(Associated Press via NewsEdge) Competition in Kenya's telecommunications industry is heating up as the latest entrant in the market announced plans to make the biggest investment in the industry in recent years.
India's Essar Global will invest $500 million over two years in Kenya's newest mobile phone service operator, Econet Wireless Kenya, to set up a network, among other things, said S. Srinivasa, the East Africa director for the group.
Econet Wireless Kenya CEO Michael Foley said the investment will also pay for licenses for other telecommunications services and the establishment of a wireless broadband service. Foley said the mobile phone network would be running by the end of November.
Srinivasa said that Essar will make the investment because the company has confidence in the Kenyan economy, following a deal to end postelection violence earlier this year that killed more than 1,000 people. He said, 'Kenya is the gateway for Africa for Essar.'
According to the regional grouping the East African Community, Kenya has the highest number of mobile phone users in the region (7.3 million), followed by Tanzania (6.2 million) and Uganda (2.7 million). That is based on 2006 figures, which are the most recent comparative statistics.
Essar's proposed investment surpasses that of the semiprivate Telkom Kenya, which is a France Telecom-led consortium owned with the Kenyan government. In May, the company's executives said Telkom Kenya will invest 19 billion shillings ($307 million) over three years to set up a new mobile phone network, upgrade its other telecommunications services and expand its business.
There already are two established operators in Kenya, and Telkom Kenya is set to have its mobile phone service running next month.
Foley said that once its mobile phone business is running in Kenya, Essar plans to expand to Uganda and other countries in the eastern region and also to set up a call center to serve the region.
Through its subsidiary, Essar Communications Holdings, the group in December 2007 bought 49% of South Africa-based Econet Wireless International that in turn holds 70% of Econet Wireless Kenya.
The rest is shared by local investors.
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