24 September 2013

CDC has announced it is to provide US$25m to Grameenphone

Loan to Leading Bangladeshi Mobile Network Made as Part of Co-Financing Package

CDC Group plc, the UK’s development finance institution (DFI), announced today that it is providing US$25m of loan finance to Grameenphone Ltd (‘Grameenphone’), Bangladesh’s leading mobile phone operator. The loan has been made as part of a lending group with the IFC, other DFIs and Standard Chartered Bank. The total loan facility is US$345m.

Grameenphone offers mobile telephony, voice and data network services in Bangladesh and is the country’s largest operator with approximately 120,000 retailers. Its pre-paid service is popular with lower income customers and accounts for approximately 98% of Grameenphone’s subscriber base.

In Bangladesh, only 0.7% of the population is connected to a land line so mobile remains the only means of telecommunication for a large part of the population.  Internet penetration is also low by global standards at 6%, with mobile data representing 4.4% (Business Monitor Intelligence).  Mobile phones are expected to be the predominant method for accessing the internet in Bangladesh given the high cost of PCs and fixed line internet connections; tariffs rank amongst the lowest in the world.

The funding from CDC and others will help modernise the Grameenphone network and increase its capacity and coverage in rural areas. This will improve access to telecommunication services for both voice and data, and help businesses of all sizes offer more goods and services to more people, doing so more efficiently.

Expanding Grameenphone’s network will allow its ‘Village Phone’ programme to expand. Under this programme a single phone is provided to a Village Phone operator, who is then taught how to use the phone and charge other villagers for its services. Not only does the programme enable millions of Bangladeshis to access modern information and communication technology, but it also provides employment to approximately 650,000 Village Phone operators, typically poor women.

Commenting on the transaction, CDC Investment Director Jeremy Burke said:

“CDC’s loan to Grameenphone allows the company to expand its products and services throughout the country especially with the recent addition of a 3G license. In so doing Grameenphone supports direct and indirect employment opportunities throughout its value chain. The company already employs over 4,000 people directly and many more jobs are supported through its third-party vendor network. Upgrading the network will encourage more commercial activity, particularly in rural areas that have previously had limited access to mobile services, and help the private sector develop at all levels.”

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