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ESCOTEL'S GRAMEEN PHONE SEWA INITIATIVE
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  70%
of India's one billion strong population lives in its 607,000
villages—often poor, rural, and without access to communications
tools. Almost by accident, cellular service provider Escotel
has found an opportunity to connect some of these villages to
each other and to the rest of the world.
It began when Escotel discovered that its network covered thousands
of rural villages, far beyond its intended range of 158 towns
and 77 major highway towns. Out of the 113 million people falling
within the company's service area, 78 million—nearly 70%—are
rural, spread among 50,000 villages. Escotel's signal covers
over 3,000 of these villages in West Uttar Pradesh, Haryana,
and Kerala.
The Need. With PSTN phones either
nonexistent or chronically out of order, a large number of these
villages have no means of communication. People must travel
long distances to communicate in person or to make phone calls.
Letters and telegrams, each taking days to transmit, are the
only means of receiving messages.
Providing real time connection with the world outside can increase
prosperity and accelerate development of the villages. With
the accurate, up-to-date information a simple phone call can
provide, farmers can obtain the best prices for their crops.
Artisans and local merchants can avoid wasting time and effort
traveling to nearby towns, just to discover that the market
is closed or that the official they've gone to see is out of
town. Local governments can better collect information about
the villages and citizens within their jurisdictions.
 Inspiration.
Escotel set out to fill the need for real time communications
in rural villages using its GSM cellular services, inspired
by GrameenPhone's Village Phone project in Bangladesh. Unlike
the Bangladeshi project, however, Grameen Phone Sewa lacked
the Grameen Bank infrastructure for financing, identification
of phone entrepreneurs, and brand image. It had to create its
own model.
Closing the Gap. Escotel's Grameen
Phone Sewa project targets the more than 3,000 villages where
Escotel coverage is available. To help create local buy-in,
Escotel has drawn on the networks of one of its shareholders—Escorts,
India's biggest agricultural equipment provider. This association
with a traditional brand has helped foster awareness within
the villages and generate support among village headmen.
Escotel makes one GSM cellular phone available within each village,
under the management of an operator recommended by the local
village headman. Preference is given to war widows, the handicapped,
ex-servicemen, and unemployed but educated youth. Both the connection
and airtime are provided at highly subsidized rates: connections
are free, and airtime runs around 3 rupees per minute, a discount
of 50%.
 Local
call rates apply even to long distance calls within Escotel's
service area—which makes the Grameen Phone Sewa phones
cheaper to use than Department of Telecommunications landlines,
which a villager might have to travel up to 5km to use. Villagers
pay for the airtime they use making and receiving calls, in
addition to a service charge payable to the phone operator.
This charge runs between 2 and 4 rupees, and in some cases even
takes the form of bartered goods. Operators typically pull in
between 30 and 50 rupees per day, and recoup the initial investment
in the phones within 5 to 6 months.
Creating Digital Dividends. Approximately
400 Grameen Phones have been installed so far, providing concrete
benefits to rural villagers:
 No need to travel long distances to make phone calls, putting
market information, crop prices, government services, and the
like at villagers' fingertips
Reduced reliance on the fixed-line network, with its limited
number of access points and frequent breakdowns—consistency
is critical in case of an emergency
Phones can be taken to those unable to leave home—the
sick or very old—who would be unable to reach a normal,
fixed-line public call office (PCO)
Significant earning opportunity for phone operator
Easy and instant connectivity with the outside world, providing
real time information, empowers villagers to align themselves
with the rest of the economy and improve their standards of
living.
As Financial Times reports, there have been concrete benefits
for Escotel as well: the scheme has helped drive the company's
growth higher than the industry average.
 Moving
Forward. Escotel covers 3,000 villages today, and by
end 2002 expects to expand to 5,000 villages—with an average
of 3,000 people each. Escotel will also be launching its services
in East Uttar Pradesh, Rajasthan, Himachal and Punjab early
next year.
This will increase the total population in its service area
to 312 million; the rural component will grow to 235 million,
spread over 200,000 villages. At minimum, half of these villages
will receive Escotel signals over the coming 3-5 years.
Partnership Opportunities. While Escotel
subsidizes the cost of the connection and airtime charges, the
company is looking for partners or sponsors who could further
subsidize the cost of the handsets. Providing the necessary
equipment free of charge would enable even more villages to
take advantage of the Grameen Phone Sewa program.
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