Mobile telephony in sub-Saharan Africa and other developing nations has been gaining momentum over the last decade. Kenya is one country where the benefits of mobile phones are evident. Following the liberalisation of the country’s telecommunication sector in 1998, the virtual monopoly that was enjoyed by the Kenya Posts and Telecommunications Corporation (KP & TC) came to an end a move that heralded in a new face of the communication sector as new entrants Safaricom and Kencell in 1999 and Yu in 2008 came into play to provide better services to the country. The telecommunication sector has been vibrant since then and the rapid developments have created new products and services, charting new paths for education, entertainment and business. At the same time, more commercial, social and professional opportunities have been created through these unique developments.
Compared to the 15,000 cellular phone subscribers in 2000, there are now more than 16 million people hooked up to this gadget in 2010. And now what was once regarded as a preserve for the high and mighty is a consumer product that is changing the livelihoods of young and old. This gadget that was previously used as a communication tool only has undergone a series of modification to become a diary, internet access point, alarm, watch, e-book reader and above all else a wallet, nay a bank, for most people.
Now, Nairobi has become the world’s capital of mobile phone money transfer with Safaricom’s M-Pesa challenging traditional banking and inviting competition from rivals who want a piece of the cake: Zain’s Zap, Essar’s YuCash, Kenya Commercial Bank’s Mobile Wallet, Nokia’s Nokia Money, CFC Stanbic’s Mzansi and MTN’s.
Safaricom’s introduction of the M-Pesa service in 2007 made it possible for thousands of the country’s unbanked population to make fund transfers through the system. This has not gone down well with the traditional banks.
With the banks feeling that the products by the phone operators do not adhere to the banking laws and comparing them to pyramid schemes that have fleeced thousands of Kenyans of millions of shillings, Zain’s Zap product was held in standoff before it was finally launched in February 2009. All this however lacked the valid arguments and m-banking has become the ultimate way of life for majority of Kenyans. The banking sector has little option but to partner with mobile phone service providers or risk becoming irrelevant to the people just like the defunct fixed telephone booths previously operated by the defunct KP & TC. Equity Bank and Kenya Commercial Bank has quickly fallen into line.
Mobile phones have stimulated economic activity and improved people’s lives by making up for bad roads and inadequate transport by enabling mobile banking services and by making it easier to share pricing and other data so that traders can earn more profit. This has been the motivation behind one of Kenya’s biggest mobile telephony success stories.
Farmers in rural areas that found it difficult to access market information the mobile phones have worked wonders in an age of global markets where farmers are forced to improve the quality of their yield and access markets within short time frames. The use of short text messages (SMS) has attracted a lot of interest from farmers because information can easily be accessed. Small scale farmers can now access information on weather and crops besides acquiring market price leading to better deals.
The existence of a variety of service providers for the many phone users in the country has led to lower cost of communication than it was when KP & TC was the sole player in the sector. Intensified price wars as the service providers fight to attain more customers has lowered the cost of communications and led to more reliable networks.
The entertainment world has not been left out either as many handsets come readily with FM radio. Today business deals are sealed with one single phone call that is made at the most convenient time, farmers are able to access information at the fastest times possible while the entertainment world is just interesting with the ever changing mobile phone technology.