Editor’s Note: March kicks off with elections in Kenya on the 4th. Starting with this article, we will be shining a spotlight on this East African country throughout the month. Over the next few weeks, we will delve into Kenya’s technology, youth and agriculture. 

Kenyan elections are here. The debate over jobs, wealth and the basic needs of Kenyans is back. Watching the debates (both by politicians and social media) tells me two things: (1) arguments over jobs and wealth creation have not shifted much from the last election and (2) basic needs, in the eyes of a growing few, include access to cheap mobile (and internet) services. The latter gives insight into the changing nature of Kenya’s mobile network and the potential of mobile phones for the entire continent.

A woman inside an Mpesa Shop Kenya, Africa

An Mpesa Shop in Kenya. Photo credit: Flickr

Estimates on the number of people who own mobile phones in Africa go as high as 750 million. With more than 29 million mobile phones, Kenya accounts for about four percent of the total number of devices on the continent. The rapid proliferation across the country is hard to ignore. If you were stuck in Nairobi airport during the day, you cannot avoid hearing a visitor to Kenya asking a local Kenyan (or in my case, a foreigner who could resemble a Kenyan) how to transfer money through M-Pesa.

The precipitous spread of mobile money transfer services in Kenya since Safaricom launched M-Pesa in 2007 has not been limited to my traveling counterparts and their business related friends. Rather, the mobile money transfer services have been at the center of the changing lifestyle of poor Kenyans. Magazines from The Economist to theBusiness Daily have highlighted people who are skipping a meal or choosing to walk instead of paying for bus fare so they can afford additional credit on their mobile phone.

[Read More: “Cashing in on Kenya’s Mobile Money Market] 

Mobile in Agriculture & Education

The success of mobile phones in transforming Kenyans’ lives, especially the poor, is not be limited to mobile money transfer services. Consider the effects of mobile phones on dairy farming in Kenya. iCow, a voice-based WAP enabled application, keeps farmers aware of breeding and feeding methods for their livestock. A local dairy farm owner can register each cow free of charge through the iCow portal and receive SMS about the breeding patterns of their livestock. After receiving such vital information, the farm owner can relay the information to the person managing the livestock.

A man using the icow App, Africa

A farmer registers on iCow

The Kenya Agricultural Commodity Exchange (KACE) has also been pushing a new mobile service that would enable farmers to receive up-to-date farm prices through their mobile phones, effectively strengthening the bargaining power of farmers at the market.

[Watch: Africa Straight Up for more on iCow]

And then there are companies like g.Maarifa, an interactive mobile education and training technology company. Its mobile platform provides a service that acts as a supplement or altogether replacement to traditional in-person training and is vastly more economical, both in terms of delivery cost and in limiting the disruption to people’s lives. “Not only does SMS allow our end users to access educational content when and where they want,” says g.Maarifa CEO and co-founder Evanna Hu, “but they no longer have to leave work or travel distances to learn.”

What does Kenya mean for the rest of Africa?

While Kenya’s iHub is the beacon of tech hubs in Africa, the recent launch of a new technology hub in Johannesburg shows that the buzz is more than just talk. While mobile usage is ubiquitous in South Africa, the expansion of its use beyond phone calls, text messages and e-mail to phone services has been very limited. South Africa has both entrepreneurs and a sizable poor population that could benefit from similar ideas launched in Kenya.

In Uganda, mobile phones are transforming transportation and education. Paying the daily fare on the local Kamunye (Uganda’s shared taxis) can be done via mobile phone. In education, the CU@SCHOOL pilot project, launched by SNV Netherlands Development Organisation in Uganda in collaboration with Makerere University Department for Computer and Information Technology, uses mobile phones to monitor teacher and student attendance in 100 primary schools on a weekly basis. The program has great potential in a market where about 33 percent of the population has a mobile phone and an almost similar percentage (27 percent) of Ugandan children are not in school at any given moment, despite free universal education. Similar pilot programs are being considered in Tanzania and Kenya.

In the health sector, mobile phones are becoming the easiest way to connect communities to ministries of health and hospitals kilometers away. In Mozambique, health officials are debating the use of mobile phones to provide health education to its dispersed populations outside Maputo. The excitement for such mobile programs stems from the lack of success (or reach) by on-foot educators in villages far from major urban areas.

A digital map of Tech hubs in africa by bongohive, Africa

A digital map of African Tech Hubs by BongoHive.

What does this mean for private investors?

While Africa may boast of about 750 million mobile phones, its mobile phone usage is not necessarily equally distributed. In particular, parts of eastern and southern Africa are starving for expansion of mobile usage. In Kenya and the Sudan, mobile phone usage is above 55 percent. In Tanzania and Uganda, it is between 45 and 50 percent. However, mobile phone usage is between 25 and 30 percent in Mozambique, the Democratic Republic of the Congo, and Burundi. In Ethiopia, it is between 10 and 15 percent. These numbers are a far cry from the more than 125 percent penetration rate in South Africa.

Such deficits in mobile usage and (here we should add) internet usage in the region are big opportunities for investment, particularly by private equity firms. Recently, Helios Investment Partners and Africa Infrastructure Investment Managers have expressed joint interest in a Kenyan tower management firm that they can expand into Tanzania and Uganda. This expressed interest underscores the changing landscape of African telecom.

Various Africa Telecom companies.

Africa Telecoms

In Ethiopia and Burundi, the governments are working to expand mobile usage, further opening potential of mobile related investments in each country. The Dutch company BelCash, for example, has been working steadily to partner with banks to provide easier access to bank accounts beyond the normal trip to the brick and mortar facility.

In Kenya, Wananchi Group Holdings recently raised $57.5 million in growth capital. Wananchi, which already provides PayTv, broadband internet and VoIP services, is currently using the new capital to finance the company’s fiber optic infrastructure. It is also eyeing the launch of its direct-to-home (DTH) satellite PayTV in the East Africa region, including countries such as Kenya, Ethiopia, Uganda, and Tanzania.

The boom in investment in mobile services, however, is only at its infant stage. With other markets gradually privatizing and opening up, the potential market size and related investment opportunities are hard to count. One challenge within these markets is a lack of local knowledge regarding the mass mobile services market.

“I’ll talk to investors who say ‘you should focus on these cheap tablets coming out of India’ or wherever,” says g.Maarifa’s CFO and co-Founder Andrew Leventhal, “to me that simply demonstrates a profound misunderstanding of what the average African consumer wants.”

If Kenya is any indicator, addressing expanding consumer needs will more determine the money to be made than simply banking on a growing market.