In the developed world, the establishment of landline telephony was often a government-aided or government-run project, only to be spun off later into the private sector. Civilian cell-phone telephony, on the other hand, has never been anything other than a private-sector enterprise in the developed world. In the developing world, however, there has always been a danger that governments will restrict the potential utility of mobile telephony by making it their monopoly. The case of Kenya shows how that danger was sidestepped, and how a competitive industry was actually beneficial in expanding both reach and utility.
Initially, Kenyan telecommunications were the prerogative of the government, controlled first by Kenya Posts and Telecommunications Corporation (KP&TC) and later by its successor, Telkom Kenya. These bureaucracies were, by all accounts, bloated and inefficient; in an interview, a Telkom Kenya employeedescribes Telkom Kenya as a "cash cow" and talks about how it used to take up to five years for a customer to get a landline. Another report states that the quality of service was far below par: "The overall call completion rate for long-distance calls in 1991 was only 48.1%, suggesting (though not definitely confirming) that the degree of congestion remained similar to that of 1980. Our 1991 interviews with telecommunications users in Kenya also indicated that congestion of the long-distance network and other service quality problems continued to be a major concern for many."
With advent of mobile telephony, things changed. Despite its efforts, Telkom Kenya could not secure a monopoly on mobile phone networks. Today, it owns a 60% share in Safaricom, one of the two private telephone companies. The remaining 40% is owned by Vodafone. The other major company, Celtel, has a more pan-African presence. A World Bank table does an excellent job of summarizing the present Kenyan scenario in Information and Communications Technologies. It is interesting to note that there were 4 mobile subscribers per 1,000 people in the year 2000. Five years later that number had jumped to 135. Significantly, government expenditure of ICT has remained fixed at 2.8% of GDP in those five years, indicating that the growth has almost exclusively been fuelled by the private sector. The graph below compares cell-phone growth to landline growth during a similar period.
The benefits of Kenya's shift in ownership
1. Flexible and cost-efficient options: The competition between Safaricom and Celtel led to lower tariffs and flexible billing options. This can empower the public considerably. For instance, a community-based mobile network, called Simu ya Jamii, gives poor people a cheap and effective way to make calls; the least expensive scratch card available on the market is Ksh. 100 ($1.30), but Simu ya Jamii can be used for as little as Ksh. 20 ($0.26) per minute during peak hours and Ksh. 16 ($0.21) in off-peak hours. (This concept is described in more detail in a 2005 report by Catherine Nyaki Adeya.)
2. Telkom Kenya's bid for self-improvement: One report describes how Telkom Kenya began to shape up, retrenching excess employees, cutting down on corruption and fraud, looking for ways to be more cost-efficient and innovative. "The changes being seen in Telkom’s operations are being driven by the presence of competitors in the market for communications services and the freeing of Telkom’s managers to do what they feel is necessary to win new business," the report says. "The analysis of what has been wrong and the development of ideas to put things right have not needed government action or bureaucratic regulation – the self-interest of the managers and workforce of Telkom is being used to avoid shrinkage of the business as the other cell-phone operators invest and grow."
3. Synthesizing mobile phone technology with other technologies for innovative use:
The above video is one example of how the three primary factors of the Kenyan cell phone revolution -- ubiquity, cost-effectiveness and ease of use -- helped put the mobile phone at the center of user-driven business innovations. There are further examples in Kenya and other regions of Africa. Adeya's report describes the emergence of mobile banking in Kenya, a function further examined within the framework of this Wiki. For small business owners and vocational professionals like plumbers and electricians in particular, the mobile phone proved to be an effective way of getting more business. In earlier periods, it was risky to depend on a faulty, communal landline, and calls often went unanswered or unregistered. With a mobile phone, however, incoming calls cost nothing, and self-employed Kenyans could boost their business by paying a bare monthly minimum to retain the phone.
Organizations also use the spread of mobile telephony in Kenya to aid the objectives of development. Adeya's report describes how The Open Knowledge Network began a project in Kibera, one of East Africa's largest slums. "The main objective of the project is to use SMS to send messages on HIV/AIDS prevention and control; provide tips to pregnant women; offer health management and nutritional advice."
(Other information services also use SMSes to provide information; the health function of mobile telephony is also examined in this Wiki.)
A further innovative application of mobile telephony is DrumNet's work in Kenyan agriculture. DrumNet, a project of PRIDE AFRICA, eliminates the middleman and enables farmers to sell their produce directly to retailers. DrumNet links these two parties by providing information kiosks with a GSM mobile phone; farmers can thus reach and be reached by their retailers, and a computer at the kiosk also stores market information that a farmer can use. The Kenyan Agricultural Commodity Exchange launched a similar service, allowing farmers in the Safaricom network to sign up for SMS alerts on commodity prices and other relevant information.
Many of the cell phone's achievements in Kenya result from the efforts of earnest but scattered individuals or small groups. There has been no institutional or organizational shuttle that has gathered up these various threads and woven them into a larger, more cohesive picture. It is tempting to propose a central institution to perform this task; but one can also argue that market forces have driven progress effectively over the past few years, and that setting up a Telkom Kenya-type body could bring back institutional inefficiency and corruption. This argument can be debated further elsewhere.
There is no doubt, however, that the cell phone can spread still further into Kenya's rural reaches. The competitive ownership structure has driven rates down. Cell phone companies need to increase their geographic coverage. The radial pattern of cell phone ownership is seen in other countries as well. In India, for example, cell phone penetration is at its highest in the metropolitan areas, and drops gradually as one moves into the countryside. In the village heartland, mobile phones are still rare.
Problems are already arising regarding the misuse of cell phones, either in the form of breaches of privacy or a lack of security. A free market-oriented ownership structure also means that barriers to the acquisition of a cell phone are lower. In earlier times, Telkom Kenya took too long to vet the credentials of landline applicants. But today drug runners, gangsters and others can obtain cell phones easily for their own purposes. The market has yet to learn how to balance these two aspects of the altered ownership structure.
Finally, there is little monitoring and evaluation on the social impact of mobile telephony. Most information available today from Kenya is anecdotal,and there are few statistics, especially from the user's perspective, of cell phone use and its advantages. As a result, there have been no comprehensive studies of the large-scale efficacy and advantages of mobile telephony in Kenya. But they are essential to understand and modify the processes in use. For instance, how much has the use of KACE's SMS-based service helped farmers? Has it directly boosted their revenues? How many farmers use it, and how often? This kind of quantitative study can inform the creation of future campaigns and programs, pointing out potential pitfalls as well as successful formulae.