Tracking the Introduction of the Village Phone Product in Rwanda

Abstract

This paper presents the results from a quantitative impact study of the Grameen/MTN Village Phone in Rwanda, which was conducted between June 2006 and August 2007. We find that the introduction of a Village Phone had a substantial impact on reported access to telecommunications for local entrepreneurs. While the introduction of phones did not follow the intended randomized design, we compare the changes observed in 94 study communities that received the phones to the 284 that did not. We find that the placement of a Village Phone in a community was associated with both an increased use of phones to transmit news and a greater propensity for farmers to arrange their own transit. Despite this improvement in access to telephony, the actual prices received by farmers were not affected. Impacts at the household level were muted by the relatively small size of Village Phone businesses and airtime usage rates, implying that profits must be transferred from other sources to pay off the phone in six months. Reported labor time in household enterprise increased dramatically for Village Phone operators, but positive impacts on consumption or overall business profits were not found.