India's Essar pours €336m in Kenya

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.

An Associated Press report further S. Srinivasa, the East Africa director for the group, saying India's Essar Global will invest €336 million (US$500 million) over two years in Kenya's newest mobile phone service operator, Econet Wireless Kenya, to set up a network, among other things,

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.

There already are two established operators in Kenya, and Telkom Kenya is set to have its mobile phone service running next month.