Grameen Telecom Stakeholder: My Thesis Summary

Shareholder Role Analysis of Grameen Telecom

in Determining Management Strategy

THESIS

Asked To Obtain Postgraduate Degree

Masters in Telecommunications Business Management

Produced by:

Djadja Achmad Sardjana

B050011003

MASTER MANAGEMENT

HIGH SCHOOL BUSINESS MANAGEMENT

TELKOM EDUCATION FOUNDATION

2008

Grameen Telecom Stakeholder Thesis Summary

1.1 Review Against Object Study

Telecommunications has a very important role and strategic as a critical component of
infrastructure for economic development. Telecommunications services can replace other forms of
communication such as postal and often more effective use in terms of cost, time and distribution chain.
Other evidence shows that a reliable telecommunication system will trigger a new form of
communication is more powerful, complex, and productive of communication patterns of others. This
communication productivity improvement at the end of economic growth in that place.

The existence of a close relationship between economic development with telecommunications
services led to many developing countries tried to improve the existing telecommunications
infrastructure to improve service to the community. This started in early 1980 in which many developing
countries prioritize development of telecommunications facilities and launched an ambitious project to
develop telecommunication services. For example, in the seventies and eighties, surplus foreign
exchange from oil in some developing countries such as Indonesia, Iran, Kuwait, Nigeria, Saudi Arabia,
and Venezuela is used for massive investment in telecommunications. Several other developing
countries such as Hong Kong, Korea, Singapore and Taiwan using telecommunications as part of an
overall economic strategy to build a very competitive position in world markets for industrial and high
technology services.

Despite facing constraints in telecommunications industry restructuring, some developing
countries have succeeded in not only opened the competition. They were at the same time achieving an
obligation to the public telecommunications services (Universal Service Obligation / USO). For example
the achievement made by Grameen Telecom (GT) in Bangladesh. Longer programs of Grameen Telecom
in cooperation with providers of micro-credit Grameen Bank through its subsidiary-called Grameen
Phone, which allows members of the women obtained a revolving credit for trying to stall the field of
telecommunications in rural areas, who were originally included 950 Vilage Phone (read; Telephone
Rural ) and provides access to 65,000 people.

Grameen Telecom (GTC) is a company dedicated to increasing the penetration of
telecommunications and information technology, rural population. GTC currently provides mobile GSM
mobile phone 900 to the community in Bangladesh. Grameen Telecom's vision is to provide
telecommunications services to 100 million rural people in 68,000 villages in Bangladesh. The
Stakeholder relationships and business model are as shown in figure 1-1.

Figure 1-1 Grameen Telecom Business Model

Grameen Telecom is a business entity a non-profit organization that was founded at the
initiative of Professor Muhammad Yunus. Grameen Telecom holds 38% shares of Grameen Phone Ltd., A
company which holds a national license for cellular phone service GSM mobile 900. Companies have a
responsibility to provide telecommunication services rural areas in Bangladesh and also act as sales
agents for mobile telephones to individual customers in rural areas. Philosophical enterprise is to
provide universal access to telecommunications for rural residents and provide other value added
services.

Grameen Bank holds an important part in the implementation and extension of this village
phone program. This bank provides organizational support and infrastructure needed by Grameen
Telecom of the village phone operator selection of its members and also the collection of telephone
bills. Make GrameenBank Village Phone Program (Village Phone Program) for the first attempt to solve
problems of rural telecommunications as a bridge between communities and Grameen Telecom to meet
the basic needs of telecommunications.

The concept of "Village Phone" developed by combining GrameenBank experience in the field of
micro lending and digital technology is the latest wireless and give ideas on the central / private
telephone operators. "Village Phone" is a unique idea that provides modern telecommunications
services to the poor in Bangladesh. Members GrameenBank obtain ownership of the phone under a
lease-purchase program in which banks provide services to the public in rural areas. Bill "Village Phone"
and other payments collected by GrameenBank. Trust is very quickly making "Village Phone" will get a
project position post-paid wireless phones in the world's largest. Until the end of 2006, "Village Phone"
already has 260,000 subscribers / operator in 50,000 villages and 439 "Upazilas" (sub-distrik/kecamatan)
in Bangladesh.

In practice, any rural telephone under the supervision of a post-paid phone service in the village
is responsible for extending services to the customer service-customers for incoming and outgoing calls
and collecting call charges are appropriate for each phone. Income derived from the difference operator
between the cost paid by customers and payments to the operator "Village Phone".
The case of Grameen Telecom in This raises the question: "How can a successful model of these
organizations can work well? What is the role of stakeholders in the success of Grameen Telecom
business model is? How Grameen Telecom Stakeholders can answer the challenge of competition and
telecommunications reform in Bangladesh?

This thesis tries to answer these questions in which the specific context of a country associated
with the role of stakeholders is critical in determining success in the field of telecommunications reform.
Because of this reason that the business model of Grameen Telecom in Bangladesh is a unique solution
with Stakeholder involvement is very intense and can produce returns back above the average (above
average returns) for all parties concerned.

1.2 Background Issues

Although the liberalization and privatization trends globally developed, but the
telecommunications services in many developing countries are still dominated by institutions that most
or all controlled by the state. In some countries such as India, Algeria and Cameroon;
telecommunications services department was still part of those countries. In some other countries such
as Ecuador, Indonesia, Jordan and Thailand held telecommunications services through a semi-
independent institutions or state-owned enterprises and private companies legally protected. Argentina,
Chile and Mexico use this organization before privatization occurred in 1987 and 1990.
Telecommunication tereformasi only partially inhibits the development of telecommunications services.
For example, government-owned companies and telecommunications providers are less independent,

and the organization has the responsibility management, and lack of investment funds. In addition, this
organizational form hinders the development of telecommunications in general.
This is evidenced by the managerial problems at the state level because the government often leads to
discriminate telecommunication poor or remote areas that are politically insignificant. This resulted in
the operator prefers to spend its investment to other interests than to invest it to network
development,. Even when the private sector plays a major role in the telecommunications sector, poor
or remote areas tend to be ignored. The existence of the cost structure of network development,
telecommunications operators hesitated to invest in poor or remote areas. Not only because of high
costs, but also due to low demand and uncertain than the area or potential beneficial.

As one of balancing stakeholder interests of corporate profits and social mission, the
Government of Bangladesh through the regulator body, Bangladesh Telecommunication Regulatory
Commission (BTRC) issued licenses to telecom operators and other users, including government-owned
Grameen Telecom. They were given a mandate to facilitate telecommunications services with an
acceptable quality of customers in all areas so that Grameen Telecom of Bangladesh has a huge
opportunity to provide rural telecommunications services for customers who need GrameenBank.
One of the managerial problems at the industry level are identified in the telecommunications services is
the organizational structure of the telecommunications industry. As is known, was originally state-
owned enterprises (SOEs) to the monopoly by distorting market equilibrium through control and stable
prices of telecommunications services. This has led to the development of deregulation in the
telecommunications sector and the economic priorities in developing countries. Caused by rapid
technological innovation, a significant change in the price structure and the growth and diversity of
telecommunications, many countries to deregulate in the eighties. This is also caused by the
liberalization and the separation of American Telecom and Telegraph (AT&T) is also followed by
privatization and the emergence of competition in the UK and Japan. This policy gradually extends to
almost all developing countries joined the Organization for Economic Co-operation and Development
(OECD). In the nineties has 40 (forty) countries has been completed, develop and prepare a large-scale
reforms in telecommunications and in early 1989 more than half-Integration telecommunications
companies in the world has been controlled by the private sector.

Grameen Telecom as a company engaged in the field of Telecommunications (especially rural),
producing services & products such as "Village Phone". In conducting business activities is necessary to
implement management strategies to facilitate the achievement of its objectives, by way of seeing and
objectively identify the internal and external conditions, strengths and weaknesses that are owned, in
order to overcome the threats and opportunities to maintain or even expand the company's position in
the business environment tend to change rapidly.

Please note that 93% of shares controlled Grameen Bank poor women who are its biggest
customers. Ownership of these shares which have placed some poor women are illiterate as the
commissioner in making Grameen Bank and Stakeholders are very influential in the formulation of
management strategies at the corporate group including Grameen Telecom. Grameen Bank currently
owns 38% (through Grameen Telecom) in GrameenPhone a joint venture with Telenor of Norway, which
has a 62% stake in the company. This causes problems at the managerial level of the company (Grameen

Telecom) with a conflict of interest between shareholders, employees, customers, suppliers and other
stakeholders in the Effectiveness of Management Strategies.

Managerial problems is also supported by the groups understanding of the Stakeholders who
have a moral claim against the company with the potential to harm or benefit to them. It is important to
management trends on the one hand and shareholders on the other side to compete with other
stakeholders emerged as one of the topics important to business strategy formulation. Stakeholder
perspectives are very important in the case of the telecommunications industry because business
environments are highly competitive.

Based on the above facts, the research on Grameen Telecom is written with the aim to see and
identify further the role of its stakeholders in the process of formulating a suitable strategy for the
survival and development companies will be the future. As a basic problem (problem issues) which will
be discussed in this thesis are: Is it true that Grameen Telecom Stakeholder very important role in the
Effectiveness of Management Strategies?, What evidence behind that Grameen Telecom Stakeholder
very important role in the Effectiveness of Management Strategies?

The process and reasons for the emergence of the subject matter is the constituent; Why
Grameen Telecom Stakeholders was instrumental in Strategy Management Effectiveness?
Meanwhile, opportunities, expectations and challenges in this thesis is: What opportunities are available
for Stakeholder Grameen Telecom was instrumental in Strategy Management Effectiveness?, What is
expected by all stakeholders in the implementation of Grameen Telecom Management Strategy?, What
challenges faced by the Grameen Telecom as a very important role Stakeholders in Strategy
Management Effectiveness?

The expected benefits of the research are; proof rules that Grameen Telecom Management
Strategies for Successful Stakeholder roles are very active; Examining what factors from the role of
Grameen Telecom Stakeholder well functioning.

Base on these phenomena, it is deemed necessary to a study analyzing business feasibility
analysis, Grameen Telecom and precise formulation of strategies that can be found just how big a role in
the success of the Stakeholders Grameen Telecom's business model, the basis for the writer to take a
study titled "The Role of Stakeholder Analysis In the interests of Grameen Telecom Management
Strategy Effectiveness ".

1.3 Problem Definition

Based on the description of the problem background above, then the problem can be
formulated as follows:

θ Stakeholder Grameen Telecom has the vision and mission and role as an important part of
Effectiveness of Management Strategies and will change the objectives of the company than just a
source of shareholder wealth to balance stakeholder interests.

θ Strategic Questions:

¬ What is the Stakeholders as a group or individuals whose support is necessary for the welfare and
survival of the organization?

¬ What distinguishes institutional management strategies or superior-performing companies from
others?

¬ The extent to which stakeholder role in the effectiveness of Grameen Telecom Management Strategy
which is shaping the future of the business?

¬ How does the independent variable and the missions vision Stakeholders (X1), groups of stakeholders
Stakeholders (X2), Stakeholder groups who benefit (X3), and stakeholder groups associated with the
organization (X4) on the dependent variable effectiveness of management strategies (Y).

1.4 Research Objectives

1. Knowing how much influence the independent variable and the missions vision Stakeholders
(X1), groups of stakeholders Stakeholders (X2), Stakeholder groups who benefit (X3), and
stakeholder groups associated with the organization (X4) on the dependent variable
effectiveness of strategies management (Y), and the size of the relationship occurred.
2. Analyzing Stakeholder influence on the success of Grameen Telecom, the company
management.

1.5 Usability Research

• Provide recommendations for operators, regulators and investors in corporate strategy formulation to
consider the role of all stakeholders as part of an effort to win the competition in the
telecommunications business.

• Provide recommendations in solving managerial problems in the Grameen Telecom as a result of a
conflict of interest between shareholders, employees, customers, suppliers and other stakeholders of
the Effectiveness of Management Strategies.

• Provide information for other researchers to conduct further study.

• The results of the study is expected to enrich and complement the strategic areas of scientific treasury
of the company (Corporate Strategy) in the telecommunications industry.

1.6 Systematics Discussion

The preparation of this thesis is divided as follows: CHAPTER-I INTRODUCTION, containing a
description of: Review Against Object Study, Background Issues, Problem Definition, Research
Objectives, Usability Research, and systematic discussion. CHAPTER-II REVIEW OF LITERATURE,
Accomplished studies suggested that discusses Grameen Telecom, the concept of Strategic
Management and Stakeholder especially in the field of Telecommunications and its role in the business
of Grameen Telecom. CHAPTER III RESEARCH METHODS, discussing the type of research Used, Stage
Research, Research and Operasionalisasinya Variables, Data and Technical Data Collection, Sampling
Techniques, Data Analysis and Hypothesis Testing. CHAPTER-IV RESULTS AND DISCUSSION, gives details
of the model of Grameen Telecom, and evaluate how this system works. Based on these characteristics,
the core criteria determined how the role of Grameen Telecom Stakeholders can successfully develop a
vision and mission. CHAPTER-V is a conclusion some important findings Stakeholders role in the business
model of Grameen Telecom Management Strategy, and provides useful recommendations for other
developing countries that expect to succeed to the public telecommunications services.

Grameen Telecom Stakeholder: My Thesis Summary

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