Towards A Connected WorldSocio-Economic Impact of

technology and large corporation

in Emerging Economies

Elin M. OftedalFor

Telenor ASA

Social and environmental challengeslarge corporations commonly seens as (part

of ) the problem

We all want to work for a ’better world’ – but do we have the right solution?

Can large corporation be a part of the solution?

There is a growing body of evidence asserting that corporations can do well by doing good.Well-known companies have already proven that they can differentiate their brands and reputations as well as their products and services if they take responsibility for the well-being of the societies and environments in which they operate.

Telenor – an example of profitable sustainable growth

Telenor’s primary objective is to create greater value for its shareholders, customers, employees and partners, and for society in general.Telenor strive to be a leader in creating, simplifying and introducing communication and content solutions to the marketplace.

Telenor home and abroadTelenor has two different roles in the domestic market compared to foreign market

In the domestic market, Telenor is the established giant In foreign market, Telenor is a small operator, a newcomer, a challenger – an innovator.

The role as the challenger abroad allows Telenor to have a more youthful and fun appearance, which is reflected in the image of the partners.Further, Telenor strives to be a ’clean’ participator in the business environment. Over time, this has heightened their legitimacy among government and population.

Telenor Asia

The Telenor Group entered the Asian region in 1996 through the successful investment in Grameenphone in Bangladesh.

Since then, the Asian markets have been a cornerstone of the development of the Telenor Group, providing growth opportunities in some of the most populated and fastest growing markets in the world.

Telenors venture into Bangladesh

At first glance, Bangladesh may appear a strange choice for a Western telecom looking for long-term and sustainable growth in overseas markets. The impoverished East Asian nation suffers from rampant corruption, frequent strikes, underdeveloped infrastructure and one of the lowest telephone densities on earth.However, the offer to cooperate with Bangladesh came from Grameen Bank, led by Muhammed Yunus.

Muhammed Yunus and Grameen Bank

One of the world's most celebrated authorities on development economicsGrameen Bank through Yunus had an interesting program for improving lives through so-called "micro-loans" to poor women enabling them to establish private businesses.Received Nobel Peace Price 2006

Telenor in 1996Telenor was a global telecommunications operator.

Norway,Hungary,UkraineRussia.

Modest in comparison to larger global players (Vodaphone etc.)

Revenue turnover of US$3.4 billion net profit of US$297 million,

modest company, more limited ambitions, somewhat “socialist” culture

Large risk & entrepreneurial spirit

Swedish Telia first had the offer of cooperating with Grameen Bank, but turned it down due to riskIndeed for Telenor, Bangladesh fell outside its “comfort zone” of their operations.

The social objective of alleviating poverty via mobile telephony services seemed far too ambitious to risk large capital investment.

Despite this, under Hermansen’s patronage the Bangladesh operations moved forward

Feasibility studyAfter conducting separate analyses of urban and rural subscribers, the best-case scenario for such an opportunity seemed quite attractive for Telenor.

If only five percent of the country could afford a mobile phone, that would be a bigger subscriber-base than the population of Norway.

Worst-case estimates, however, were very daunting.business climate was discouraging, virtually no regulatory regime in place.the rural market looked likely to be very expensive to serve because of a near-total lack of essential infrastructure.

Opportunity of good partnership

However, Grameen would give enormous legitimacy and name recognition, perhaps even beyond the country's borders. Grameen Bank proposed what Telenor considered a reasonable partnership solution.SO despite its severe initial doubts, Norway's Telenor A/S together with Grameen bank saw a unique opportunity to pursue multiple bottom lines, "doing well by doing good".

Success?But could Telenor hope to profit in the long term by such efforts? How would such a venture affect the company's bottom line objectives?the GrameenPhone joint venture exceeded everyone's expectations. Villagers were able to access one of the most modern cellular phone technologies in the world, while paying one of the cheapest rates in the world. Telenor had taken it’s first step into Asia.

The mobile operations in Asia contribute significantly to the revenues of the Telenor Group. In the first quarter of 2009, the region generated 28 per cent of the revenues. At the end of the first quarter of 2009, Telenor had a total 67 million mobile subscriptions in the region

High growth and solid financial performance

But what is the impact Telenor can make?

The importance of technology to economic progress

Although the impact of the Internet on the way people live, work and play has often been discussed, few studies take a holistic view of the economic and social impact of Internet adoption can have in developing and emerging economies.

The impact of the Internet

The Boston Consulting Group was appointed by Telenor to conduct an in-depth examination these issues.

To be comprehensive and meaningful, a broad definition of “Internet” was used, and includes the benefits regardless of means of access (mobile, fixed, wireless, dialup, etc.) or device (computer, smartphone, etc.).

The study analyses the social and economic impact of Internet in emerging economies. The analysis was conducted in Bangladesh, Thailand, and Serbia, covering three different stages of market maturity in the Telenor Group markets.

Economic Impact

ConclusionThe Telenor case shows us that

Large corporations can successfully pursue social entrepreneurship opportunities.Large corporations can more effectively fight corruption in a country, by ’going the extra rounds’.Large corporations can spur development in a country by understanding the impact of their product/ technology on the society.

Easier for a telecommunication company? Perhaps, but in rural societies it takes so little to make a difference.

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