World Resources Institute (WRI), creator of the Next Billion “development through enterprise” blog, has just published a new book called The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid. The authors use household survey data to measure the empirical size and scope of bottom-of-pyramid market.

In a recent post, WRI senior VP Al Hammond notes the remarkable success of cellphone companies in cracking the “BOP code,” and notes several of the key themes of You Can Hear Me Now. He attributes the success, unmatched in any other sector, to extraordinary “push” using “sachet marketing,” i.e. selling text and voice combos in small prepaid increments. He also notes the way local cellphone companies have leveraged local entrepreneurs to create deep distribution into rural areas.

At the same time, he notes the “pull” of ICT–”the insatiable demand for ICT services even for very poor people.”  This, of course, is what has surprised so many development and industry experts. Hammond notes that in virtually every country, the share of spending on ICT rises exponentially as income rises. In fact, the percentage of income spent on ICT is higher than that spent on food, housing or transportation.

Remarkable–it reminds me of the Bangladeshi lady who referred to the cellphone as “magical as Aladdin’s lamp.”

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.

Just as GrameenPhone brought cellphones to rural villages by extending microloans through Grameen Bank, the company is bringing Internet connectivity to remote parts of the country. Entrepreneurs take out microloans to buy computers and printers, and connect to the Internet through GrameenPhone’s EDGE cellphone data network. While not as fast as a broadband connection, it does the trick.

A recent Washington Post story shows the impact such connectivity promises: one woman connected to a cardiac specialist in Dhaka; another called her uncle in London for pennies using computer-aided VOIP. Meanwhile, just as 250,000 phone ladies have started profitable businesses leasing time on cell phones, a new set of entrepreneurs is making money selling computer services. By year end GrameenPone expects 500 such centers in place, serving an estimated 20 million people.

The initial project was started by the GSM Association’s development fund. Says Rob Conway,the Chief Executive Officer of the GSMA – the global trade association for mobile phone operators. :

“GrameenPhone’s ground-breaking use of GSM technology has placed Bangladesh in the vanguard of our global push to use mobile networks to bring affordable Internet access and email to the billions of people in the developing world that aren’t served by fixed networks.”

Large parts of the world that haven’t had or still don’t have phones also lack electricity, which of course makes operating cell phones difficult. Both the cell towers and cell phones need to run off generators, old car batteries, or solar panels. But a new initiative by Ericsson and South African operator MTN looks to replace diesel powered generators with biofuels derived from palm and pumpkin seed oil. See Pumpkin Power Dawns for African Mobile Networks by Reuters.

Supported by GSM Association’s development fund, the project is first being trialed in Nigeria, then will be replicated in Uganda, Rwanda and Kenya.