Not far from the equator, a ribbon of red dirt track leads off the main road. The track is lined with coffee bushes draped with vines of vanilla and miles of banana, yam and cassava plants. These are shambas, small holdings owned by subsistence farmers in the heart of Uganda. Many live below the poverty line and there is no electricity.

In a village called Kkonkoma, on the roof of a small house there is an aerial. It is a mobile phone antenna for a home-based village telephone service run by 24-year-old entrepreneur Joseph Ssesanga and his family. Neighbours make telephone calls from his house rather than walk down the dirt track to the nearest public telephone some five kilometres away.

The business began when Ssesanga’s mother, Nakakande Teopista, who was supporting the family selling fish, learnt of small loans available to people wanting to start mobile phone businesses.

This is the Village Phone-model, which provides a business in a box. With loans, budding entrepreneurs can buy a mobile phone, a car battery to charge it, and a booster antenna that can pick up signals from base stations situated up to 25 kilometres away. The loan providers, so-called microfinance institutions, take on the task of ordering the equipment and transporting it to those who cannot afford to travel long distances.

By making money on every call she sells, Teopista managed to repay the loan in four months. She then began to invest. The family now operates in six villages, employs phone operators and even provides a phone-charging service for those with their own handsets. The fortunes of his family have been transformed, he says.

The Village Phone model was pioneered by Grameen Bank in Bangladesh. There are now 2,95,000 village phone operators country-wide. An offshoot, called Grameen Foundation, exported the model to Uganda in 2003. It brokered relationships between mobile operator MTN Uganda and with Ugandan microfinance institutions. The foundation has now moved to other MTN subsidiaries in Rwanda and Cameroon.

So successful has the model become that other donor, including the World Bank, are establishing village phone operators from Senegal to Nigeria. Village Phone operators make good business sense because public payphones are prohibitively expensive to maintain in remote areas.

But phone firms Grameen and MTN have begun a 15-month study throughout Uganda to find out whether operators could offer more services. The study might result in big changes to the Village Phone model worldwide. If customers demand internet access, for instance, MTN might offer phones with colour screens and faster connections — called GPRS — to allow webpage downloads.

Ssesanga doubts villagers in Kkonkoma will ask for access to the World Wide Web. “People need market prices for beans and tomatoes more,” he says.

BBC News