Unplanned Obsolescence

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Hot Phones At Dhaka's Eastern Market, one floor is packed with vendors selling handsets, many of which have been smuggled into the country.

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• The Phone Ladies' Conundrum
  

In aspiration and potential, however, Bangladesh is the Hong Kong of South Asia, with a resilient workforce, a growing middle class, and encouraging recent progress. The growth of real gross domestic product has increased to 6.7% last year from an annual average of 4.8% in the 1990s and 3.2% in the 1980s. Although the country's second-largest export continues to be its people--nearly 290,000 Bangladeshis work abroad, each sending home enough money to support 37 others--shipments of its principal manufactured exports, ready-made garments, have been rising 11% annually, despite recent loss of trade protection.

Grameen's Village Phone Program has mirrored that growth, expanding ten-thousand-fold in 10 years to include about 280,000 operators, mostly women known as "phone ladies." It has won fame because of its reputed earning power. "The typical village phone lady has an average income three times the national average," according to a 2005 United Nations manual explaining how to duplicate the program elsewhere. In the most recent book about the program, You Can Hear Me Now, published in February of this year, author Nicholas P. Sullivan writes, "It is widely accepted that village phone ladies can make anywhere from $750 to $1,200 a year."

The current reality, however, is something different. According to Grameen Telecom, the GrameenPhone affiliate that manages the program, profits per operator have been declining for years and in 2006 averaged less than $70. "The program is not dead," says its manager, Mazharul Hannan, chief of technical services at Grameen Telecom, "but it is no longer a way out of poverty."

The reason is simple: Technology and GrameenPhone itself have made the village phone obsolete. Access to cell phones has expanded rapidly across Bangladesh, as in other developing nations. GrameenPhone, largest of the nation's six cellular providers, has more than 13 million subscribers, with yearly revenues of nearly $700 million. In all, perhaps one in seven Bangladeshis owns a phone, and ownership is expected to reach as high as one in three in a year or so.

Dhaka is hot, humid, crowded, frentic, and noisy. And across the city, cell phones are everywhere.

Ten years ago, Begum provided the sole telephone in Patira and the surrounding area, the only connection for nearly 10,000 people. Today, she must vie with 284 other Village Phone operators nearby, plus all the cell phones her neighbors have bought for themselves as prices have come down. As a result, Begum's phone rentals these days bring in monthly profits of only $22. "If I didn't have so many other businesses," she told me, "I couldn't afford to be in this one." Says her loan officer, Salim Khan, general manager of a Grameen Bank branch: "She is fortunate that she began when she did. Today, poor women who go into the phone business stay poor."

To understand the transformative power that cell phones have had in Bangladesh, one need only visit Dhaka, the capital. Dhaka is hot, humid, and flat, its skyline filled with cement buildings that seemingly aspire to East German monotony and dinginess. The city's air chokes with dust and the exhaust from ramshackle vehicles of every sort, patched together and resurfaced with fiberglass bonding compound, then gaily striped in turquoise, fuchsia, tangerine, chartreuse. Second globally only to Mumbai in the number of slum dwellers, the city is frenetic and noisy, with a constant beeping, honking, ringing, and coughing of buses, cars, rickshaws, and three-wheel taxis against the loud drone, in neighborhoods that can afford them, of electric generators. (Power fails several times a day.)

Yet across the city, cell phones are everywhere. In the Eastern Plaza, a multistory market building, several dozen cramped stalls offer phones exclusively. Because many handsets are smuggled into the country, suggested retail prices mean little, and bargaining is brisk.

Indeed, wireless has become broadly affordable--even in places that, until now, had no telephones of any sort. Advances in digital electronics have helped to lower the price of a cellular handset in poor nations from more than $400 to about $30. In practical terms, that's a reduction from more than the national average annual wage in those countries to less than the wages for a single month. As a result, many who once needed to use someone else's phone now can afford one of their own.