GrameenPhone, the primary case study in You Can Hear Me Now, is preparing to sell $300 million worth of shares on the Dhaka and Chittagong stock exchanges in Bangladesh. The company, a subsidiary of Norway’s Telenor, is valued at $3.2 billion. Get more details from The Daily Star, Dhaka’s premier English-language daily.

The IPO, although very small by Western standards, is a significant step forward for Bangladesh’s capital markets, which have been strengthening over the part five years. “It will be a breakthrough for the country’s capital market history,” said Abu Ahmed, professor of the Department of Economics of Dhaka University. The IPO is planned for the end of September.

The fact that GrameenPhone, which is owned by Telenor, a publicly traded company in Norway, is offering shares in Bangladesh is significant because it gives Bangladeshis a chance to buy into one of the country’s strongest corporate performers. This has long been a bone of contention between Muhammad Yunus, the Nobel laureate and founder of Grameen Bank, which owns 38% of GrameenPhone, and Telenor, which owns 62%. At his Nobel acceptance in Oslo, Yunus made several “in your face” comments about Telenor. Yunus now asserts that the owners of Grameen Bank are entitled to buy 20% of the shares being offered and that they have the capital to do so.

This silly jousting aside, the IPO may well propel other telecoms to list in Bangladesh, including Egypt’s hyper-successful Orascom, which operates Banglalink.

CellBazaar, a kind of “Craig’s list for cell phones” that is available only on GrameenPhone in Bangladesh, won the Best Use of Mobile for Social and Economic Development Award at the GSM Association’s blowout meeting in Barcelona, Spain. Here’s the citation:

“Grameenphone CellBazaar is a user-generated virtual marketplace, accessible via mobile phone or PC to nearly 17 million people in Bangladesh. In developing countries, limited communications hinder commerce and uninformed farmers and traders have little bargaining power with exploitative middlemen. Using CellBazaar, buyers and sellers trade basic goods from their mobiles, bringing the benefits of information exchange and one-to-many trading to a previously unwired rural population. Users post or search an item, spending less than US$.02, either by SMS or WAP or WEB, depending on their preferences. While common telephony establishes one-to-one communication, CellBazaar links many-to-many using the same basic mobile infrastructures.”

Judges’ comments: “Great initiative – full marks for self-sustainability. This grass root level initiative is not only for operators to make money but for rural folks to sell and trade their goods and increased price transparency and help for the illiterate is also available. It has clear environmental benefits through reduced travel.”

CellBazaar was founded by Kamal Quadir, brother of Iqbal Quadir, one of the founders of GrameenPhone. The company was initially developed by Quadir when he was a student at MIT’s Sloan School of Management, and was a prize winner at MIT’s annual $100K Entrepreneurship Competition.

See the proud press release on Telenor’s web site.

GrameenPhone was presented with the GSM Association’s Global Mobile Award for “Best use of mobile for social and economic development” for its HealthLine telemedicine service. The award was presented to CEO Erik Aas during the GSM Association’s Annual Leadership Summit in Barcelona.

In acccepting the award, Erik Aas said:

GrameenPhone and the mobile industry represent a major part of the development of Bangladesh, and this initiative shows our commitment to the development of the country, the people and their well-being.”

The HealthLine service is an interactive teleconference between a GP caller and a licensed physician who will dispense information on lab tests and lab reports, drugs, and medical facilities.

A very interesting opinion piece in the Jan. 29 Wall Street Journal notes that both the Nobel Prize winner in economics (Edmund Phelps) and peace (Muhammad Yunus) highlighted the impact of entrepreneurship in their Nobel addresses. “Phelp’s Prize” by Amar Bhide, a professor at Columbia University, and Carl Schramm, president of the Kauffman Foundation, picks at the open wound between plain-old entrepreneuers and social entrepreneurs. I basically agree with them, but I also beg to differ as I think they compare apples and oranges. (I don’t link to the article because I don’t have a subscription to wsj.com.)

Of the 35 winners in economics, 28 never mentioned the word “entrepreneur.” Phelps mentioned it 17 times–more than the total over the previous 19 years! Yunus mentions it 6 times. Twenty-three mentions in two Nobel speeches has to be a record. But it is almost as if the laureates had a different dictionary in front of them when choosing their words.

Phelps talks about a transformative entrepreneurship that is central to capitalism, by sparking growth of small businesses that become large commercial operations; Yunus talks about microloans that don’t involve economies of scale or lead to significant new enterprises. The writers ask, ” Can turning more beggars into basket weavers make Bangladesh less of a, well, basket case?”

Well, no–but. It’s a false dichotomy–and the writers know it. They note Bangladesh’s export-oriented garment industry as being “larger and more productive than individual craftsman,” which is true, as a way of saying that it is better to provide venture capital to growing businesses than seed capital to individuals. They also note that government reforms, such as those that are now propelling Vietnam to new heights, are more important than microloans. But because the Bangladesh government is intractably backward and corrupt and anti-private business, does that mean that Yunus’s loans are a bad thing? I think the writers are reacting to the hoopla rather than the reality.

I am not an unabashed proponent of microloans, because I agree with the writers that while they may lift individual families out of poverty, they do not scale an economy. But I do not think microloans are a bad thing–how could they be? Some, such as Alexander Cockburn in The Nation (“The Myth of Microloans”), paint microloans as the devil incarnate, due to farmer suicides in India.

To me, the issue is clear: Capital that helps people raise a cow and escape poverty is as good as capital that helps start an Apple Computer. Yes, there’s a difference of scale. But there’s also a difference of context. The two sources of capital are not comparable–one’s in America, one’s in Bangladesh. But that doesn’t mean they’re not both productive.

And what about microloans that help build a GrameenPhone, the largest and most successful business in Bangladesh? It would not have been built without microloans that allowed distribution into rural villages, because Grameen Bank would not have backed the project. Does that not count? The authors cannot take a potshot at Yunus’s track record without examining his full portfolio.Â

Straw-man arguments are not compelling. It’s not either-or. Let’s deal with the facts on the ground–and celebrate entrepreneurs and capital that builds businesses of all kinds.

The number of mobile subscribers in Bangladesh grew by more than twelve million, or 120%, in 2006, to stand at 22 million at the end of the year, according to the Telecommunications Regulatory Commission. The regulator reported that the country’s five cellcos signed up 2.56 million new subscribers in December alone.

Doubling (or bettering that) the number of cell phone subscribers has become the standard throughout the developing world, so let’s project another doubling in 2007, which would bring the number of subscribers to 44 million. That’s nearly one cell phone for every three people. Before GrameenPhone started service, Bangladesh counted one phone for every 500 people. That’s night and day–a whole new country.

Market leader GrameenPhone ended the year with 10.76 million GSM customers after adding nearly 5.22 million in 2006, Aktel acquired 3.93 million new subscribers to take its total to six million, Banglalink’s user base grew by 2.61 million to 3.64 million, and the sole CDMA operator CityCell reached nearly one million customers from 440,000 at end-2005. State-run Teletalk acquired nearly 400,000 customers in 2006, whilst the sixth mobile licensee, Warid Telecom, is expected to launch commercial GSM services by April.

As the book rolls off the press and nears publication date (Feb. 2), an early proof has garnered early reviews.

Library Journal (no access without subscription):

“This book offers valuable insights about the use of cell phones and technology-based investments to generate wealth and demonstrates that entrepreneurship may be more fruitful than aid. This valuable work can be effectively integrated into public administration, global business, and human resource academic courses.”

Caroline Geck, Kean Univ. Lib., Union, NJ

Next Billion.net (by Rob Katz)

“…This a history of sorts, about how Iqbal Quadir came to launch GrameenPhone.  Sullivan doesn’t claim to offer new or different strategies to engage BOP [bottom of the pyramid] markets; he simply sets out to tell the tale of an expat Bengali and his innovative phone company.  You Can Hear Me Now is well-written and very engaging, as the author enjoyed good access to some of the stories’ major players.  A smart manager can learn from GrameenPhone without being led by the hand, and Sullivan’s storytelling and analysis open up the case in a way that we haven’t before seen.  The book’s out next month; in the mean time, check out his blog.”

World Bank: Private Sector Development blog (by Christine Bowers)

“…the first half of this book tells the GrameenPhone story, the second is a grab-bag of other technology initiatives, including many players in the m-banking world. If the Nobel Prize win peaked your interest in all things Grameen, buy a copy when it comes out next month. In general, I’m not too sure that a book is the best format for telling these stories – hard to give substantive coverage to a field that moves so quickly in time. Fortunately, Nick also has a blog.”

Thanks to all for their interest and attention.

The village-phone scheme pioneered by GrameenPhone in Bangladesh has been successfully implemented in Uganda and Rwanda by South Africa’s MTN, and in the Philippines by Globe Telecom. The common thread to these replications is consulting advice from the Technology Group at Grameen Foundation USA.

After several years working out the kinks and writing manuals to ease implemenation, Grameen Foundation has now released a Village Phone Direct kit, which it sells to microfinance institutions around the globe. The kit includes:

• Nokia mobile phone with earpiece
• External booster antenna for areas without strong mobile signal coverage
• Custom designed cables to connect the phone to the antenna and the recharging equipment such as a automobile battery or a solar panel

To complete the Village Phone Equipment Kit for the microfinance client, a SIM card and prepaid airtime, which can be purchased through regular outlets.

The simmering dispute between the two shareholders of GrameenPhone, Norway’s Telenor (62%) and Bangladesh’s Grameen Telecom (38%), is about more than business and money–it’s about national identity.

From the bangla_ict Yahoo Group today, a pointed comment from Sayeed Rahman about Telenor replacing the red-and-green GrameenPhone logo with Telenor’s corporate logo about a month ago:

GrameenPhone is extremely successful in doing business in Bangladesh, with the previous Red and Green logo. The previous logo was consistent with Bangladeshi Flag. So now the necessity of changing logo is yet to be justified. People of Bangladesh used to love the logo, the brand name. In Bangladesh, GrameenPhone is not just a mobile company, its more than that. It’s a story of connecting the rural people with the world, revolutionizing the communication in a country like Bangladesh, contributing to the society in various helpful ways.

Meanwhile, Norway’s Aftenposten reported the day before the Nobel award that the dispute over majority control was not a clear-cut case, and was causing “embarrassment” for Norway’s politicians (Telenor Conflict Puts a Damper on Peace Prize Ceremony):

One of the co-founders of GrameenPhone supported Telenor, telling newspaper Dagens Næringsliv over the weekend that the firm’s shareholder agreement was “vague.” He also said that Grameen Bank failed to buy additional shares in GrameenPhone when offered them and didn’t protest when Telenor bought them up and raised its initial stake of 51 percent to the 62 percent it holds today.

Several Norwegian politicians have called the conflict “embarrassing” and the secretary of the Norwegian Nobel Committee tried to keep it off of the agenda at a press conference on Saturday.

I realize this is inside baseball, but it is highly unusual to have a Nobel award ceremony devolve into mulitnational boardroom politics. And I must say that when researching my book, the issue of Telenor’s “intention” to reduce its shareholding to 35% was a very loose thread, which now appears will shortly be snipped off or tied up.

An excerpt from Muhammad Yunus’s Nobel Peace Prize acceptance speech, in which he publically prods majority owner Telenor to cede majority control to Grameen:

“Grameen Phone is a joint-venture company owned by Telenor of Norway and Grameen Telecom of Bangladesh. Telenor owns 62 per cent share of the company, Grameen Telecom owns 38 per cent. Our vision was to ultimately convert this company into a social business by giving majority ownership to the poor women of Grameen Bank. We are working towards that goal Someday Grameen Phone will become another example of a big enterprise owned by the poor.”

I wonder how this went over in Norway, where Telenor is the largest telecom company?

Based on my discussions with principals of GrameenPhone and Grameen Telecom, I don’t see this happening. But I do see a possibility that GrameenPhone, or some portion of it, will be listed on the Dhaka Stock Exchange, which would add 30% to the overall market cap and open up ownership opportunities for the people of Bangladesh, although not necessarily the Grameen borrowers. When? Who knows?

Muhammad Yunus, en route to Oslo to collect the Nobel Peace Prize for his pioneering work with microcredit in Bangladesh, has let it be known that he has a side agenda in Norway: challenging Norway’s Telenor to cede majority control of GrameenPhone.

GrameenPhone is a partnership between Telenor and Grameen Telecom, an affiliate of Grameen Bank, but Telenor holds 62% of what is the largest phone company in Bangladesh. Yunus insists that Telenor made a legally binding agreement in 1996 to give up majority control within six years. Yunus would like to turn GrameenPhone into a “social business” that reinvests profits in the company and its customers. Telenor, for its part, says that it has reinvested most of the more than $1 billion in profits and has yet to recoup its initial $87 million investment.

Yunus told Fortune in Dhaka ahead of his departure: “There’s tension between us and Telenor. There’s a philosophical difference. They’re oriented toward profit maximization. We’re oriented toward social objectives.”

Says Telenor CEO Fedrik Baksaas: “Different opinions are part of daily business life. We have never committed to reducing our share in the company.”

Two stories outline the core arguments on either side.

Nobel Peace Prize Winner Itching for a Fight (Fortune.com) presents Yunus’s case on behalf of Grameen–essentially that Telenor is depriving the poor of Bangladesh of their rightul spoils.

Telenor Says No Quarrel with Nobel Peace Laureate (Reuters) presents Telenor’s response–in essence, that it is willing to talk, but that GrameenPhone is a business that has done more to aid development than all development programs combined.

It’s going to be dark in Oslo on Sunday. It also could get a little hot.