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He's Got Connections
Iqbal Quadir brings mobile-phone connectivity to fellow Bangladeshis turning more than 40,000 of them into entrepreneurs in the process.
For Iqbal Quadir, conventional success wasn't enough. Sure, he'd received an MBA at Wharton in 1987 and landed a job as an investment banker on Wall Street. Compared with millions of impoverished people in his native country of Bangladesh, he was a rich man. In 1992, he earned $250,000.
But he wanted to use his skills to give something back to his homeland. His time at Wharton had taught him that business could be a tool for improving people's lives. "I learned that business allocates resources efficiently and disperses power," he says. "Historically, people got empowered through technologies like the metal farm plough, eyeglasses or clocks. An economically empowered population demanded checks and balances and improved governance. In effect, they promoted democracies and fairer economies."
Quadir therefore decided to quit his job and try to bring modern telecommunications — "connectivity" is the term he prefers — to millions of poor people in his homeland. (He returned to Wharton in September to participate in the first UN Global Compact Academic conference.)
The idea came to him during an afternoon of on-the-job frustration. His office's computer network had failed, and he was stymied in his efforts to work. As he sat there wondering when the network would come back on, his mind wandered back to a wasted day in 1971 when he was 13 years old. Back then, his family was living in a rural village to escape a war that was ravaging the big cities. His mother sent him to a nearby village to fetch medicine. He walked eight miles only to find that the pharmacist was out. He spent the afternoon walking home.
As he recalled the frustration of that distant day, he realized that, in his words, "connectivity is productivity." And that applied as much to folks back in Bangladesh as it did to a banker in New York. Just as he needed to be connected to do his job, so, too, did they to live happy, productive lives.
"Adam Smith wanted everyone to specialize," he says. "But they can't do that if they're not connected to each other. That's why cities grew up next to rivers and oceans."
At first, he wasn't sure how, precisely, he'd help his fellow countrymen get connected. Like many entrepreneurs, he knew he wanted to start his own business before he understood exactly what it would be. But he headed home anyway, intent on researching the communications needs and opportunities. Once there, he learned that the Bangladeshi government was considering handing out licenses for mobile-phone companies. That was the chance he was looking for — he'd take cell phones to poor villages in Bangladesh.
Of course, doing that would require tens of millions of dollars, which Quadir didn't have. He needed a backer — a company that could not only chip in money but, perhaps more important, vouch for his credibility with other potential investors.
In 1994, he found
such a sponsor in Grameen Bank, a Bangladesh-based pioneer in the field
of micro-credit lending. Grameen, famous among
development economists, gives tiny loans — typically only a
few hundred dollars — to poor people
in Bangladesh so they can start businesses. It might, for example,
help a villager buy a cow, so that she can sell milk to her neighbors.
[Learn more about Muhammad
Yunus and Grameen Bank in the Wharton School Publishing book, Lasting
Leadership: What You Can Learn from the Top 25 Business People
of our Times.]
With Grameen, he started GrameenPhone, a for-profit mobile-phone company. With Grameen's imprimatur on the project, he was able to persuade Telenor, a Norwegian phone company, and Japan's Marubeni Corp. to invest. Their money enabled GrameenPhone to build out its infrastructure of cell towers and fiber-optic cable.
"I tried American companies, but their ethic was, ‘Our market at home is big enough,'" he says. "But if you go into a smaller country like Norway, they're thinking about other markets. Norway has 4.5 million people, and GrameenPhone will soon have more subscribers than the mother company's country has people."
The business built atop Grameen's network was ingeniously simple. Poor villagers would receive micro loans with which they could buy mobile phones. They would then sell minutes on their phones to fellow villagers, pocketing the difference between what they charged and what they owed to GrameenPhone.
The beauty of the GrameenPhone, to Quadir's way of thinking, is not only that it enables poor Bangladeshis to start tiny businesses, but that it also provides connectivity to all of their neighbors who rent time on the phones. In theory, that means that today's 13-year-old won't have to walk all day on a futile errand. He can call ahead.
Today, GrameenPhone has 2 million subscribers, double its base of one year ago, giving it 60 percent of the Bangladeshi market. Quadir predicts that that number will rise to eight million within three years. It already does business in 40,000 rural villages.
In late 1999, Quadir returned to the United States. "I put GrameenPhone together, but I wasn't interested in managing it," he explains. He remains involved in shareholder matters and occasionally attends board meetings in Bangladesh. From 2001 until earlier this year, he taught at Harvard University's Kennedy School of Government. He's now working on a book about the experience of starting the company.
He hasn't giving up on his dream of taking connectivity to the world. He's working with several colleagues from Norway to bring mobile phones to a group of poor villages in Uganda. "In Africa, there's about 23 million fixed phones," he says. "That's expected to remain constant. But there are about 50 million mobile phones, and there are going to about 100 million by 2008. In Africa, where you hear about a lot of problems — AIDS, civil wars — private cell-phone companies are flourishing."
Today nearly 100,000 Bangladeshis, including 55,000 village entrepreneurs, are make a living retailing GrameenPhone's telephone services. What's more, the company is netting after-tax profits of $100 million annually.
With this success, Quadir unequivocally disagrees with the conventional wisdom that poor countries need aid and charity. Instead, he says, "What they need are businesses. Commerce is development."
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