Big-business, technology, and a little Bangladeshi village all came together to form a multi-million dollar company that improves the lives of the poor. Learn about this Nobel Peace Prize-winning project in YOU CAN HEAR ME NOW video introduction (youtube).

This is the first paper from the DIRSI Mobile Opportunities research project. The project is investigating strategies employed by the poor in Latin America and the Caribbean to access and use mobile telephony services, and working to identify the major market and regulatory barriers to increased penetration and usage as well as business opportunities for the "bottom of the pyramid" users. Overall, the project also is working towards a clearer understanding of how mobile telephony access contributes to social and economic development.

To do with the price of fish

May 10th 2007 From The Economist print edition

How do mobile phones promote economic growth? A new paper provides a vivid example.

"Grameen Bank has an impact on the poor, Grameen Phone on the entire economy", says Muhammad Yunus (Nobel Prize).

The project "Community Microtelcos: Telecommunications and Microfinances for The Poor and The Poorest" will provide rural families in the Andes of Peru with access to telecommunications and microfinancial services in their communities for the first time.

Financial Assumptions of the System

Companies like Telefonica, the dominant provider here, or Telmex dominate latinamerican markets. The companies make a tremendous profit on their pre-paid airtime services, but at the same time give a critical service to many of latinamerican’s lowest-income consumers.

Our inspiration is the notable story of Grameen Phone, a billion-dollar phone company in Bangladesh built to serve the communication needs of that country’s millions of low-income residents, and its synergy with Grameen Bank, the world’s first microfinance institution founded by Nobel Prize-winner Muhammad Yunus.

Open source projects, co-developed by thousands of programmers, and shared through creative licensing which demands covenants of behavior rather than financial consideration from the licit community of users, have transformed the information and communications technology (ICT) sector. Examples of such projects include the famous Linux operating system, the Apache web server, databases such as MySQL, the Firefox web browser, and the Meraki wireless router.

The exponential growth of mobile technology opens new possibilities for microfinances. Billions of peoples don't have access to basic financial services but increasingly have access to cell phones and other mobile devices. It represents an untapped market and potentially huge client base for financial institutions.

The microtransactions poor people need are much more expensive than large retail transactions that financial institutions typicaly manage. But new technologies may make it possible to reduce substantially the cost of serving poor customers.

Telecommunications networks and services are not effectively reaching the poor, particularly those living in rural areas. Public subsidies for traditional operators to cover the difference between tariffs and cost-recovery levels have proved limited in addressing this continuing gap.

Community Microtelcos are small-scale telecom operators that combine local entrepreneurship, community empowerment, innovative business models, and low-cost technologies to offer ICT services in areas of little interest to traditional operators.