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Last Updated: Thursday, 15 November 2007, 00:02 GMT
Mobile phones reach Uganda's villages
By Tatum Anderson
Kkonkoma village, Uganda

Nakakande Teopista has set up a mobile phone business

Not far from the equator, a ribbon of red dirt track leads off the main road.

The track is lined with coffee bushes draped with vines of vanilla and miles of banana, yam and cassava plants.

These are shambas, smallholdings owned by subsistence farmers in the heart of Uganda, East Africa. Many live below the poverty line and there is no electricity.

In a village called Kkonkoma, on the roof of a small house there is an aerial. It is a mobile phone antenna for a home-based village telephone service run by 24-year-old entrepreneur Joseph Ssesanga and his family.

Neighbours make telephone calls from his house rather than walk down the dirt track to the nearest public telephone some five kilometres away.

Business in a box

The business began when Mr Ssesanga's mother, Nakakande Teopista, who was supporting the family selling fish, learnt of small loans available to people wanting to start mobile phone businesses.

We can give farmers a fair indication of the crop prices so they can negotiate better
Junior Kwebiiha, an MTN employee

This is the Village Phone-model, which provides a business in a box. With loans, budding entrepreneurs can buy a mobile phone, a car battery to charge it, and a booster antenna that can pick up signals from base stations situated up to 25 kilometres away.

The handset is loaded with software that tracks revenues from every call.

The loan providers, so-called microfinance institutions, take on the task of ordering the equipment and transporting it to those who cannot afford to travel long distances.

Paying for school

By making money on every call she sells, Ms Teopista managed to repay the loan in four months. She then began to invest.

Phone on bicycle
The service enables villages to make phone calls

The family now operates in six villages, employs phone operators and even provides a phone-charging service for those with their own handsets.

Mr Ssesanga now manages the operators, and he also cycles around the village offering services to passing neighbours.

The fortunes of his family have been transformed, he says.

"We were farmers, but seasons are a major problem. We grow vegetables, but sometimes they can be damaged and you lose everything."

In contrast to such dire predicaments, the family can now afford school fees - secondary school is not free in Uganda - and has even opened a stationery shop in the nearest town.

Expanding project

The Village Phone model was pioneered by Grameen Bank in Bangladesh. By providing small-scale loans it allowed rural women to lift themselves out of poverty. There are now 295,000 village phone operators country-wide.

Mr Ssesanga says mobiles help farmers understand the market

An offshoot, called Grameen Foundation, exported the model to Uganda in 2003. It brokered relationships between mobile operator MTN Uganda and with Ugandan microfinance institutions.

The foundation has now moved to other MTN subsidiaries in Rwanda and Cameroon.

"Our goal is to replicate the success of the model," says David Keogh, director of village technology at Grameen Foundation, who is working on an Indonesian project.

So successful has the model become that other donor, including the World Bank, are establishing village phone operators from Senegal to Nigeria.

Market prices

In Uganda, the model has become a self-sustaining cornerstone of MTN's public telephone business, which includes payphones.

The number of operators has doubled to 13,000 this year. Operators make an average of $23 (11) per month. "That is a lot of money given our standards of living," says Richard Mwami, senior manager of MTN's Public Access business.

Village Phone operators make good business sense because public payphones are prohibitively expensive to maintain in remote areas, according to Junior Kwebiiha, an MTN employee who used to drive 800 kilometres per week to service and maintain payphones.

Phone operators not only look after the telephones, they also market the services to people they know.

But phone firms Grameen and MTN have begun a 15-month study throughout Uganda to find out whether operators could offer more services.

Mr Mwami says customers have already asked for directories of local services such as the police and local doctors and commodity prices.

""Gone are the days when agents from the cities go to the village and rip off the villagers," he says. "We can give farmers a fair indication of the crop prices so they can negotiate better."

The study might result in big changes to the Village Phone model worldwide says Mwami. If customers demand internet access, for instance, MTN might offer phones with colour screens and faster connections called GPRS to allow webpage downloads.

Mr Ssesanga doubts villagers in Kkonkoma will ask for access to the worldwide web.

"People need market prices for beans and tomatoes more," he says.

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