ON an empirical plane, one of the important areas of research that has long been left neglected is telecommunication (telecom for short). There are plenty of research works narrating the nexus between infrastructure (excluding telecom services), rural development and poverty reduction but. sordidly, very little seems to be on board in line of linkages between telecom, rural development and poverty reduction. The low priority given to telecom, allegedly, is due to the general notion that telecom is consumer rather than a production goods. The Centre for Development Research. Bonn aimed to plug some of the research gaps by evaluating the role of telecorn in the context of rural development in general and poverty reduction in particular. And to that effect, the study carried out by myself. Joachim von Braun and Rasheda Akhter drew upon the experiences of Bangladesh.

Bangladesh has been selected as a case study due to the . "uniqueness” it displayed in the realm of telecom infrastructure. It may be noted here that the Grameen Bank (GB) of Bangladesh leased out cellular mobile phones to its members under the umbrella of its peer group formation and micro credit programmes. GB named it as Village Pay Phones (VPPs). In a rare (and to some extent, risky) policy move. GB vested the rural poor with the control of the modern information technology like cellular mobile phones. Obviously, high expectations hover around the potential positive outcomes that the emerging pattern of ownership is likely to deliver where the villagers, especially the poor, would have a better (and possibly comfortable) access to this vital input of information.

Impacts of VPPs are assessed from two angles: sellers of services (owners) and buyers of services (villagers). Data have been generalea from a sample of 50 phone owners spreading over 50 villages surrounding Dhaka metropolitan city. The .sample size for sellers oi phone services constituted about 60 per cent of the total number of the sellers available at the time of the survey. On the other hand, the sample size for the buyers comprised 406 and constituted about 27 per cent of the total buyers of phone services in the sample villages. Both buyers and sellers were randomly selected from the available lists. Structured questionnaires were administered at both household and village level. Other instruments of investigation, as have been deployed to glean the impacts. included focus group discussions. interactions with local level elite, businessmen and leaders, social workers, government agencies etc.

Key Findings

Users of Phones by Economic Status: The study observes that 15 per cent of the users of phone services are poor while about 85 per cent are nonpoor. Again, among the poor group. 5 per cent of the users are found to be extreme poor while about 10 per cent are moderate poor. The poor users account for 25 per cent of the total phone calls made through VPPs while the non-poor group claims 75 per cent.

Purposes of Calls: As far as

purposes of phone calls are concerned, economic considerations sweep the share by accounting for 46 per cent of the total calls. Family and personal purposes account for 35 per cent of the calls and 10 per cent of the calls are directed for seeking health related solutions. At disaggregated level, the poor seem to make about one-third of their calls for seeking market information. This compares with 18 per cent made by the non-poor group for the same purpose. The poor also make more phone calls for health related purposes than the non-poor group. By and large, the major chunk of the poor men's calls goes to seeking market information and looking for emergency health services.

Impacts of Phone Calls: The findings of the study tend to lead to two basic conclusions: (a) pursuance of pragmatic policies can turn telephones into production goods and (b) the services originating from telephones in villages are likely to deliver more benefits to the poor than to the rich. Thus observed. the results of the study go to contest the conventional wisdom regarding the role of telecom services in rural areas.

The study observes that the VPPs impinge salutary impacts on. inter alia, the following fields viz., costs of communication, farm gate prices, mortality rates of livestock/poultry

population, contacts on health related matters, family and persbnal communication (home and abroad) etc. Among these, however, costs of communication (i.e. the benefits in terms of consumer's surplus) and commodity price effects deserve special mention. The ( study finds that for each of the ' phone calls made, the sample users reap home a consumer's surplus of about Tk. 55. At disaggregated level, the poor users tend to bag a surplus of about Tk 78 compared to about Tk 51 by the non-poor users. The moderate poor performs impressively with a surplus of about Tk 92 followed by the extreme poor at Tk 61. Intuitively speaking, the surplus reaped by the poor group as a whole was equivalent to almost 6 KGs of rice at the prevailing rural level prices. By and large, the availability of VPPs helps increase real income and savings for the users irrespective of their economic status. On the other hand. VPPs also help in terms of fetching fair prices for commodities, regular supply of inputs and in-

creased productivity. For example. villagers in target villages are reported to reap 6-7 per cent higher prices for paddy compared to that in control villages. These benefits, seemingly. spring from the communication of transparent market information.

Phone and Food Security: Findings from the study tend to show that members of the phone owning households can now "eat well" for more months of a year compared to the past, thus, pointing to an improvement in food situation levels (and hence a reduction in poverty level) of the sample households. Regression results indicate that income from selling phone services emerges as one of the significant variables to explain the variations in food situation levels. Indirectly. the improvement in food intake of the villagers should also go up following the rise in consumer's surplus, higher prices for farm products etc. that VPPs appear to generate in sample villages.

From the sales of phone ser-

vices, the owners tend to earn, on average. Tk. 277/week. The earning ranges from as high as Tk 683/week to as low as (-) Tk 35/week. The net profit constitutes one-fifth to one-fourth of the total income of the sample households. Regression results show that the increased profits from VPPs raise food intake levels of target households by raising their exchange entitlements in the market.

Non-Economic Impacts: However, the economic consideration aside, VPPs also seem to inject perceptible and positive impacts on empowerment and social status of the phone owning women and their households. Field level evidences tend to suggest that phone-owning women are more empowered than before and they are proud to see that some of their erstwhile "patrons" are now turned into "clients" due to the ownership of phones by them. The most dynamic impact on the social front that VPPs seem to have impinged is in the case of changing "social equilibrium" in sample villages where the richer section depends on the poorer section for the supply of a service called phones. Given the same level of economic return between a former traditional activity (e.g. iive-stock/poultry rearing) and the most modern cellular mobile phone, the sample households seem to be titled towards the latter on account of empower-

ment. social status and social equilibrium considerations. From villagers' point of view, the VPPs help face natural calamities far more quickly and effectively than before, establish quick contact with kith and kin (at home and abroad) etc.

The benefits outlined above are. supposedly, just the tip of the iceberg. There are more of such pecuniary and non-pccu-niary benefits which could not be captured by the present study. The reasons are as follows: first, at the time of the field survey during April-June 1998. the VPP project was at its infancy. For example, only about 52 per cent of the sample VPPs were found to have crossed more than one year of operation. It can be argued that the short period under consideration failed to expose the dynamic impacts of VPPs. Second, the evaluation is mainly based on out-going calls. Since the owners were not found to charge for the incoming calls, we decided to exclude that from the analysis. And third, externalities or spillovers of phone calls were not included in the total calculation of benefits. Obviously. once the lengths of services gel to grow with the passage of time and once due recognition are paid to externalities and incoming calls, the size of the benefits of VPPs would appear to be much bigger than what could be captured by the present study.

Policy Conclusions

The policy implications that appear to come out of the present study are as follows. In a country like Bangladesh, with one of the lowest telephone density in the world (0.26 per 100 people) and with the average waiting time for a telephone connection at 10 years, policy makers need to properly reckon the role of this vital information technology in rural development. The Grameen experience shows that people, especially the poor, in rural areas can immensely benefit from the services of telephone system. More importantly, the GB style of management of communication would go a long way to expand the access to this vital information input across the board, reduce inequality and thus make rural development relatively more broad based and pro-poor. To that end, the role of the government owned BTTB should be more supportive to the emergence of this kind of initiatives.

The policy makers need to revise the role of the public sector in raising the telephone density level to a respectable limit. Quite obviously, it is not possible on the part of the government alone to meet the challenge lying ahead in the next millennium as far as information revolution in the country-is. concerned. Participation of the private sector in the telecom sector could help a faster journey but to do that, the existing psychological problem of accepting competition should be withered. Tnere needs to be more investment on telecom. The role of BTTB — the paras-tatal — could be rationalized by turning the institution into a corporation so that resources could be generated from inside. And lastly, the initial cost of telephones could be curtailed through reduction of import duties. VAT etc. so that more demand can be generated.