Uganda’s Vice President, Professor Gilbert Bukenya, today officially launched "MTN villagePhone" a joint venture between Grameen Foundation USA and MTN Uganda, the country’s leading telecommunications company. The Vice President launched the rural telecommunications initiative in a ceremony in Kayunga District by making a symbolic inaugural call using the Village Phone business owned by Sophia Nalujja, just one of 115 Village Phone Operators (VPOs) currently operating in 18 districts across Uganda.

MTN villagePhone extends telecommunications access to rural villages across Uganda, in partnership with micro-finance institutions, by creating opportunities for individuals living in impoverished rural areas to become "Village Phone Operators." Village Phone Operators-counterparts of Bangladesh’s "Phone Ladies"—take a micro-loan (as little as USD230, repaid over a period of up two 12 months) to purchase a mobile phone kit.

By deploying 5,000 village phones over the next five years, MTN villagePhone has the potential to provide 10 million rural Ugandans access-for the first time- to affordable telecommunications services.

"MTN villagePhone is the first successful replication outside of Bangladesh of Grameen Telecom’s pioneering Village Phone program, which currently has over 40,000 village phone operators," Grameen Foundation USA President Alex Counts said. "It also represents a unique cross-sector partnership between Grameen Foundation USA, MTN Uganda and five micro-finance organizations operating in Uganda—and potentially more as services are expanded throughout the country."

The micro-finance partners are a strong distribution channel to rural markets, allowing access to populations that were not readily accessible before to the telecommunications industry.

Village Phone businesses can be established in areas where electricity is unavailable and in areas where the MTN network can only be accessed with a booster antenna. In addition to the antenna, the equipment package also includes a solar power panel or car battery, a wireless handset, a VPO user manual, and a fixed line dedicated simcard that can be loaded with the prepaid airtime and requires no service fees.

MTN villagePhone provides special airtime rates for the VPOs to enable them to provide affordable telecommunications services to people in their village. People in rural communities are now able to make a call without traveling many kilometers to the nearest town, by simply going to their VPO. It is estimated that a phone call that costs ten cents can save the caller one dollar in wages or business that would be otherwise lost due to travel.

Grameen Foundation USA is a non-profit organization (NGO) based in Washington, DC, that empowers the world’s poorest people to lift themselves out of poverty with dignity through access to financial services and to information. The Village Phone program is managed by the Grameen Technology Center, an initiative of Grameen Foundation USA, and is supported by the World Bank infoDev, IFC, AED, and others including individual philanthropists Replications of this model in other developing countries are being considered.

Started only five years ago, MTN Uganda is the Uganda government’s liberalization success story having led the telecommunications sector in the provision of innovative and affordable GSM and fixed line services that have seen the company attain 70 per cent market share of the entire subscriber market.