Grameen Phone

Case Analysis: Iqbal Quadir and Grameenphone

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The case on Grameenphone speaks about the challenging journey of Iqbal Quadir, an investment banker turned entrepreneur, on fulfilling his vision of bringing universal telephony in his home country of Bangladesh. Start afresh, could there have been a better alternative approach than the one he took as mentioned in the case? This analysis explores the possibilities as well as the feasibility of the alternates.

Bangladesh in 90’s – A macro-economic perspective

Bangladesh was part of what was formerly known as East Pakistan and became independent in 1971. After spending 15 years under military rule and restoring democracy in 1991, Bangladesh had a period of relative calm and slow economic progress since then. However, the establishment of democracy had been opening up the economy by introducing policy level changes, promoting private entrepreneurship and initiating privatization of state-owned enterprises. This was a very positive approach especially from one of the world’s poorest country which had extremely low income per capita with majority of the population fragmented in the poorly connected rural areas.

Apart from its under-developed infrastructure in terms of transportation, communication, energy etc., it also continued to struggle with natural calamities owing to its low-lying geography and vulnerability to floods and cyclones.

The Telecom Industry

In the 1990s, a major breakthrough occurred in Bangladesh when the government approved to open new licenses for mobile phone operators. By privatizing the telecommunication industry, Bangladesh became a pioneer among its neighbouring countries as well as among some other less developed countries. Despite the same, the industry attractiveness was low due to the higher cost of capital for the risk of investment involved and also a poor infra on electricity & network lines....