A Promise Unfulfilled: The Telenor- Grameen Telecom Story

by Lamiya Morshed

When Professor Yunus arrived in Oslo on invitation of Norwegian Government on the morning of 29 March, there was already intense media interest in the Nobel Laureate's visit in relation to his efforts to get Telenor to agree to sell 13% of Grameenphone to Grameen Telecom, the minority partner in joint venture with Telenor.

The matter had first erupted in the Norwegian media just weeks before the Nobel Peace Prize Ceremony in December 2006 after Fortune magazine, a widely read financial magazine in the US , had printed a cover story on this issue. Sheridan Prasso of Fortune in the US had reported after a visit to Bangladesh that Telenor had not honored an agreement with Grameen Telecom to cede majority control of Grameenphone, according to a shareholders agreement signed by the partners in 1996. She wrote in the article that the agreement provided for Telenor to reduce its ownership company to 35% by 2001. Since 2001, despite repeated attempts from Grameen Telecom side, there had been no move from Telenor in that direction

The Fortune magazine story was picked up by media worldwide, and on Professor Yunus' arrival in Oslo in December to receive the Nobel Prize, Grameenphone was at the center of media storm. There was an outcry among the Norwegian media and public that Telenor should honor its agreement and give majority ownership to Grameen Telecom. In his Nobel lecture, Professor Yunus said that he hoped that Grameenphone would one day, like Grameen Bank, be owned by the poor women of Bangladesh

On arrival this March, he was once again accosted by journalists from national newspapers, TV and radio at every stop asking what he expected from Telenor during this trip. All papers had been covering the story for several days. One leading daily, Dagbladet, had mounted a campaign every day for 2 weeks leading upto Professor Yunus' arrival in Oslo pressing Telenor to keep its promise. The young journalist from Dagbladet had even come to Oxford , Professor Yunus' last stop before Oslo.

In the days leading upto arrival in Oslo , Professor Yunus received an invitation from Fredrik Baksaas, CEO of Telenor to visit him at the Telenor Headquarters and Professor Yunus had agreed. Every journalist and reporter in Oslo asked Professor Yunus what he expected out of the meeting with Telenor.

Since there had been no progress in the negotiations with Telenor, Professor Yunus decided on this occasion to speak to the media. He said that Grameen Telecom had two issues with Telenor. The first was the ownership issue. Telenor had signed an agreement in 1996 in which it agreed to reduce by 2001 its ownership to below 35%. Currently, Telenor owns 62% and Grameen Telecom owns 38% of the company. Initially Telenor said that there was no such agreement. A copy of the agreement was then published by Dagbladet in Norway . Later on, Telenor claimed that this document was not legally binding.

Grameen Telecom had no intention of fighting this in courtrooms, but Professor Yunus hoped that Telenor would come around. He said Grameen Telecom no longer demanded that Telenor reduce its ownership to 35%, instead sell 13% to give Grameen Telecom 51% of the company. Grameen Telecom did not expect these shares to be donated, rather it would be willing to pay full market price for them.

The second issue was the issue of the logo change of Grameephone. In November of 2006, Telenor, in what it calls a "rebranding" campaign changed, almost overnight, the Grameenphone logo to the Telenor logo, without any agreement from Grameen Telecom.

The original Grameenphone logo, which had been jointly developed by Grameen Telecom and Telenor, was in the green and red of Bangladesh 's flag, and showed a rural woman connected on the telephone with an urban male. The logo carried in it the spirit and philosophy on which the company was founded.

The logo change had not been approved by the Grameenphone board. The Grameen Telecom representatives on the board of Grameenphone had been informed two weeks before the actual replacement took place, although it was clear that many months of planning, and millions of takas, had gone into this change in logo throughout the country. The change in logo, Professor Yunus said, was done unilaterally and in bad faith.

Nearly overnight, the green-and-red logo of Grameenphone disappeared and was replaced by the now-omnipresent blue "propellor" logo of Telenor. Professor Yunus told the media in Norway that he would press Telenor to bring back the original logo of Grameenphone.

During his visit last week, Professor Yunus was invited by the President of the Norwegian Parliament and former Prime Minister, Mr Thorbjorn Jagland, to meet with him and the five parliamentary leaders of the coalition government in Norway . In December 2006, during the Nobel Peace Prize celebrations Mr Jagland had written in the Norway Post that Telenor should reduce ownership in Grameenphone, as agreed by them in 1996.

Ms Marit Kleppa head of the Senterpartiet, a center left party in the governing coalition, said during the meeting, that it was "paradox" to her that Norway which was a leading partner of Bangladesh in development aid was with one hand supporting the country, and on the other hand Telenor was unwilling to hand over the shares that they had promised. The Senterpartiet had passed a resolution in the party convention in support of Grameen. Per Olaf Lundteigen of the Senterpartiet suggested that NORAD could give loans and guarantees to Grameen Telecom so they can buy shares in Grameenphone.

An interesting post editorial in Dagbladet by Halle Jorn Hanssen which appeared on the day Professor Yunus arrived in Oslo , talked about the situation in Norway when Mr Gunnad Knudsen of the Liberal Party became Prime Minister in 1905 to discover that most of Norways industry and natural resources were owned by foreigners. Knudsen took on the task of introducing acts and legislation in parliament as part of the campaign of buying back Norway , particularly Norwegian industry and waterfalls. The campaign was a great success. This approach formed the basis of the Labour Government's oil policy and oil legislation in the 70s. President of the Norwegian Parliament, Mr Jagland's position in support of Professor Yunus was therefore based on good Norwegian tradition of buying home the Grameenphone.

The Minister of Development, Erik Solheim, in a joint press conference with Professor Yunus during the conference said that "while the position of the Government was not to interfere in the dispute between Grameen Telecom and Telenor, his own political heart was with Grameen".

The head of the ethics center Norwegian School of Business, where Telenor CEO got his degree advised Telenor to sell the shares to Grameenphone to Grameen Telecom. The secretaries general of three of Norways most influential organizations, The Norwegian Church Aid, The Stromme Foundation and the Norwegian People's Aid also said they should sell shares in Grameenphone to peace prize winner Muhammad Yunus. "The way Telenor has treated Yunus is an embarrassment for Norway " says Alte Sommerfeltd from Church Aid.

Telenor however has made it clear that there was no change in the position. After 10 years of the partnership, which fell on March 26, 2007 , with 12 million subscribers reached in Bangladesh , their "corporate strategy" to retain majority ownership in this successful company. Telenor has made a statement that they will give an initial public offering (IPO) of Grameenphone in Bangladesh without specifying when. Telenor's position had clearly not changed.

Everywhere, during the stay in Oslo , people stopped Professor Yunus on the street to say that they support Grameen and hope that he would eventually get what he wants. " Norway loves you" said a Norwegian couple to him on the plane as we arrived in Frankfurt on March 31 to catch our connection back to Dhaka

The Grameen-Telenor partnership had come about due to a shared dream in 1996 of Professor Yunus, founder of Grameen Telecom, and Tormod Hermansen the then CEO of Telenor who both believed in the idea that poor people could use modern telecommunications to change their lives. In 2007, Grameen Telecom had brought mobile phones to nearly 300,000 rural women, and every village of Bangladesh was now connected to the rest of the world. Professor Yunus' dream is to see a day when Grameenphone is owned by the poor women of Bangladesh , as Grameen Bank is owned today. He believes that the people of Norway too share that dream.