in rural villages from telephones in Kuwait, Riyadh or Dhaka benefit as much or more from these telephone calls as do the rural receivers. As well, the majority of income available for rural telephone use is based with the telephone user in Kuwait, Riyadh or Dhaka. We conclude that families that have overseas workers or members earning wages in Dhaka are generally better off, and the phone acts as a lubricant to keep money flowing to the village with the fewest transaction costs.

Unfortunately, due to poor interconnection agreements and poor tariff structures, much of the telecommunication revenue generated from these incoming calls does not contribute to the maintenance or expansion of rural telecommunication services, which is a source of significant grievance for rural telephone operators such as BRTA and Sheba that are trying to expand service in a very challenging rural marketplace. This is reflected in phone user reports of the cost of their last telephone call: much of the expenditure for calls costing 1 to 100 Taka are paid for the privilege of receiving calls on a Village Phone. Just under 22% of calls generate local revenue of more than 100 Taka per phone call.

Among the 194 phone users sampled, 83% reported using the phone in the last three months. Frequency of phone use appears to be fairly evenly distributed across the occupational categories of all respondents, although there is a small but significant positive correlation between the average length of calls reported and the "government worker" occupational category. Perhaps this indicates that a government body is responsible for paying the cost of these calls and not the Village Phone user, or perhaps the nature of the business conducted on the phone requires lengthy conversations. No one in this occupational category reported having an average call length of less than seven minutes.

There is a significant correlation between respondents who receive larger amounts of money from relatives working overseas with the amount of money spent on phone calls. The mean length reported for an average phone call is three to six minutes. Interestingly, we note that when age is a variable, people 51 years and older tend to make shorter calls than their younger peers. As well, when age is a variable, we note that respondents aged 15 to 25 have, as a cohort, fairly consistent monthly spending habits located in the 100 to 300 Taka range. Other age groups exhibit a more normal curve across spending ranges.

We also note a tendency for more frequent callers to keep their phone calls within the range of three to six minutes. Perhaps this is indicative of the adoption of "phone culture" and an understanding of how to conduct conversations efficiently which is gained with more frequent use.

2.3 Financial remittances from overseas workers and phone use

Why are remittances such an important factor in Village Phone use?
Bangladesh is a labour-exporting country with many rural villagers (predominantly men) working in the Gulf States. When transferring remittances home, many Bangladeshis prefer to avoid formal banking system channels and use informal means to transfer funds to family members at home. Remittances from overseas workers have important micro-implications for rural households and villages.

In Bangladesh, large numbers of workers find their employment overseas through unofficial channels and similarly use unofficial means for transferring remittance payments to family members. Unofficial remittance transfer methods are used to avoid exchange rate over-evaluation (which acts as an implicit tax), high bank charges, long delays in cashing cheques in foreign-currency denominations, and general uncertainty about the integrity of national financial institutions. Foreign workers will often resort to keeping earnings in foreign bank accounts and transferring foreign cash to relatives through kinship and friendship networks. Despite the risks involved in informal cash transfers, the benefits appear to outweigh the risks associated with official transfers through an inefficient banking system combined with restrictive foreign exchange practices. Once cash is received in Bangladesh by a family member, it can be saved, exchanged with local money traders, or used as an alternative local currency for purchases and productive investments.

At the micro level, remittances tend to be used for daily household expenses such as food, clothing and health care (Puri, S. and Ritzema, T., 1999). Remittances are thus an important factor in meeting household subsistence needs, and can make up a significant portion of household income. Remittance funds are also spent on capital items including building or improving housing, buying cattle or land, and buying consumer goods such as portable tape/CD players and televisions. Once subsistence needs are met, remittances tend to be used for "productive investments," or for savings. Starting a small business or buying land enable families with migrant labourers to improve their local socio-economic standing in relation to established capital owners in the village. There is some evidence that remittance income can help poor families transcend long-term indebtedness and break free from the hold of moneylenders. This would especially be the case when families have accrued the business experience necessary to make effective investments, a key ingredient among families with Grameen Bank members.

The Village Phone acts as a powerful instrument to reduce the risk involved in remittance transfers, and to assist villagers in obtaining accurate information about foreign currency exchange rates. Transferring cash from a Gulf State to a rural village in Bangladesh is fraught with risks. Cash is often placed in the hands of other foreign workers who are returning home and, without access to reliable communication, there is no way for the transferee to notify relatives about the transfer or the amount of the transfer to expect. Reports of outright theft of cash, deductions from the original transfer amount, and extreme delays in the receipt of remittances are common. The Village Phone enables the transferee to provide timely and accurate information on the amount of the transfer, details on the person acting as courier, and the expected arrival date of the cash. In essence, the Village Phone is a risk management tool for improving the transfer of remittances.

As well, the Village Phone is used by rural families in Bangladesh to stay in touch with relatives overseas and keep them informed of family conditions (health, education, etc.) and family business developments. When there is a need for remittance transfer, family members can use the Village Phone to make a direct request for funds from the overseas worker. Without the Village Phone, there are few reliable avenues for staying in touch and making such requests. Given our data on Grameen Bank members' use of the Village Phone for financial discussions with family members, their clear view of the importance of the service for contact with overseas workers, and the significance of remittance transfers for family welfare, we conclude that the Village Phone plays a very important role in poverty reduction.

It has been suggested (Puri, S. and Ritzema, T., 1999) that labour-exporting countries would benefit from policies and programmes that enable micro-finance institutions that are trusted at the village level to play a key role in channeling remittances, thus ensuring that families have access to safe and secure savings and credit schemes as well as business skill development programmes. The Grameen Bank's long-term focus on providing electronic communication facilities between its head office, zonal offices and branch offices, together with the telecommunication infrastructure of GrameenPhone, are important steps in enabling it to provide safe electronic banking services that could assist with channeling remittances from overseas workers to their relatives in villages.

In the Philippines, BayanTel offers "phone shop" services in over 300 public calling offices nationwide, including facilities for domestic and international money transfer. BayanTel's money transfer services are especially popular with overseas workers and their families. The Grameen Bank and GrameenPhone have most of the technical, telecommunication, and financial pieces needed to establish similar electronic money transfer services to the branch office level. It is likely only a matter of time before these services emerge.

2.4 Consumer surplus made available through Village Phone use

The Village Phone is a communication tool that provides very real and very substantial financial, travel and productive-time savings for rural villagers. Our analysis of the consumer surplus gained through phone use demonstrates that the Village Phone is clearly a cost-effective tool for enabling rural people to take active roles in productive activities and life outside the village.

Consumer surplus is a measure of how much a phone user gains by using a telephone rather than an alternative means of communication. In rural Bangladesh, the most common form of alternative communication is personal travel, and the costs associated with personal travel include transportation costs and the opportunity costs associated with being absent from normal village labour activities. Some indicative consumer surplus (real savings for users) measurements among public calling office phone users and phone owners in other developing countries are noted below:

• Savings of between 2.5 and 5.5 times the cost of a telephone call in Andhra Pradesh State in India (Saunders, Warford & Wellenius, 1994)
• Savings of at least four times the revenues paid to the telephone operator for telephone rentals in Egypt (Ibid)
• Savings of ten times the cost of business calls in Kenya (Ibid)
• Loss of 25% annual growth in business and expenditure of several thousand dollars per year among business organizations without phones in Tanzania (Ibid)
• Benefits of providing agricultural cooperatives with phones in Uganda estimated at $500,000 per year (Ibid)
• Savings of 13.5 and 20.1 times the cost of telephone calls for Northern Luzon and Northern Mindanao (respectively) in the Philippines (Ibid)
• Savings of 2.6 times the cost of telephone calls in rural Thailand (Asian Development Bank, 1996).

In order to gain an understanding of the true value of a single telephone call for Grameen Bank members in terms of consumer surplus, we created a formula for equating the distance of a village from Dhaka with a conservative cost for travel to Dhaka from a village.

Our calculations indicate that that a single phone call made to facilitate, for example, a remittance payment from a family member wage labourer in Dhaka City can have a consumer surplus ranging from 2.64% to 9.8% of mean monthly household income. The cost of the trip ranges from 1.93 to 8.44 times the cost of the phone call, meaning real savings of between 132 to 490 Taka ($2.70 to $10 USD) for calls that substitute for travel between a village and Dhaka. [Related video clip - 277K]

It is important to note that our sample group of Grameen Bank members is over 90% female, and females from rural areas in Bangladesh might have difficulty traveling to Dhaka without a male escort. It is safe to assume, however, that a productive male family member might be sent to Dhaka to act on behalf of a woman. Widowed and divorced women who account for over 8% of the people in our sample might have considerable difficulty making such a trip on their own, or finding a male to go in their stead. As well, many married women have husbands who are working overseas or who may be working in an urban area such as Dhaka City, and they too could experience these difficulties. Thus, it is probably safe to say that the consumer surplus for women would often be higher than we have conservatively calculated here because of the challenges associated with a woman making a journey to Dhaka City from a rural village.

New Grameen Bank members proudly displaying their memberships

2.5 Gender analysis According to Grameen Bank staff, out of the 2,300,000 Grameen Bank borrowers in Bangladesh, 95% are women who lack any collateral to borrow money from conventional banks. Micro-credit has been targeted towards women as a tool for poverty alleviation. In parallel, the Grameen Bank offers literacy training, skills development, health advice, family planning, and political consciousness education as part and parcel of its micro-credit programmes. Grameen Bank and the Bangladesh Rural Advancement Committee's (BRAC) micro-credit programmes boast a rate of repayment of over 97% of the loans. [Related video clip - 508K]

The focus on poverty alleviation through micro-credit for poor women has attracted much attention internationally, particularly in the case of Bangladesh. The financial sustainability of these micro-credit organizations has been positively reviewed by multi-lateral organizations (World Bank, 1995; Khandkher and Khalily, 1996), although the extent to which micro-credit has had a positive impact on women's empowerment has been under scrutiny. In reviewing the literature, we came across substantial evidence of positive accomplishments, both in quantitative and qualitative terms (Hashemi et.al., 1996; Jain, 1996; Bayes et.al., 1999). However, we also identified critical reports describing problems that arise within households when women are not able to maintain control over loan resources (Rahman, 1999; Goetz and Sen Gupta, 1996). The latter were a useful point of reference to examine the potential advantages of phones relative to other loans, and the possible constraints of the VP programme in terms of empowering rural women.

Our focus

Our review of gender issues in the Village Phone programme of Grameen Telecom focused on the following types of questions:

• How does the VP enhance a woman's condition in her household and her status in a village?
• How does the VP differ from other Grameen Bank loans in terms of empowering women?
• What impact does a VP have on a village woman's daily routine?
• Are there differences in usage patterns when the VP is operated by a man?

Our findings about female operators

Rural women in Bangladesh, particularly in villages that are distant from the influence of urban centres, are limited by traditional patriarchal society in many ways, including the extent to which they are able to move around and beyond the village without a male escort. This is especially aggravated when their husband is absent, which is rather common due to the large number of Bangladeshi foreign workers. The degree of mobility is one of eight indicators used in a study to assess the degree of women's empowerment (Hashemi et.al., 1996). Having a telephone in the house may therefore be not only a profitable business opportunity for a woman operator, but also a space that is acceptable for other village women to access. Our findings indicate clearly that when women are VP operators, female Grameen Bank members are more likely to feel comfortable using a phone and will more likely have more equitable access to a phone. [Related video clip - 256K]

There is evidence of increased social status that Village Phone operators have gained in their villages. For example, the fact that better-off villagers now come to a poorer woman's house to use the phone is significant (Bayes et.al., 1999). The woman's house is a centre of activity, with people waiting to make or receive calls. Moreover, the woman becomes very aware of the private and personal matters of many villagers. These factors, plus the added income, contributes to her increased status in the village (Bayes et.al., 1999).

During our interviews with women Village Phone operators, we witnessed how the phone is being integrated into a woman's busy routine, both day and night. When the phone is a mobile phone, the operator has the ability to keep it with her while she is doing household chores or operating another business enterprise. While there is clearly an inconvenience with phone calls and errands, most women operators we interviewed felt that the benefits override the limitations. The average income earned contributes between 30-40% of the household income (Bayes et. al., 1999). It is therefore not surprising that many family members of the Village Phone operator are involved in the business. When a phone call is received, children are sent off as messengers to inform a village member. Husbands, sons and daughters of VP operators that we met proudly confirmed that they knew how to operate the phone. Adolescent children were able to easily tell us the international dialing codes for countries such as Saudi Arabia and Kuwait.

Our findings about male operators

The Village Phone is provided to the woman operator as an in-kind loan from Grameen Bank, whereas other types of loans (general, seasonal, house or leasing) tend to be in cash. Secondly, in some areas where the signal is weak, GTC has also found it necessary to add high gain fixed antennas to the phones. This technical solution fixes the GSM cellular telephone to one place, most often the woman's house. These two factors mean that the VP operation is very visible; in other words, where a male member of the family becomes the operator, the situation is easy to identify⁸. This is significant because studies by Rahman (1999) and Goetz & Sen Gupta (1996) illustrate cases where Grameen Bank member women are unable to maintain control over loans, and the uses to which loans are put are sometimes governed by husbands. In such cases, the woman becomes a vehicle for the man to access a loan from the Grameen Bank without the man having to necessarily abide by Grameen Bank principles.

During our survey instrument pre-testing visits to villages, in one case we witnessed where a VP was supposed to be operated by a woman but was in her husband's control at his village store. In this case, it was difficult not to see the obvious indicators of the location of the high gain antenna and the fact that the phone never left the man's hands. When asked if she could tell us the international dialing code for Saudi Arabia, a number that every other VP operator could tell us instantly, the woman was only able to answer after being prompted by her husband. When we spoke to women in this village, we could find only a small few who had actually used the phone. This case helped confirm our finding of the gendered nature of universal access when the phone is operated by a man in a rural Bangladeshi village. It also increased our focus on the importance of gender in examining the Village Phone program.

Interestingly, when asked about this particular instance, Grameen Telecom field staff and Grameen Bank managers did not seem to share our understanding that women's access to the phone would be limited. This might have something to do with the fact that virtually all the Grameen Telecom staff and Grameen Bank managers we met were men.

If Grameen Telecom is to fulfill its ambition of universal access, then its staff, and the Grameen Bank managers with whom it facilitates the Village Phone program, need to review the conditions necessary for universal access among both men and women. From the standpoint of revenue generation and profitability, it is important to ensure that the Village Phone is fully accessible to the entire village population. If 50% of the user base faces obstacles to phone use, then a significant revenue stream is lost.

Phones for men and phones for women

Based on the experiences above, in the process of analyzing our data, we decided to pay particular attention to the gender of the Village Phone operator and the impact of gender on phone use patterns.

Our research team further reported that at some of the Village Phone sites where men were operators, often at marketplaces, it was difficult to find female Grameen Bank members with whom to conduct an interview. Indeed, a review of our data reveals that at 6 specific Village Phone sites where the operator is a man, there is a consistent pattern of 100% male interviewees at these sites, despite the research team's efforts to locate female users. All 5 of the sites located in Chittagong district fit this pattern, as does one site in Singhar thana. We are unable to explain the disproportionate number of male Grameen Bank members sampled in these areas.

However, at the other four sites where the operator happened to be a man, the research team was able to interview relatively even numbers of male and female Grameen Bank members. Conversely, at none of the 32 Village Phone sites where the Village Phone is operated by a woman did the team have the opportunity to interview a male Grameen Bank member. Given that 95% of Grameen Bank members are female, this was an expected result.

Our data from Grameen Bank member phone users reflect these disproportionate male operator cases. Of the 56 male Grameen Bank members surveyed, 36 (64%) were interviewed in the six villages with a male operator and where only men were able to be included in surveys. Among all male phone users surveyed, 44% indicated that they would prefer a male phone owner, 6% indicated that they preferred a woman phone owner, and 50% said that the gender of the phone owner did not matter. However, when asked the gender of the person who provided the phone service for the most recent phone call that they made, 93.75% of the male phone users indicated that a male phone owner had served them. In the case of female respondents, 52% of female phone users responded that they preferred a woman phone owner, 2% preferred a male phone owner, and 46% had no preference; however 82.1% of the female phone users indicated that their most recent phone call had been served by a female phone owner.

Our data would seem to strongly confirm that men tend to use telephones owned by male operators while women prefer female operators, an important consideration when trying to expand phone service and ensure universal telephone access for both men and women. Our field interviews confirmed this as we probed this issue further. Women indicated that they preferred visiting the home of another village woman in order to use the VP, versus visiting a nearby market shop. Some phone users mentioned that it was simply more convenient to visit the home of another village woman to use the phone because their daily activities were spent within a cluster of household compounds. Others mentioned that because they knew the female VP operator they felt comfortable using the phone in her home. Several indicated that because they rely on the VP to receive calls, not to place them, that they could count on the female VP to locate them when they received an incoming call. Finally, members of our Bangladeshi research team told us that in more traditional villages it is frowned upon for women to be seen publicly in marketplaces that are dominated by men.

Gender and phone location

In the near future, fixed public phones will become increasingly common in rural Bangladesh. If normal assumptions are made about high human traffic areas (such as marketplaces) being good places to put pay phones, to maximize phone revenue, new phones are likely to be placed in high traffic areas that are not frequented as much, or as often, by women. In contrast, when a GTC Village Phone is placed in a woman's home, there seems to be a good match between the technology and the times and places that are open and socially acceptable to women in rural Bangladesh. A portable phone can go where the Village Phone operator goes, or she can deliver it directly into the hands of another woman in the village. The Village Phone business is still operational while other business activities are underway, while children are being fed, and while farms are being tended. The ease of use of the phone means that adolescent children can take over operation of the business whenever necessary.

Female Village Phone clients are more likely to feel comfortable doing business with another woman, particularly if they do not have to travel to a public place to gain access to the phone. Other local Grameen Bank members typically receive a favourable discount on Village Phone use, a custom that is encouraged because it would be poor business to provide too many Village Phones in one area and the Village Phone business provides only one Grameen Bank member with both a lucrative business opportunity and higher status within the village.

The current GB criteria for the selection of VP operators explicitly includes having a store business as one possible advantage. Our findings suggest that this criteria is not consistent with the goal of women's empowerment as such stores tend to be operated by men (husbands or other male relatives), and thus phone use by women is reduced. Our survey data clearly confirms that women generally prefer to use phones operated by women.

Empowerment and phone location

There is growing evidence of the positive role of VPs in terms of women's empowerment (Bayes et.al., 1999). We are conscious of the fact that this potential stands to be eroded when the control over the phone is not in the woman's hands. Relative to other kinds of loans, this fact can be more easily monitored by GTC than other types of GB loans. In future, this may also provide additional criteria for VP operator selection: for example, not having a male family member involved in trade/market vending in the vicinity of the woman's home. To restate a point made above, we believe that if Grameen Telecom is to fulfill its ambition of universal access, then its staff, and the Grameen Bank managers with whom it facilitates the Village Phone programme, need to review the conditions necessary for universal access among both men and women. The context of universal access across gender may have to be continually revisited at both management and field levels.

Female market for phone services

Woman-operated Village Phones will likely remain a viable business even when competition from fixed wireless phones arrives. The VP may remain a niche market for a long time for two reasons: 1) other rural telephone operators (BRTA and Sheba Telecom) are more likely to seek the higher-density towns or larger villages, with lesser investments in remote, distant villages, and; 2) VPs are set to capture village women's phone needs more than the competition. Should Grameen Telecom consider the adoption of wireless local loop (WLL) phone card pay phones, then current Village Phone operators are well placed to act as franchisees and distributors of phone cards on behalf of Grameen Telecom. As well, if the services of Grameen Telecom expand to include email messaging, fax and even web access, then current Village Phone operators would be well-suited to assume management of such expanded telecommunication services.

Establishing a women's phone culture

If in future BRTA or Sheba Phones were to install a great deal more Public Call Offices (PCOs) or phone card pay phones in high traffic areas in villages and if this would out-compete the women VP operators, we feel that the VP experience has already proven effective in several ways. The VPs have created a "phone culture" among women by enabling them to have access to a communication tool that they might otherwise be culturally excluded form using. The Village Phone operators and female users have shown rural societies that women can easily gain the skills and capacity to run a VP and that women have just as many reasons to use telephones as do men. The Village Phone initiative has provided women with a recognized right/role as phone clients and phone business operators. Our interviews with some male phone operators give us reason to believe that, without VPs, husbands and male family members would not have been as willing or able to allow women such an opportunity. Our survey data supports this conclusion.

2.6 Satisfaction levels of users

Among the improvements suggested, access to a telephone directory ranked highest among phone users. Coming in tied for third place are better functioning phones, less expensive calling charges and more privacy.

The second-ranked suggestion for improvement was better access to telephone cards. As explained earlier, we believe that this is related to phone users' experiences with pre-paid card phones in towns and urban areas. Phone card phones are generally less expensive to use than those operated by people. This finding should be of significance to Grameen Telecom: if competing rural telephone companies begin to deploy significant numbers of less expensive phone card phones, and if they can provide a good distribution of phone cards, then Grameen Telecom's revenue and the revenue of Village Phone operators could be seriously reduced. Alternatively, Grameen Telecom might want to consider providing phone card phones as franchised units to its existing Village Phone operators, who could then provide an efficient means of distributing phone cards and continue to generate good revenue. This model has proven effective in some parts of Latin America and enables the operating company to provide well-managed and high-quality rural service.

Our findings differ from the suggestions of phone users in the Bayes (1999) survey. The top two priorities noted in our survey were access to telephone directories and better access to phone cards whereas Professor Bayes found that the top two priorities were lower rates and improved technical service quality. The differences might be accounted for by the more Dhaka-focused sample in the Bayes study (made necessary by the limited number of Village Phones in operation at that time), by improvements in service and value of service by Grameen Telecom over time, and by the emergence of a user "phone culture" focused more on informed user needs.

Female Village Phone users being interviewed by field researcher

Despite their desire for changes, phone users were generally not willing to spend more on telephone calls if their desired improvements were to materialize. Over 58% said that they would not be willing to spend more each month on phone calls, although 14% of phone users indicated that they would be willing to spend over 100 Taka ($2 USD) per month more. This demonstrates that there could perhaps be better profit margins if a rural operator is able to meet demands for improved service. And our data indicates that those higher expenditures for better service are more likely to come from younger phone users aged 20 to 30, an age group that would more likely be receptive to a wider range of phone services, including card phones. Finally, those who are self-employed also show a tendency to be willing to spend more on improved services. Other dependent variables do not demonstrate any significant differences.

When asked how much they would be willing to pay to have a phone installed in their homes, almost 30% of phone users were not willing to have a phone installed. However, 35% were willing to pay between 10,000 to 20,000 Taka ($205 to $410 USD) and 13% were willing to pay between 20,000 to 30,000 ($410 to $613 USD). This is a significant willingness to pay when we consider that the mean amount spent on building a house is 35,000 Taka, or about $715 USD and the mean household income of those surveyed is about 5000 Taka per month or about $102 USD. Again, those who are self-employed show a tendency to be willing to spend money to have improved access to telephone services, but in this case, they are joined by respondents involved primarily in household activities. There is a clear positive correlation between average monthly income and willingness to pay for the installation of a telephone.

When we examine respondents' answers to questions about their willingness to pay, dependent upon three categories of calls, those involving financial matters with family members overseas, those involving financial matters with family in Bangladesh and those involving social discussions, we see that a clear differentiation between willingness to pay for social calls and willingness to pay for calls involving the flow of money and remittances among family members. Thus, any services that can improve communication among family members in rural Bangladesh with their relatives in Dhaka or overseas, such as "Call-Me" cards or improved marketing programs, are likely to achieve higher revenues while also meeting the financial needs of villagers.

When we examine the results for our question regarding phone users' willingness to continue to try to make a connection for an important call, we see an indication of the current poor level of service within the Bangladeshi phone system. Approximately 50% of phone users are willing to keep trying for 26 minutes or more to make an important call. If connection rates and service levels are improved, the connected calls alone would provide a significant revenue boost to all operators.

FOOTNOTES

7. The source of this data is from the report by Bayes et.al. (1999), together with data from our survey and interviews
8. Our telephone user survey of Grameen Bank members documents the extent to which there is a relationship between women-operated VPs and women using the VPs, versus those VPs where a husband or son has installed the telephone in a village street corner or marketplace.

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