Mobile Phones for Uganda's Poor

MTN Uganda says that it has embarked on a substantial project to improve access to communications services and thus reduce poverty and improve socio-economic conditions in rural Uganda. Based on the successful Grameen Village Phone Programme in Bangladesh, MTN Uganda officially launched "MTN villagePhone" this week - a joint venture between MTN Uganda and Grameen Foundation USA.

MTN villagePhone extends telecommunications access to rural villages across Uganda in partnership with microfinance institutions by creating opportunities for individuals living in impoverished rural areas to become "village phone operators". Village phone operators take a "micro-loan" - as little as US$230 to be repaid over a period of up to 12 months - for the MTN villagePhone equipment and use the cell phones to operate a business providing much needed communications services to their communities.

Yvonne Muthien, group executive: corporate affairs, MTN Group says: "The MTN villagePhone project is a sustainable initiative that aims to alleviate poverty and empower rural Ugandans through the provision of communications services. The project will be instrumental in increasing local economic activity and business opportunities through the creation of entrepreneurs and small enterprises."

Village phone operators can set up businesses in areas where electricity is unavailable and in areas where the MTN network can only be accessed with a booster antenna. In addition to the antenna, the equipment package also includes a car battery or solar power panel, a wireless handset, a user manual, and a fixed line dedicated sim card that can be loaded with the prepaid airtime and requires no service fees.

Grameen Foundation USA President, Alex Counts, says: "MTN villagePhone is the first successful replication outside of Bangladesh of Grameen Telecom's pioneering Village Phone programme, which currently has over 40,000 village phone operators. It also represents a unique cross-sector partnership among five micro-finance organizations operating in Uganda - and potentially more as services are expanded throughout the country."

Uganda has a population of just under 24 million and is about 86% rural with only 14% of the population living in urban centers. The waiting list for access to a fixed line telephone is 3.6 years. Rural access to telecommunications service is limited - the teledensity for Uganda is estimated to be between 2-3%. These telephones are concentrated primarily in urban areas making rural access to telecommunications services difficult and costly.

"Uganda is a poverty-stricken nation where the average villager travels up to two kilometers to make a call and is charged a considerable rate per minute. Through this project MTN aims to provide its communications services where no such viable, affordable or accessible alternatives exist. The goal is to establish 5000 new MTN villagePhone micro-enterprises, bringing the power of communication to millions of villagers in rural Uganda," says Muthien.

There are currently over 115 MTN villagePhone operators operating through 18 districts in rural Uganda. As a result, MTN Uganda has further extended its reach in the country, where an estimated 50% of the population is now covered by MTN.

MTN villagePhone is currently working with five microfinance organizations: Foundation for International Community Assistance (FINCA), Foundation for Credit and Community Assistance (FOCCAS), Support Organization for Micro-Enterprise Development (SOMED), Uganda Microfinance Union (UMU), and Ugandan Women's Finance Trust (UWFT). MTN villagePhone will continue to partner with other microfinance organizations to further expand its services throughout Uganda."

Posted to the site on 24th November 2003