Mobile Telephony in Kenya is it Making the life better

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					                Mobile Telephony in Kenya
            … is it “Making the life better”?
                            Luca Manica and Michele Vescovi

              Dipartimento di Ingegneria e Scienza dell'Informazione (DISI),
                                   University of Trento
                        via Sommarive 14, I-38050, Trento, Italy

1. Introduction
The last year we had the wonderful opportunity to visit Kenya in a different way compared
to the “common” tourists. In fact, we were both guests for a month at a mission located in
Nanyuki, a small city in the centre of Kenya, across the Equator. In this short period, we
had the opportunity to meet the local people, to talk with them, to spend time with our
Kenyan peers and to have contact with their culture and to have experience of their life.
We also could see the Country in many of its faces: from the skyscrapers and the crowded
suburbs of Nairobi to the arid, “old” North on the shores of Lake Turkana. Thus, even
thanks to the discussion with the missionary and his experience of a life in Kenya, we had
the opportunity to understand a little bit about Kenya and about what Kenyans think, what
they dream, what their needs are.

During our journey, we were both amazed about the obsessive and pervasive advertising
of the two mobile telephony companies, Safaricom (Vodafone group) and Celtel. Huge
advertising posters, higher and larger than buildings, were placed by these companies all
along the roads of the Country. Further, these companies not only affixed conspicuously
their advertising signs also in remote villages, but also they sponsored most of the
commercial activities of the village painting the shops’ walls with their colours: green
(Safaricom) and red (Celtel). Moreover, when we were approached by screaming children,
after they said “Wasungu” (the Kiswahili word meaning “white men”), they often asked us
“Mobile phone! Mobile phone!”. We were (we still are) amazed about such a request
because we thought (think) that priority should be food or clean water and in their condition
of life a mobile phone was useless or at least redundant.

Anyway, starting from our surprise we have decided to investigate different facets of
mobile telephony in Kenya. More in details, in this work we firstly think about how ICT can
play an important role in human development and then we try to figure out what is the
impact of the mobile technology in a culture completely different from ours, like the Kenyan
one (Section 2). Successively, we describe the development and the evolution of mobile
telephony in Kenya during the past decades (Section 3). Moreover, we present a list of
projects in which the mobile phone has shown to be a useful tool to get better conditions
for local people. In particular, we analyze the e-banking (via mobile phone) system M-
PESA (Vodafone/Safaricom). For all these issues we analyze advantages and
disadvantages trying to report an impartial view of the situation. Finally, our conclusions
are drawn in Section 4.

2 New Technologies and Human Development
It is common to be very optimistic when a new technology has been developed. In
particular, the Developing Countries put their trust in the ICT as new opportunities of social
and economical growth. However, we need to understand the right ways of application of
ICT in order to effectively produce an enhancement of the life conditions of all the people
in those countries. Two are the key points that have to be taken into account with respect
to this flawless, optimistic vision of ICT for development: firstly, economic growth does not
mean human development and, second, technology is not a magic wand for all the
problems. Moreover, as the wizard apprentice learns in “der Zauberlehrling” by Goethe,
sometimes the technology can cause more damages than benefits.

In this section, we deal with the main issues before mentioned. More in details, in section
2.1 we briefly explain (and criticize) the model commonly chosen by Governments and
International Organizations to describe the connections between social development,
economic growth and technology. The choice of this model leads to social and economical
policies that seem (in our opinion) to be not appropriate to provide a wide human growth in
Developing Countries. Moreover, in section 2.2 we report some details about our
experience in Kenya underlying the modifications in the Kenyan culture and living due to
the introduction of mobile phone.

2.1 The Actors of the Development

In this section we analyze the main concepts present in the UNPD (United Nations
                                                         Development        Programme)       Human
                                                         Development Report 2001 [1]. This
                                                         document is fundamental to understand
                                                         the way of thinking of the people
                                                         working       in     the      development
                                                         establishment: operators, co-operators,
                                                         technicians and politicians. The key
                                                         ideas expressed in that document can
                                                         be summarized describing the graph in
                                                         Figure 1, which shows in an effective
                                                         way the links between technology
                                                         innovation, economic growth and
                                                         human development. The link between
                                                         technology innovation and increment of
                                                         the human capabilities is direct;
                                                         however the technology innovation is
                                                         the    expression       of   the    human
                                                         potentialities (a high level of scholarship
                                                         leads to the creation and the diffusion of
                                                         the technology). Moreover, there is an
                                                         indirect link between technological
Figure 1: links between technology and human development innovation and human development. In
this link we underline the key role of the economic growth. That variable seems
independent from the human development and it is linked just with the technological
innovation. In our opinion this is the weak point of such view of the development. More in
details, from this graph appears clearly that it is impossible to have resources for
education, health or communication without economic growth.

But the economic growth is just a number that quantifies the growth of the GNP (Gross
National Product) or the growth of the average incomes for person. The economic growth
does not give any information about how the moneys are really divided among the whole
population of a country and if all the people profits by such a variable. For example, this
“number” does not take into account: the quality of life of the common people, the
education rate, the efficiency and accessibility of the health system. Thus, even if we
agree on the fact that if there is no economic growth it is impossible to spend money to
improve the condition of life of the people, in contrast economic growth does not imply an
effective human development.

For this reason, since the goal of our activities is the development of the human capability
and not the economic growth, it is fundamental that the introduction of information and
communication technologies is achieved with the aim of providing an effective benefit for
all the population and not just for a small part of it. ICT technologies offer an amazing
range of opportunities of development, but there is a huge difference between deploying
them as service and deploying them for business (selling them as a need to snatch money
from the population). Maybe the total amount of money earned by the first solution will be
lower, but we are not business man.

2.2 The Morana’s Mobile Phone

In our journey in Kenya, the most attractive (and amazing) advertising sign we saw
represented a group of warriors of different Kenyan ethnic groups dressed whit their
traditional clothes, embraced each other. The group was smiling and was using the last
generation mobile phone. Why does a Morana (Samburu’s young warrior) need a cell-
phone? Why do poor families have a cell-phone? Why did the children ask us a mobile
phone instead of a candy or a pen? In this paragraph we try to answer at those questions.
More in details, we briefly explain what we learnt in Kenya about the local culture and its
relationships with the so called “Progress”, the mutations of a society not used to the
technology, we briefly depict our feel about mobile telephony in Kenya and, then, we
summarize the new opportunities that the mobile phone is taking to Kenyan people.

The behavior of the people when deal about poverty is similar for the different cultures: the
poor is ashamed to be poor and thus he tries to hide his condition. That happens because
the poverty is seen as damnation, something that punishes the man for past crimes or for
a personal inferiority condition. On the other hand, a rich man is appreciated, gets
respectfulness, can have marriage (the women are paid in cows or goats) and also he can
support his family (or, often, more than one family). The possession of a mobile phone
raises the man in the social scale because it indicates that a man is not poor. Moreover, a
mobile phone is the less expensive between the other “status symbols” (cars, houses,
holidays, etc.) and thus it is appetizing also for the poor people. This fact causes a
different use of the financial resources of a family. They are spent to buy and maintain the
mobile phone and not to buy food or for the school.

“Status symbols” first of all affect our society, but it might be amazing to state that these
symbols, these byproducts of the western consumerism, attained a completely different
culture where the historical symbols of richness were directly linked to the real, concrete
needs of a life (e.g. to have more goats or a larger habitation, etc.). This is a social
consequence of another new important cultural factor. The Kenyan would be like the
“White”. They are proud to be Kenyan but they do not want to live as Kenyan. They

showed us to trust often more in white men than in their selves. The white man is seen as
rich, he is the winner and the local people will do everything to be like him. This
perspective is also due to the impact of television and of the commercial advertisement, it
is an effect of the globalization of markets and consumptions that lead to a
“westernization” of the cultures. This fact leads, in the specific case, to an increasing of the
number of mobile phones sold and to a “rejection” of their culture, because it is poor and
thus loser. The before mentioned factor produces important consequences: from a social
and micro-economic point of view, because when the local culture is lost all the familiar
relationships become weaker. Those links between the individuals guarantee an effective
net of protection and assistance for the weaker people of the society, especially in a large-
family based (or tribe based) culture like the Kenyan one. Moreover, from a macro-
economic point of view the Government assigns higher priority and allocates financial
resources in building useless high-tech infrastructures. The technology has drained (from
the top) resources that could be spent for the real needs of the people. Furthermore, just
the strong part of the society (business-men, politicians, etc.) gets advantages from the
new technologies, increasing the gap between the conditions of life of rich men and poor
persons. In the meanwhile the technology is still draining (from the bottom) resources from
the budget of the common families; mostly, these resources do not revert on the local
community but they contribute to accrue the incomes of the (mainly foreigner)
telecommunication companies’ investors.

On the other hand, the diffusion of the mobile phone takes some advantages: Africa
essentially have not a wired telephonic infrastructures and now the wireless connections
have solved (some) problems of communication between rural areas and cities. Moreover,
it creates opportunities of economic growth, for example: the Masaai shepherds can
receive information about water sources for their cows; the sellers can know the “right”
price for their goods and e-banking services have been developed using mobile phones.
Mobile telephony offers a wide range of opportunities: to overcome communication and
information problems, to create new business and new employment, to reduce some costs
(like, e.g., in traveling or in money transfer), to simplify the every-day life.

These contrasting realities show that there is no right or wrong in ICT or in the introduction
of new technologies for the development. Mostly, it depends from: how these technologies
are introduced, what the real purposes are (the trade-off between business and
development), how they are “sold” (i.e. introduced) to the people.

2.3 Mobile Phones and Election Day

A concrete example that includes pros and cons of the introduction of the mobile phone
technology in Kenya regards the past election in December 2007. The President Mwai
Kibaki declared his victory but the leader of the opposition Raila Odinga accused him to
gerrymandering and he started a series of hard demonstrations contesting the result of the
vote: Kenya was falling in civil war. As a consequence, Kibaki ordered a “news blackout”
[2], in which all the media suspended the broadcast of the news.

Since just few Kenyans have internet connection (3.2%) the presence of the mobile
phones was fundamental in order to describe the evolution of the crisis and the atrocities.
More in details, SMS [3] [4] play a fundamental role, as an example, a prominent online
forum Mashada launched a SMS hotline to help shared information [5]. With that
information, the people were able to avoid the most dangerous places of the Country and
to escape when the conflict was moving close to them.

On the other hand, the uncontrolled broadcast of news using SMS led to a spreading of
false news that the people considered correct. Because the news blackout the people did
not have any opportunities to check and to control what the mobile phones transmitted.
Even, many other SMS messages containing ethnic hate speech designed to incite
violence (or to organize rumors and retaliations) was sent and spreaded through group
sending, highlighting the potential negative uses of text messaging1. As a result, the power
of the information was used to manipulate the people and to increase the level of the
tension in the Country. This is a reminder of both the power and the danger of technology
and information (in this case media, mobile phones and SMS) when it meets suddenly,
instead of as consequence of a gradual and smooth process, a population (especially the
uneducated or low-literate part of it) which mostly have not developed yet a critical
approach to the technology and information it selves.

  Even if we lack of an official bibliography, these facts has been often reported by the news outcoming from
Kenya in that period. Further, these misuses have been confirmed by the witnessing of many western
observators, missionary and volountiers and, also, by local witnesses.
As matters of example we refert to these two , that we avoid to include in the bibliography due to their
informal and unofficial character:
     - Tanja Estella Bosch. Mobile activism during the 2007 Kenyan elections. TEBlog. April 23rd, 2008.
     - When SMS messages incite violence in Kenya. In an african Minute. February 21th, 2008

3. Mobile Telephony in Kenya... it “Making life better” (?)

In this section we review the current situation and use of mobile telephony in Kenya. In
particular, we want to cover not only technical and statistical issues but also go deeper into
specific services, pros and cons of mobile telephony, looking for answers to our previous
questions on the impact of mobile telephony on the life of the people and on the overall
human development of the Country.
In Section 3.1 we briefly report some facts regarding the growth of mobile telephony in
Africa and its reasons. This helps us to describe the whole context of which the Kenyan
case is part. In fact, the situation we experienced in Kenya is common to many other
African Countries and, for this reason, Kenya can be considered a good witness for what
concerning the issues related to mobile telephony in the whole continent. Further, the
analogies between what is happening in Africa and what is happening in the particular
case of Kenya prove that we are dealing with a global phenomenon and global issues that
hold in many other Developing Countries.
Instead, in Section 3.2 we focus on Kenya. In that section we describe: the history of
mobile phones in Kenya, the current usage, the coverage, the operators, the comparison
with fixed-line communications in the Country and the lacks of the current markets from
the perspective of the majority of the Kenya’s population. In Section 3.3 we show the
complexity of the Kenyan mobile market through the description of some innovative
services well suited to the request of the local market. Finally, from Section 3.4 we put our
attention into the opportunities of development through mobile telephony, focusing in
Section 3.5 on the innovative e-banking M-PESA system.

3.1 Mobile Telephony in Africa

Mobile telephony has become the most important mode of telecommunications in
Developing Countries, thus in Africa indeed. For a large part of the population mobile
telephony results an “affordable” friendly technology, while Internet access is a reality for
many businesses and public institutions, but it is still an expensive technology restricted to
individuals with higher levels of education and incomes.

In the last ten years the ICT community have witnessed the explosive growth of mobile
telephony in Africa. Nowadays, mobile phone has become the first communication
technology having more users in Developing Countries than in the Developed ones; in
particular, looking at the mobile subscriber numbers, Africa is showing the highest growth
rate worldwide. At the end of 2007 the number of mobile users in Africa has gone beyond
225 million, double the number registered just two years before and almost ten times with
respect to 2000 and with respect to the number of fixed-lines [6][7][8]. This phenomenon
regards also Kenya, where the number of mobile subscriber has grown in five years from 2
million to more than 9 million at the end of 2006 [9].

The reasons of this success are manifold.
   - Firstly mobile telephony is the first accessible service for most of African people (no
      alternative services were accessible in many areas); in fact fixed-lines are available
      almost only in urban areas and, even if they reach some rural area, they are usually
      very expensive, often down due to poor maintenance, floods and even due to theft
      of copper cable. The large majority of African countries lack of an efficient and

       spread network for the traditional telephony, but with mobile telephony it is easy to
       cover long distance and to overcome to the absence of infrastructure and of
       electricity in rural areas deploying a new network in a relatively easy way.
   -   For the population, the cost of a mobile handset and of the mobile subscription is
       more affordable with respect to the cost of a fixed-line.
   -   Income, gender, age, education doesn’t create a major barrier to access and use of
       mobile phones. Mobile phones are a relatively simple technology, understandable
       and simple to use even for uneducated people.
   -   With respect to other technologies like internet, it is an immediate oral-based
       communication system “fitting” the African cultural tradition, where the social
       relations are largely based on oral communication.

Often, like partially in Kenya, the complete modernization of the telecommunication sector
has been achieved in within a few short years as work of private companies and at “no
cost” for the local governments which, further, beneficiates of the activities of the
telecommunication operators through huge revenues from license fees, custom duties and
taxes on calls. The Kenyan government, like many others in the continent, have obliged
mobile operators to provide certain population coverage as part of their license conditions
[13]. However, as counterpart, the network is often ownership of western companies
instead of the governments.

However the ingredient which mostly seems has made this revolution possible is prepaid
systems. Initially international telecommunications companies were not interested in the
African continent: “Who cares about people whom live mostly with less than 1USD/day?”,
“Which kind of business can be run in such a market?” Mobile telephony shown that huge
business can be run and prepaid systems have made possible to broadly provide mobile
coverage to the population, addressing the specific market requirements of Developing
Countries. From the companies’ side it reduces the investment cost by avoiding
investments in expensive billing systems. Billing, receiving payments and collecting money
are, in fact, inefficient and expensive activities in Africa. From the users’ side it reduces the
fixed costs of the services allowing who cannot afford credit on a regular basis for buy just
a few airtime minutes per time [13]. In this sense the flexibility in pricing through per
second billing has made the difference in Kenya. In other words prepaid mobile has
lowered the threshold of telephone ownership, transforming millions of poor people with
low-incomes perfect consumers of small chunks of airtime. Most GSM operators in Africa
are turning out phenomenal financial results such that the market of mobile telephony in
Africa is currently a huge business which has estimated already in 2005 to worth 25billion
USD with a 2billion USD a-year industry of small airtime vendors [14]. How much of this
business goes in development?

Nevertheless, even if to own a personal mobile phone has become an induced status-
symbol for the people in almost all the African countries, most ordinary people of these
countries still can’t afford mobile phones. So handsets are often shared by small groups or

3.2 Review of the current situation of mobile telephony in Kenya

In this section we review the past and current situation of mobile telephony in Kenya. To
better understand this review it is important to know the situation and conformation of this
country and the life conditions of the majority of his population. We remand the reader to
any source of such information that are not topic of this document. However, in the
following we briefly report some fundamental data about Kenya.

At the end of the 2006 Kenya has an estimated population of about 36 million people. The
75% of the country is classified as arid and semi-arid land inhabited mainly by pastoralist
communities. Connections (e.g. roads) between the rural areas far from the capital
(Nairobi) or the bigger cities are often very difficult [9]. About 65% of this population live in
the rural areas where access to communication services is often limited. Moreover, only
the 40% of the population manage to achieve incomes above the poverty line, where as it
is estimated that most of the remaining population lives with incomes of 1USD/day or less
[7]. We think that this last fact is a key point. We strongly suggest the reader to keep it in
mind to have a clearer vision of all the topics we are going to present.

Mobile Telephony in Kenya in brief

As stated before, the impressive growth of mobile telephony in Africa is, indeed,
concerning Kenya as one of the most advanced country in this field of the Sub-saharian
Africa. At the end of 2007, Kenyan mobile operators offer services to more than ten million
people [12] so that nowadays one in three adults carry a cell-phone in Kenya and about
the 80% of Kenyans are covered by mobile network signals2 [11]. The network is still
growing and mobile operators are extending their coverage reaching even more remote
areas of the country (Figure 2). In one year, from 2006 to 2007, the cellular mobile
services recorded an increase in the number of channels installed in GSM base station
transmitters, from about 15,000 to about 20,000. This increase could be attributed to the
increased subscriber base, requiring mobile operators to increase investment in network
expansion [11].

It is difficult to establish exactly the penetration of mobile telephony in the Kenyan
population, due to the sharing of handset and the use of “mobile payphones”.
Nevertheless, official numbers regarding subscriptions are around 30%. This value is still
low with respect to other countries like Nigeria, South Africa or with respect to the
developed areas of the World. So there is plenty of room for business yet to come; there
are still about 25 million Kenyans to sell phones to. This fact together with the current
volume of the business – e.g. mobile industry contributed to more than 5% of GDP of
Kenya in 2006 [10] – explains the noticeable rush around new services, technologies
licences, plans, pervasive and impacting advertisement in which Kenyan mobile operators
are going into. Is it a rush aimed to human and social development?

  For example Safaricom (the leading mobile operator of Kenya) declares coverage of approximately the
70% of the population of Kenya and 20% of its geographical area as of March 2007 [11].

Frequency, Technologies, Mobile Operators and Coverage

Historically, mobile telephones were first introduced in the Kenyan market in 1992, but the
real diffusion of this technology and of affordable services started in 1999 when the
Communications Commission of Kenya (CCK) was established and the newly privatized
company Safaricom and Celtel Kenya (previously known as KenCell Communications)
were licensed by CCK to provide mobile services. These two operators, those currently
providing mobile connectivity in Kenya, have covered gradually the majority of the
populated areas, and they are still continuing in this trend of growth.

          Figure 2: A tower for mobile telephony recently installed in the middle of Loyangalani:
                 a remote village on the Lake Turkana shores in the arid North of Kenya,

Let us turn from the global view of the whole Country situation to a more detailed one,
taking into account the coverage of the different areas of the Kenya’s territory.

As matter of example we report in Figure 3 the subdivision by province of the Safaricom
Base Stations [12]. Having a knowledge on the political and physical geography of Kenya
it is possible to note how the services are differently extended in the country with respect
to: the population’s (and thus also business’) density, the presence of tourism areas, the
rout of the main links (roads, railway, etc.) and the urban/rural/land conformation. The
poorest and remotest areas of the country (i.e. the arid zones in the North and East of the
country extending toward Sudan, Ethiopia and Somalia), obviously, have been historically
the latest reached by the coverage and they are actually those with the lowest covered
territory (see also the following table of comparison between the current coverage maps of
mobile operators). In Kenya development has started from business and tourism and
(maybe) sooner or later it will reach the real emergency areas.

 Figure 3(a): Subdivision of Safaricom Base Stations by   Figure 3 (b): The Kenya’ provinces.

Technologies and Frequency
In the following we review both the technology and the companies which are currently
licensed and operating in Kenya.

The mobile network operates on both the 900 MHz and 1800 MHz GSM bands like most
European carriers. Further than GSM, also the GPRS and EDGE services are supported
by the network.

Recently, the Communication Commission of Kenya assigned 5-MHz of bandwidth in the 2
GHz band to each of the existing two mobile operators (Celtel and Safaricom) in Nairobi
and Mombasa to enable them carry out trials on 3rd Generation mobile cellular system. At
the end of 2007 was granted to Safaricom a licence to install and operate 3G systems and

Safaricom was set up in 1997 and became a joint venture vehicle between Telekom Kenya
and the Vodafone Group in 2000. Safaricom offers mobile voice services using GSM-900
and GSM-1800 technologies. It launched GPRS services in July, 2004, and Enhanced
Data Rates for GSM Evolution (EDGE) services in June, 2006. After being formally
granted Kenya’s first licence to install and operate 3G system and services in October
2007, Safaricom’s 3G network has already been available to Nairobi subscribers, although
the commercial launch is planned for second half of 2008.

Celtel won a GSM-900 licence in January 2000 and launched services in August of the
same year. The company launched under the KenCell brand and took on the Celtel banner
in November, 2004. Also Celtel now provides services through the GPRS and EDGE

Telkom Kenya (CDMA 2000)
Telkom Kenya, the fixed-line operator in Kenya, launched fixed wireless services based on
CDMA-2000 technology in the 800MHz frequency band in July 2007. Telkom Kenya offers

these services using a licence, which allows it to offer wireless telephone services within a
restricted area. However, because the CDMA 2000 devices are small in comparison to
mobile handsets, users have actually been using the service as a mobile substitute. This
move attracted the opposition of Safaricom and Celtel, who argued that Telkom Kenya
was offering mobile services in the absence of an adequate licence. Since excise duty only
applies to services offered by operators owning a mobile licence, this meant that Telkom
Kenya was able to offer much reduced prices compared to those of GSM operators.
As a result, the Kenyan Government has formalised an authorisation to Telkom Kenya to
offer mobile services using CDMA and/or GSM technology. Upon the award of the mobile
licence, Telkom Kenya will also have to comply with the excise duty regime applicable to
mobile services (currently 10%).

The following table and Figure 4 give an overview of the Kenyan mobile market share by
the two main mobile companies. Each offers similar technology and coverage to a similar
primarily-prepaid customer profile.

                        Government of Kenya (60%)            Celtel-International (80%)
                       Vodafone Kenya Limited (40%)         Sameer Group [Kenya] (20%)
  Market share                    80%                                  18%

                      GSM 900 and GSM 1800: 1996,
                                                               GSM 900: August 2000,
   Technology                GPRS: July 2004,
                                                               GPRS: December 2005
                      3G Full Licence: November 2007

   Subscribers       9,245,000 as of 31 December 2007     2,104,000 as of 31 December 2007
  Prepaid share       98.8% as of 31 December 2007         98.0% as of 31 December 2007

Areas of coverage

                            Figure 4: Mobile marked share in the years

The third mobile operator controversy
Additionally, the Kenyan regulator issued a third GSM licence to Econet Wireless Kenya
in December 2003. Econet is a South Africa based telecommunication company. However,
since 2004, Econet Wireless have been embroiled in long legal battles with its local
Kenyan partner on the one hand and the Kenya’s government on the other hand. In fact,
Econet failed to commerce operations in time after her main local partner KNFC (Kenya
National Federation of Cooperatives), failed to raise its part of the licence (12 million USD
against the 15 million USD paid by Econet). Pulling out of the consortium KNFC leaded the
“30% rule” (that requires that local shareholders in the winning consortium hold at least a
30% of the stake) being unsatisfied [15][12].

The failure resulted in a court dispute which was not resolved until 2006 when the courts
allowed Econet Wireless to take up the stake owned by KNFC, or seek other partners.
Econet Wireless finally paid, in January 2008, the 27million USD licence fee to the
communications regulator. A few months deadline has given to roll out or risk losing the
licence, thus Econet Wireless has until August this year to start the activity of Kenya’s third
mobile telephone company. Together with the mobile licence Econet granted the second
fixed-line licence in Kenya, possibly providing for the future an alternative to the landlines’
monopoly of the state firm Telkom Kenya.
Will Econet Wireless be successful? If successful, will the end of the duopoly in Kenya’s
mobile telephony cause a price cut in calling rates? ...and shall we imagine that the blue
(of the Econet Wireless logo) will be the colour painted on the Kenyan walls between the
Safaricom’s green and the Celtel’s red?

Fixed-lines vs. Mobile network

Now we directly compare the situation of fixed and mobile telecommunications in Kenya
through the official data and charts published by the Communication Commission of Kenya
referring to the period 2006/2007 [9].

Mobile teledensity has shown continuously superior growth over the last years when
compared with fixed-line teledensity (managed by Telkom Kenya) which, in contrast, has
decreased due to the substitution with mobile telephony (Figure 5). Only in 2007 the fixed-
line teledensity restarted his growth. In fact, fixed wireline network had stagnated below
300,000 subscribers (where a high percentage is due to government lines) over the years,
but the introduction of fixed wireless systems based on the Code Division Multiple Access
(CDMA) technology has seen the total number of fixed network subscribers grow to
330,000 by the end of June 2007, and this phenomenon is expected to continue improving
in the forthcoming years.

                     Figure 5: Fixed-line and total (wired and mobile) Teledensity in Kenya

It is important to note that 66,000 lines are due to CDMA and above all that the great
majority of landline subscribers (94%) live in urban districts, while only the 6% of fixed-
lines reach out to rural areas. Notice that the number of “Waiters” in the past years
represents the presence of a need of communication. Even if the number of wired
connection is not increased the number of Waiters is decreased since (it can be supposed
that) this need has been satisfied by mobile telephony. In the meanwhile the total traffic
between the fixed network and the mobile one has halved; it can be supposed that this
type of traffic has been substituted by cheaper mobile-to-mobile traffic.

           PERIOD              2002/03         2003/04          2004/05         2005/06           2006/07
 Exchange Capacity                 508,000         531,442          513,820         516,993          505,103
 Wireline Connections              328,358         299,255          278,867         293,364          263,122
 Wireless Connections                    0                 0              0                   0       66,236
 Urban Connections                 309,070         284,264          264,509         279,079          251,924
 Rural Connections                  19,288           14,961          14,358          14,285           11,198
 Waiters                           111,867         109,758           93,192          64,618           26,925
 International Outgoing
                                24,496,000       26,699,445      42,558,605      46,957,348        27,363,876
 Traffic (minutes)
 International Incoming
                               121,832,000     146,945,828      157,836,403     113,692,918        85,672,270
 Traffic (minutes)
 Traffic to Mobile Networks
                               230,000,000     209,944,354      163,324,095     150,000,000       124,378,826
 Payphones                           9,964            9,978           8,915            7,232            5,045

Finally, it can be noticed that the incoming and outgoing international traffic has been
rising steadily up to 2005/2006, afterward the international traffic started and continued to
decline during the years under review. It is not expectable that international
communication to and from Kenya are decreasing, instead this phenomenon is clearly a
consequence of the introduction of VoIP services. The gap between the old an actual
international traffic can be used to have a lower bound estimation of the volume in Kenya
of the VoIP phenomenon.

Community payphone services (including also the mobile ones) have continued to provide
alternative payphone services to the public. However, as shown in Figure 6, the number of
community payphones declined by 33.8% during the review period to stand at almost
20,000 down from almost 30,000 the previous year. This fact can be attributed mostly to
the influence of mobile telephony on the people; even more people own a personal mobile
phone and have a personal subscription, this is due partially to the availability of more
affordable handsets, to the lower calling charges, to the increased network coverage, but
also to the increasing number of persons amenable to renunciations in change of a mobile

Similarly, conventional payphones have continued to decline over the years. By the end of
the 2006/07 financial year, the number of payphones in Kenya stood at around 5,000
compared to the 7,232 in June 2006. The decline can be attributed mainly to the same
factors cited in relation to community payphones. In addition, vandalism and obsolescence
of technology rendered most of the payphones non-operational, forcing Telkom Kenya to
phase them out.

                                 Figure 6: Payphones in Kenya

Mobile Network
In line with the global and especially African’s trends, the mobile network in Kenya
continued to experience tremendous growth rate during the period under review. For
example, as reflected in the following table, the number of mobile subscribers grew of a
43% in one year. In the same period, the number of SMS messages sent grew by 57%.

The mobile network continued to lead the telecommunications sector in subscriber growth,
accounting for 96% of the total telephone users in the country as shown in Figure 7.
However, looking at the current situation, it is supposable that almost the fixed-line users
are also mobile subscriber.

      PERIOD          2002/03         2003/04         2004/05          2005/06           2006/07
      Capacity          2,000,000        3,935,000       6,800,000          10,600,000    18,200,000
     Connections        1,590,286        2,546,157       4,611,970           6,484,791     9,304,818
        SMS                     -                -               -      201,445,683      315,557,601

                   Figure 7: Mobile vs. Fixed Networks Subscribers Market Share

By June 2007, cellular mobile subscribers were 30 times more than the fixed lines
subscribers, up from 20 times in the previous year. Figure 8 presents the fixed and mobile
growth trends over the last five years. Mobile overtaken fixed since 2001, in three years
after the introduction of competition in 1999.

                         Figure 8: Growth of fixed and mobile subscribers

The following table sums the comparison presented in this section through the current
volumes of fixed and mobile telephony in Kenya.

       PERIOD            2001/02     2002/03     2003/04        2004/05     2005/06      2006/07
  Fixed Telephony
                           490,000     508,000        508,000     513,820     516,993      505,103
  Connections              328,116     328,358        299,225     278,867     293,364      339,229
  Payphones                  9,264       9,964          9,978       8,915        7,232        5,045
  Mobile Telephony
                         1,500,000   2,000,000    3,935,000     6,800,000   10,600,000   18,200,000
  Connections              944,128   1,590,286    2,546,157     4,479,375    6,484,791    9,304,818
                              805         814          *2,955     *14,240     *29,888      *19,755
  (Including Comm. P.)

Lacks of current Kenyan mobile telephony market

From what we seen so far it could seems that everything is good in the current Kenyan
mobile telephony market and that this market can only become better if the third operators
will roll out in time. But currently there are not only lights, also many shadows, especially
from the perspective of the weakest part of the population. Here, we briefly point out some
lacks of the current Kenyan mobile telephony market, especially those which have
influence on weaker subscribers:
    – If the third licensed operator will be successful it will be difficult to enter in the
         current well established mobile telephony market. Number portability is not currently
         available; CCK declared that number portability will become a reality [9] (but it is not
         the first time it happens) with the opposition of the current operators.
    – The duopoly of Celtel and Safaricom creates a bad environment to have a real
         competition which leads to a decreasing of airtime prices. Prices per airtime minute
         started decreasing slowly only in the last years. But they are still high, on average
         0.30 USD/minute (per second billed) and 0.05 USD/SMS. For that reason lowest
         income group found clever ways to minimize costs like “beeping” or “flashing” but,
         as consequence, also the call setup is now charged from operators [16][17].
    – In Kenya consumers are subject to a sector specific tax of 10% on mobile usage
         that hits mostly the poor people making mobile communications less affordable.
         Moreover, a study of the GSM Association agues that above all taxes impact for the
         25% on the total cost of the services [10].
    – Handsets are still expensive (a “second hand” market is emerging).
    – Due to the lack of power supplies and the high Kenya's electricity tariffs recharge
         the battery of a mobile phone often becomes a hard task. People use shops with
         electricity, car batteries, solar panels and generators (still too expensive
         technologies for most rural communities in Kenya) to arrange their selves. For these
         reasons, in Kenya to charge a full battery costs on average 0.40 USD, but there are
         no standard costs [21]. Remember that more than a half of the Kenyan population
         lives with 1 USD/day per person or less, especially in rural areas. It goes a long way
         to explain why most people walk for miles to the nearest market centre, to charge
         their new mobile phones [22]. And what about own, maintain and top up the phone?

3.3 Examples of innovative services in Mobile Telephony

The success of mobile technology among the people and the intensification of the
competition between the two current Kenyan mobile operators leaded to the introduction of
a lot of useful and innovative services customized on the specific local marked, aimed to
catch the attention of the actual consumers or to reach the needs of new Kenyan
consumers. In the following we report a couple of these services as matter of example.

Sambaza (Safaricom)
Sambaza [16] means “share” in the local language
Swahili. It is a service offered by Safaricom, which allows
subscribers to share their credit to other Safaricom’s
users, allowing the choice on how much the subscriber is
willing to give. This has been boost for people who cannot
afford credit on a regular basis or who has logistic
difficulties on acquire airtime credit. Through the help of
friends and relatives this service might allow those people
to make use of the mobile phone even in places where
telephone boxes are few and far between. [18]
Sambaza launched in May 2005. In more details, the
Safaricom’s customers can send any amount between                       The Safaricom’s Sambaza
50 Kshs and 10,000 Kshs (i.e. between 0.80 and 160 USD approximately), by composing
and sending an SMS to Safaricom containing an initial code, airtime value that have to be
shared and the mobile number to top-up. The shared airtime credit will be available for a
validity period of some months, depending on the amount shared; afterward it expires.

One network (Celtel)

                                                             In 2006 Celtel introduced a new
                                                             service that the firm called One
                                                             Network: a free roaming service
                                                             across some neighboring countries
                                                             of Kenya.

                                                             In this way Celtel provided Africa's
                                                             first borderless mobile network in a
                                                             region where, traditionally, trading
                                                             and family relationships have
                                                             crossed national borders.

                                                             In    practical    terms,    Kenyan
                                                             subscribers will be able to travel to
                                                             each of the neighboring countries
                                                             and continue to use their phones
                                                             without changing the SIM card inside
                                                             the phone and while paying that
                                                             country's domestic rate rather than a
                                                             much higher roaming charge.

                                                             Celtel activates this service for free
                                                             for all her Prepaid and Postpaid
    Celtel’s advertisements use the One Network service
                                                             Kenyan customers.
   as attraction to grab consumers into the Celtel network
                 (Image courtesy of [15])

Thanks to this service Celtel’s subscribers can use the same phone number and SIM card
across Kenya, Tanzania, Uganda, DR Congo, Congo (Brazzaville), and Gabon. All
incoming calls are free. Outgoing calls and sent SMS are at local rates and automatically
charged in the home currency of the customer Prepaid traveling customers can also
recharge their phone with local airtime cards or with cards bought from the home Celtel
network in Kenya.

3.4 Examples of development opportunities through Mobile Phones

The diffusion of mobile telephony in the African countries and, indeed, in Kenya has
created opportunities of development where mobile phones have become tools mainly
aimed to facilitating communication, business or creating job opportunities. In this section
we briefly present some example, even if the possible and current applications are
manifold [21].

SMS services
In many cases the mean used are SMS, for the simplicity of the service they provide. We
report here some examples:

    – The unemployment rate in many African countries is escalating. The challenge is
      some do not even know where to seek for jobs especially low skilled jobs that are
      too expensive to advertise in mainstream media. Mobiles phones are nowadays
      used generally to search for jobs and in health and agriculture sector. In Kenya, an
      excellent initiative around this is the Open Knowledge Network’s ‘OKNBOP’ which
      targets those seeking casual jobs through the KaziSMS3 at an extra charge of 0.05
      USD (3 Kshs) per message [21].
    – Kenya Agricultural Commodity Exchange (KACE) launched SMS-based information
      service, SokoniSMS4 for farmers to receive market prices from markets in Kenya.
      The farmers are automatically charged of 0.11 USD (7 Kshs) per SMS [17].
    – The use of SMS is also being popularized in the health sector with some positive
      results. The Open Knowledge Network (OKN) has a number of pilot projects to
      deliver vital information to marginalized and poor communities in Kenya. The initial
      phase took place in Kibera (near Nairobi), home to one of the biggest slums in East
      Africa. The main objective of the project is to use SMS to send messages on
      HIV/AIDS5 prevention and control; provide tips to pregnant women; offer health
      management and nutritional advice. The subscribers are charged 0.11 USD/SMS
      (OKN, 2005). A free service is planned for community news in Kenya starting with a
      pilot project at Kibera. It will target a controlled group of 1000 Kibera residents
      through a Bulk SMS Push service. This model has been used successfully in India.
      The group will share phones and extend service coverage to at least 5,000 direct
      users. The service will focus on health and business tips; public service
      announcements for instance lost children and security alert [21].

We think that these services can be really valid opportunities, even if they have a cost that
seems in some cases inappropriate (as in the case of information regarding HIV/AIDS).

  “Kazi” in Kiswahili means “Job”.
  “Sokoni” in Kiswahili means “Market”.
  In the Kenyan slums official number (people who’ve done the test) are of 1 positive HIV/AIDS case in 5
persons, whereas the average in the whole country is of 1 on 10. However, estimations depict a significantly
worst situation.

From Payphones to Village Phones

Another opportunity of development pass through the connection of isolated rural
community which, before the mobile telephony introduction, were completely hopeless of
having phone connections (even if they could rely on satellite and especially radio

The Village Phone Grameen’s program
Especially in many rural areas of the Developing Countries, people can not afford the cost
of a mobile handset or of a mobile subscription. For that reason the Grameen Foundation
launched in Bangladesh a pioneering program of Village Phones. This program have then
been extended to other countries like, in Africa, Uganda and Rwanda [23]. Moreover it has
lead to a lot of “imitations” in other countries, like the Safaricom’s Simu ya Jamii in Kenya
(see the next subsection).
Village Phone brings affordable telecommunication access to the rural poor in a way that is
both sustainable and profitable. Through for-profit and non-profit partnerships, Village
Phone links the telecommunications sector with the microfinance sector to enable
microfinance clients to borrow the money needed to establish a Village Phone business in
their rural communities. These entrepreneurs, Village Phone Operators, operate their
businesses in rural villages where no telecommunications services previously existed; they
rent the use of the phone on a per-call basis providing both affordable telecommunications
access in their community while earning enough to repay their loan and raise their level of
income [23].
The Grameen Foundation serves as a catalyst and creates the linkage between the
telecommunications sector and the microfinance sector to enable microfinance clients to
borrow the money needed to purchase a “Village Phone business”, i.e. the equipment.
Further the Grameen Foundation simplified the start-up of this new Village Phones
furnishing the new entrepreneur of an ad-hoc developed equipment, including: a mobile
phone with earpiece, external booster antenna for areas without strong mobile signal
coverage, custom designed cables to connect the phone to the antenna and the
recharging equipment such as a automobile battery or a solar panel. To complete the
Village Phone Equipment for the microfinance client, a SIM card and prepaid airtime will
also be needed and can be purchased through regular outlets. Additional items such as
signage and marketing material may be produced by the microfinance institution.
To understand the impact of this initiative we report an example. When, in 2003, Grameen
Foundation and MTN Uganda established a joint venture company, MTN Village Phone, to
bring the Village Phone program to Uganda. In just three years, MTN Village Phone
established over 6,700 new businesses, growing at a rate of more than 150 businesses
per month [23].

The idea of Village Phones have then widely exploited to launch in many countries
commercial initiatives aimed to extend the connectivity to a wider group of customers and
to collect traffic/income also from those who cannot afford a mobile phone or a personal
subscription. One of this initiatives, in particular, regards Kenya and is called Simu ya

Simu ya Jamii (Safaricom)

Since most ordinary people can't afford
mobiles, instead they use the community
mobile service. Following the example of
the Village Phone program Safaricom
launched her new business: Simu Ya Jamii.

Simu ya Jamii, that means “phone of the
village” in Kiswahili, is a community-based
mobile telecommunication. Safaricom’ Simu
ya Jamii was re-launched in June 2007, with
higher quality handset and collaboration
with micro-credit institutions for help whom
wants to become a Simu ya Jamii vendor.

The Simu ya Jamii vendors are furnished of
a mobile payphone, pre-paid tariff, free
marketing and advertising support, free
kiosk painting and branding and support in
acquiring required licenses.

Simu ya Jamii users are able to make more
affordable calls at regulated rates charged
per unit second, providing affordable
communication services to Kenyans who
                                                                 A Simu ya Jamii point
may not have use of personal handsets or                near a fixed-line payphone in Nanyuki
do not top-up regularly.

3.5 Another development opportunity: mobile banking (the M-PESA system)

From here on, we focalise on a single innovative project of use of mobile telephony for
development that has seen his birth in Kenya and that we think could impact many other
Developing Countries in future.

The name of the project is M-PESA (“Pesa” means “money” in Swahili and the prefix “M-“
refers to the use of a mobile phone to facilitate banking transactions). It is the world’s first
cell-phone-based platform to realize simple banking services and cash-transfers,
nowadays become a business service of Safaricom [6][18][24][26].

Why mobile banking?
Access has traditionally been a problem with financial services in Developing Countries.
Estimations tell that 80% of people in least developed countries are unbanked. The term
unbanked refers to people who do not use simple banking services that the developed
world takes for granted, such as checking and savings. Barriers to conventional methods
of banking include lack of education, illiteracy, high fees, and proximity to banking facilities.
Further, even having access to banking services the fees levied by the major banks,
services are too expensive for most of the population. To transfer money people usually
have either to travel or to confide in traveling friends or relatives (e.g. give the cash to bus
drivers to delivers). Under such circumstances, moving cash is risky, expensive, and slow.
An alternative are postal and similar services that charge high percentage in commissions.

Lack of access to banking services hinders economic development. It gives the poor no
option other than the informal, cash economy, leaving them vulnerable to risks and without
a means to efficiently save or borrow money. Higher savings rates also make more capital
available for investment in development. Thus, the impact of such a technology could be
profound on poor families' ability to save for a house, plan for emergencies, or get a loan.
It gives an alternative to the microfinance which doesn’t reach so many persons like the
mobile network (nowadays there are more than 225 million mobile subscriber in Africa)
and often is more challenging for structure, organization and the cost of the small

M-PESA: general description
M-PESA is a system that allows to deposit, to withdraw and to transfer cash using cell-
phones. It was launched in the whole Kenya by Safaricom in 2007 and served more than
450,000 customers already as of October 2007. Nowadays the number of customer is still
growing beyond the million.

The account setup uses existing mobile technology: a customer selects from a short menu
on the cell-phone screen, which features options including "send money" and "withdraw
cash". The person receiving the transfer on his or her phone can visit an M-PESA agent or
participating gas stations or stores to pick up the money. M-PESA agents, spread in all the
country, are also instructed to get the deposited cash. The banking infrastructure is not
well developed in Kenya but there is a large network of air-time dealers, shops and kiosks
that can apply to become M-PESA agents. Nowadays there are over 1,600 M-PESA
Agents countrywide. The sending customer does not need to have a bank account, but
registers with Safaricom for an M-PESA account. Finally cash can be withdrawn also from
non Safaricom’s subscribers.

Every M-PESA customer has an associate M-PESA account, separated from his airtime
credit. Pooled M-PESA balances are held as a unique count in a Kenyan bank. All the
transitions are done through the simple SMS mean protected by a personal PIN-number,
both at the customer and at the agent side. The M-PESA system is simply accessible from
the menu of the common handsets, after the replacement of the old SIM card with an SIM
card with the M-PESA menu. Many M-PESA services are free, other are charged but with
relatively very small rates with respect to the bank commissions.

Many useful services are related to M-PESA. For example, family uses it to transfer money
between very long distance, in a country where it is really frequent that the economy of a
family depends from a single employed living far from home. M-PESA can be also used to
store money in a secure way, avoiding to carry cash during a move.

In 2004 Safaricom was awarded match funding by the UK’s Department for International
Development to develop services for extending the provision of micro-finance to the poor
in East Africa. The pilot of the M-PESA system started in 2005 funded a half by the
matched funding and another half by Vodafone (the holding company of Safaricom). The
pilot project partnered with the Commercial Bank of Africa and a micro-finance company,
Faulu (operating in Nairobi and in the rural neighbourhood), which provided local expertise
to design and test the micro-payment platform. After the success of the pilot and some
modification to fit M-PESA to the marked and to the legislative requirements, in 2007
Vodafone/Safaricom launched the M-PESA services in the whole Kenya.

Possible vulnerabilities
The M-PESA system is SMS-based. Every transaction, to be performed, requires the use
of a secret personal (either of the customer or of the agent) PIN number. Moreover, every
physical transaction regarding cash is regulated by the M-PESA agent (that is responsible
for the transaction) through the presentation of a regular National ID or Passport and is
performed. For these reasons the system is defined secure. Even if we don’t know if the
M-PESA SMS are encrypted through the specific M-PESA software on the M-PESA SIM
cards, we think that the system should be considered secure. It might be sensible of some
vulnerabilities (for example consequence of the SIM/handset steal and the analysis of –
eventually – stored SMS), but these operations needs expertise and, for example, it does
not seem less secure than the European Bancomat system.

M-PESA: details
The M-PESA services are available directly from the menu of the new M-PESA registered
Safaricom SIM cards. The services are easy to use and available both in English and in
Kiswahili language. All the details and operations for the different services are available
online in the Safaricom web pages [25].

The registration to M-PESA (and the SIM exchange) is free and the account is directly
manageable on the same SIM of the mobile subscription. With an M-PESA account it is
possible: to send money to a registered M-PESA customer (charged service) or to an
unregistered one (charged service), to withdraw cash from your M-PESA account (charged
service), to buy airtime for the personal phone or another phone (free service), to deposit
cash (free service), to view balance, to change the language, to change the personal PIN
code. Non M-PESA users can withdraw sent cash for free. All M-PESA tariffs are available
on the Safaricom web pages [25] and all the SMS used in the transaction are free.

Pros and cons
Finally, in this last part we try to analyze the effects, positive and negative, of a
revolutionary system like M-PESA. In particular we try to understand what role it can be
really cover for human development in Kenya.

However, we want to start from the pros that the deployment of this new service takes to
the launchers Safaricom and Vodafone. These pros give us an idea of the reasons which
motivated Vodafone in such an investment:
   – New subscriber can join the Safaricom network attracted by the utility of this
   – Effect on the affiliation of old Safaricom subscriber and M-PESA registered
   – The cache deposited in the M-PESA from customers does not accrue interests for
       them but the complete pool of deposited money is managed by Safaricom, which
       might earn from it or use it for investments.
   – Airtime can be easily and transparently bought using an M-PESA account.
   – Direct incomes from M-PESA services commissions.
   – This is the world’s first system to transfer money by cellphones and actually it is
       “limited” into the Kenya boundaries. However, it will also seek to become the
       platform of choice for the 500 million USD in remittances that are received annually
       in the country once it goes global - and Vodafone says it will. Globally, this
       technology probably will impact internally only in Developing Countries and not in
       the Developed ones, but the 268 billion USD of remittance money sent home by the

      191 million migrants in the world each year could start flowing this way, with a huge
      amount of commission’s incomes

From a development and customer prospective the pros following with the M-PESA
system are manifold:
   – Transfer of money is faster, cheaper, secure.
   – It extends in time the availability of banking services (some are dependents from
      the M-PESA agents, other are available 24h/day).
   – It creates opportunities for employment and new opportunity of business.
   – It creates a possible solution to the issue of the access of banking services by the
      unbanked, helping them in store their incomes.
   – It is relatively simple to use also for the uneducated people.
   – It efficiently overcomes some structural problems of the micro-credit organization.

Nevertheless, we individuate some cons or possible drawbacks of M-PESA, especially
with respect to the alternative of micro-credit institutions, even if it can be a development
opportunity in absence of these institutions. Here we list some possible cons of M-PESA:
   – It creates further dependencies (addiction) firstly in the mobile technology, second
       in Safaricom as mobile operator.
   – It enlarges the gap between poorer people who cannot afford the expense of a
       personal handset with a Safaricom SIM and who can afford them; thus, it can solve
       the problems of many unbanked but probably not of the majority (or the most
       needful) of them (might some kind of M-PESA account sharing be devised?).
   – To deposit cash is free but to withdraw cash is charged; further, the deposited
       amount does not accrue interests. Thus, M-PESA cannot be considered a way to
       save money; on the contrary it can be seen, at most, as a storage for rent.
   – With respect to the micro-credit organizations it avoid the face-to-face contact with
       the micro-credit agent, which is (with respect to the M-PESA agents) an
       economically skilled person ad often an advisor for families, employed and
   – In a development perspective, institutions like micro-credit companies usually reuse
       (invest) the deposited cash in local projects and for the local community, for
       example giving loans and so on. Surely, this is not the case of the M-PESA
       accounted capitals.
   – People lose the real contact with money and its worth.

In conclusion, the innovative M-PESA system offers some opportunities of development,
especially offering a simple, secure and relatively cheap way to transfer money or perform
payments. However, we argue that it cannot be considered a real banking service. It does
not help in saving money. It comes without expertise. It does not give loans to start new
activities and its incomes do not revert on the local communities. Furthermore, we think
that M-PESA is still out of reach for the majority (the weakest majority) of the Kenyan
people. For a real human development we state that probably micro-credit is still a better
solution, even if it comes with many structural problems.

4 Conclusions
In this work we have dealt with different aspects related with the introduction of new
technologies in Developing Countries. More in details, our analysis has been focused on
the diffusion of the mobile phone technology in Kenya taking into account the social impact
on the Kenyan cultures and traditions and the new opportunities of business, economic
growth and social development.

The mobile phone had a deep impact in every culture has been introduced, but the
consequences seem to be greater in the societies that are not yet “ready” to welcome it. In
Kenya we see that the mobile phone, as many consumer goods coming from the Western
Countries, represents a “status symbol” for the local people. The purchase of a mobile
phone moves up a man in the society scale because it means that the person is not poor.
Furthermore, it leads to a different way of comparing the western and the local culture.
More in details, the local culture is refused because it is seen as “poor” and “loser” and as
a consequence, the Kenyans are modifying their relationships between individuals, their
style of life and the use of their financial resources.

On the other hand, such a technology appears to be very promising to solve the
communication problem in a Country in which the fixed telephonic infrastructure misses.
Moreover the mobile phone seems to be a tool of democracy: the information can be
broadcast easily; the people can have access to real news not controlled by the
Government; new ideas or projects can be shared with all the population. Moreover, the
mobile phone leads to new opportunities of business and economic growth.

But the mobile phone is also a promising tool for the social development of the Kenya. The
Village Phone Grameen’s program effectively connects rural and urban areas by mobile
phone reducing drastically the costs of the service. On the other hand, the project M-PESA
overcomes the problem of the long distance payment and the storing of the money. But
such a project presents many disadvantages: the withdraw cash is charged, the money
are not re-invested in local projects, people lose contact with money.

But, what is the discriminator between a “good” and a “bad” projects of social development
based on the ICT? Why do some projects cause more damage than benefit? First of all,
every project mainly based on economic growth seems to fail. In such a case, the
differences between the social classes are increased, and the opportunities of
development are used exclusively by the stronger part of the society. However, even if
economic growth does not imply social development is a fundamental tool because it gives
the financial resources to health or education.

For the above mentioned reason every project should lead to economic growth. But it is
not enough. The projects could (could not) be planned and realized following the “western”
way, but local people have to be involved in the project, they have to be the main
characters of development. In such a way the real needs of the community are taken into
account, respecting the culture in which the new technology will be introduced.

In that work we have met a single aspect about the ICT in a Developing Country. Even if
we have considered just the introduction of the mobile phone the situation seems to be
quite messy. We have to remember that fact every time we want to help people in
Developing Countries. All the different facets of the problem have to be taken into account:
economic, social, cultural. On the other hand, such a difficulty to have a global view does

not have to paralyze us. Be optimistic. We really can improve the conditions of life in Poor
Countries; we can help the people to build their social development. The first sentence of
the “Millennium Goals” says that we are the first generation with the technical skills able to
solve the problems of all the Developing Countries. We know it is not easy but we must
believe it.

[1] UNPD report 2001. (

[2] Kenyan government imposes news blackout. – 3 January 2008.

[3] Louise Marsland. Kenyan bloggers keep world informed. – 4
    January 2008. (

[4] Corinne Ramey. SMS as Information Channel in Post Electrion Kenya. – 21 January 2008. (

[5] Blogs, SMS and the Kenyan Election. Internet & Democracy.

[6] Matthew Clark. Unserved By Banks, Poor Kenyans Now Just Use a Cellphone. The
    Christian Science Monitor - - October 12, 2007.

[7] United Nations Conference on Trade and Development. INFORMATION ECONOMY
    REPORT 2007-2008, Chapter 6: Science and technology for development: the new
    paradigm of ICT. UNITED NATIONS, New York and Geneva, 2007.

[8] Cyrille Momo. Wireless in Africa: Insights into Mobile Markets. IT Professional, vol. 7,
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