IFC Support to a Mobile Phone Operator Adopting a Mass Market Strategy

An IFC supported mobile operator was the first to adapt a mass market, low-tariff strategy to connect poorer segments of the population, which made it the market leader in its country. The project aimed to expand phone access to districts not yet covered by the network and to provide women an opportunity to earn income. As an innovative feature, it established a Village Phone Program, which permitted rural women to use microcredit to buy specially designed cell phone kits and airtime at wholesale prices. Using the kits, these village phone operators (VPOs) then set up shop in the rural villages where they live, charging a small commission for people to make calls. The program provided access to phone services to millions of people in poor, rural areas who would otherwise not have had access.

The company has performed successfully, increasing the number of subscribers from 1.1 million in 2003 to 23 million in 2009, while prices for three-minute local calls fell from $0.08 to $0.01. Mobile subscription in the country—not attributable to the company alone—increased from 0.2 percent to 28 percent (2008). The pioneer Village Phone Program is estimated to have covered 55,000 villages and provided opportunities to 416,000 people.