Grameen Phone II

completed

This is an update of the original Environmental Review Summary completed for the parent project GrameenPhone (investment #7954) dated November 10, 1997. GrameenPhone Limited (GrameenPhone or the company) is an existing company, and is the leading cellular service provider in Bangladesh operating a nationwide, GSM, digital network with over one million subscribers, equivalent to a 70% market share. In addition to providing prepaid and postpaid cellular phone services, the company also assists in a -Village Phone- service by being the sole provider of telecommunications services to the Village Phone operators. The Village Phone service provides rural connectivity to approximately 30 million people. IFC previously funded the company’s initial network roll-out in 1999 by extending a financing package consisting of a senior loan of $16.7 million and a preferred share investment of $1.57 million for 3% of the company on a fully diluted basis. The purpose of the project is to fund the expansion plans of the company. Bangladesh continues to have one of the lowest telephone density rates in the world: the estimated telephone penetration rate (fixed line and cellular) is currently 1.5%. This project will help increase access to modern and reliable telecommunications services by funding the company’s expansion plans through to the end of 2004. The project sponsors are:- Telenor ASA: Telenor is the state-owned telecommunications company in Norway. It operates in a number of countries in Europe and Southeast Asia. The company is Norway''s leading distributor of voice, information, knowledge and entertainment through a broad range of modern communications services. Telenor became a listed company in December 2000. In 2002, Telenor achieved a total revenue of $7 billion, EBITDA of $1.7 billion, and a net loss of $0.5 billion. - Grameen Telecom: Grameen Telecom is a non-profit organization and a subsidiary of Grameen Bank, an internationally recognized microfinance bank. Grameen Telecom, with the help of Grameen Bank, administers the Village Phone services to villagers and trains the operators, as well as handles all service-related issues. The company’s shareholding structure is as follows: Telenor (51%), Grameen Telecom, (35%), Marubeni (9.5%), and Gonofone (4.5%).