MOBILE PHONES BOOST KENYA'S SMALL BUSINESSES

Digital Content

The mobile phone has become the most essential work item for small businessman who, like so many others in the East African nation, makes a living from various different jobs at the same time.

Thanks to an explosion of growth in the mobile phone industry in Kenya over the past five years, handyman Alex Theuri says his plumbing-electrical business has grown by about 50 percent.

He also operates a community payphone via the mobile network and further cashes in on the boom by charging batteries for a fee. "Mobile phones have helped me very much," Theuri said.

"Sometimes I receive as many as five calls a day for different jobs. Were it not for mobile phones, jobs would have been very minimal. With the phone, I am well known."

Theuri is among thousands of Kenyans, many of them poor, who have taken advantage of the phenomenal mobile expansion to ease the way small businesses operate.

Painters and masons now advertise their numbers on trees by the roadsides in Nairobi. In the past, they would have sat outside hardware shops looking for work from people who have just bought nails, cement and other building supplies.

Vegetable vendors now make orders for supplies without leaving their stalls. They also avoid being swindled because they can use text messaging to check around for the best prices.

Back in June 1999, Kenya had only 15,000 mobile phone subscribers. But by the end of 2004, the country had 3.4 million subscribers, according to Kenya's telecommunications regulator, the Communications Commission of Kenya (CCK). That number is expected to grow to 4 million by mid-2005.

The boom has underpinned activity in the small business sector, which employs most workers in the nation of 32 million people which is east Africa's largest economy.

Last year, the sector created about 437,900 new jobs, according to the government's 2005 Economic Survey. Five other people that Theuri employs also benefit from his increased work.

Outside his small, wooden shop at the entrance of a Nairobi market, Theuri uses the phone to take work orders and call around shopping for goods instead of wasting time moving across the city as he used to do.

The community payphone -- known in local Swahili as "simu ya jamii" -- has helped bring telecommunications to those who cannot afford to own a handset. Businessmen also use it whenever they have to make calls and are tight on mobile phone credit.

"It is easier for them to use than their mobile phones. For example, someone might want to call for 20 shillings (about 15 pence), but nobody sells credit for 20 shillings," Theuri said.

There are still, however, many Kenyans who cannot afford to make calls via the mobile network.

Hopes the government may scrap a 10 percent tax on mobile phone airtime were dashed in Kenya's last budget.

"The (finance) minister's decision to uphold excise duty on airtime, although disappointing, is also a relief when compared to the increase in excise duties for cigarettes and beer," said Michael Joseph, chief executive of Safaricom.

Increased competition in the sector has been hampered by a delay of the emergence of a third mobile operator in the country, which would have helped push call rates lower.

Econet Wireless Kenya, a unit of South Africa-based Econet Wireless International, has been delayed from rolling out in the country by legal wrangling over its licence.

But Zachary Wazara, Econet's chief executive in charge of the Kenyan project, is counting on the project going ahead. "We are proceeding with building the network itself. I think some of the equipment has already landed in the country," he said.

The company says it has an operating licence. But a pending court case has kept CCK from issuing a numbering plan to Econet Wireless, as well as frequencies that would link its base stations.

More competition would be welcomed on the streets of Kenya. "The best technology that we have seen in Kenya recently is the mobile phone," Theuri said.

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