[Already a bit older, but I just noticed that this article does not require a subscription, but is free on The Economist's web site.]

Middle East & Africa
Kenya

Going up or down?

Jun 7th 2007 | KISUMU AND NAIROBI
From The Economist print edition

As the world's group of rich countries discusses aid to Africa, a correspondent who lived in Kenya four decades ago looks glumly at it now—but sees glints of hope

ONE thing you notice on returning to Kenya after many years is that someone has done splendidly out of selling pea-green, bright red and banana-yellow paint. In village after village, however crummy the shops and muddily rutted the single street, you see a smartly painted green building and an even more garish red-and-yellow one, where you can buy scratch cards to top up your mobile phone either with Safaricom (green) or Celtel (yellow and red), the country's two rival firms.

They are potent symbols of the new Kenya. In 2000 some 300,000 people used mobile phones; now, in a country of 35m-plus, nearly 9m do. As a result, the lives of millions, especially the poor rural majority, have been sharply improved, because they can get round many of the obstacles posed by the decrepitude of the state-run infrastructure: of the 300,000-odd land-lines in the country, probably two-thirds are usually on the blink.

Poor Kenyan peasants wondering whether it is worth spending a day taking a bus to market to sell a sack of onions can find out the prices with just one call. Anyone with cash to transfer across the country can do so by text message, if they use Safaricom, the beefier of the two rivals. Proportionately, more people make mobile-phone calls in Nairobi, Kenya's capital, than they do in New York.

It is notable that both Safaricom and Celtel owe little to the Kenyan state or to international aid for their success—except for their licences and for the start-up use of the network owned by the battered state-run company—and a lot to Kenya's much-needed opening to foreign capital. Though (whisper it softly) the family of Daniel arap Moi, the much reviled former president, is said to have a secret stake in Safaricom, both companies are mainly foreign-owned: Celtel by a Kuwaiti company, MTC, which bought out its Sudanese founder, Mo Ibrahim; while Safaricom's largest shareholder is Britain's Vodafone.

A big reason for their success stems directly from the failure of the Kenyan state which, typically, proved unable to provide a decent telephone service of its own. ...

Story continues at: http://www.economist.com/world/africa/displaystory.cfm?story_id=9304146