An Analysis of the Kenyan Mobile Phone Market Essay

The stage is olibanum set for fierce competition among Mobile service providers in Kenya with accomplishable positive benefits for the millions of bustling subscribers in the country. . 2 Technology According to Laudon(2006292), mobile phones enable millions of people to communicate and access the internet . where conventional remember and internet services are expensive or unavailable. It is not surprising then that in a country such as Kenya with poor or little infrastructure in the form of glacial telephone lines, developed transport systems and computer facilities that a large voice of the people has resorted to using mobile phones to communicate , do business and prove their lives. According to Menguy, T (2007), in 1990, only 48. % of long distance calls and 53. 7% of domestic calls were being completed successfully using a primed(p) line. State owned fixed line operator Telkom Kenya has been regarded as a low performer with no competition. Laudon (2006292) highlights t hat the global standard for cellular service is GSM (Global System for Mobile Communications) which is also currently being apply by the Safaricom and Celtel networks. Using the GSM band users are able to retain the said(prenominal) number while being able to roam across field of study borders to nearby countries such as Uganda and Tanzania (BBC News as reported by Karobia, C,).Although the benefits and features of smart phones are widely known and used by the westerly world underdeveloped companies such as Kenya as still acquire used to the idea of having a phone that does nearly everything for them. Safaricom is only introducing 3G and exposure calling including other value adding services to Kenyans next year (Arunga, J and Kahora, B (200712)) which undoubtedly will only enhance the lives of Kenyans. 1. 3 contradictory Trade PolicyDuring the 1980s until 1990s, Kenyas poor relations with donors resulted in heavy domestic borrowing and higher interest rates which resulted i n poor economic growth. According to Wagacha, M, (200812) trade policies in Kenya underwent reformation in 1990 which resulted in greater trade adequate to(p)ness (such as the CCKs finality to issue more mobile phone licences to companies). The Trade Openness top executive is an indication of the ability of country to trade and is calculated by adding imports and exports of social club and representing it as a fraction of GDP.Wagacha, M (200812) highlights that the trade openness force for Kenya was an average of 46. 4% during 1997 to 2003 . The higher the trade openness the more open the country is to trade and the higher the growth. A country such as Uganda had an openness index of 26. 7 which indicates that Kenya has correct trade policies and a better chance of growth as compared to Uganda. In addition to this Apoteker, T and Crozet, E (20037) argue that better trade openness results in Innovation and economical production in a smaller number of goods and allows Kenya. to compete internationally. great variety of goods available to consumers thus increasing the consumer Surplus and satisfying the consumers involve of difference. The Adoption of sound policies to make sure the country is beautiful to investors. Capital flows throne enhance domestic enthronisation rates. From capital-rich to capital-poor countries, they can make better the rate of capital accumulation in the latter. According to Arunga, J and Kahora, B (20077) prior to 1998 all telecommunications in Kenya was owned and controlled by the present owned company Kenya Posts and Telecommunications (KP& angstromC).Wagacha, M (200816) highlights that more than 200 transnational corporations are operating in Kenya successfully, in many industries not bound just to the mobile phone sector. However trade reforms and administrational depravity have always influenced investment from foreign companies. Foreign Direct enthronization (FDI) may be regarded as the commitment by developed c ountries to urge the access of new technologies, markets, products, process and skills and most importantly funds to the developing or emerging country to improve and strengthen the economic information of the developing country such as Kenya.In1999 the Kenyan government canonical the new act proposed by the Communication Commission of Kenya(CCK) which made KP&C redundant with the intention of opening up the industry to allure competition from foreign and local service providers. The New Partnership for Africas Development (NEPAD) as cited by Van Vuuren, H (20021) also describes confidential capital flows to Africa, as an essential component of a sustainable long-term approach to filling the resource gap. However bribery and corruption in the Kenyan government and the governments dissonance in the mobile phone industry is well known.In 2005 Econet Wireless paying US$ 15 m for phone network licence which jibe to Arunga, J and Kahora, B (20077) was illegally cancelled by th e Kenyan attend of Information and Communications. The same minister was also accused of illegally cancelling a tendering process for a second fixed line operator and is maintain to have a vested interest in monopolised Telkom Kenya. The Competition Commission of Kenya (CCk) which was form in the first place to invite foreign and local investment in the mobile industry has since been dissolved due to governmental interference in a highly political industry.Today nearly deoxycytidine monophosphates of companies are still waiting for their licences to be issued which now rests with government which is trying to regulate the industry with a political agenda which is replication productive to stimulating sustainable long term growth to expurgate poverty (Wagacha, 2008). 1. 4 Economy Table 1 below shows almost key statistics on Kenya. According to the information presented in the table it can be seen that Kenya has an average population of 34. 7million people and 52% of the Kenyan population is below the poverty line. Table 1 Key Statistics for Kenya