Essar Global Ltd plans to invest invest $500 million over two years in Kenya's newest mobile phone service operator, Econet Wireless Kenya, surpasing the $307-million proposed by the France Telecom - Kenyan government owned Telekom Kenya in May this year. This is the Esar Group's first major investment in the sub-Saharan region.

The Mumbai-based Essar Group owns a 49-per cent stake in Econet Wireless Kenya's parent, the South Africa-based Econet Wireless International, acquired in December 2007 through Essar Communications Holdings Ltd. Econet Wireless International owns a 70-per cent stake in Wireless Kenya Ltd.

According to S Srinivasa, director for the group's East Africa businesses, the Essar investment would be used for developing network infrastructure for wireles broadband services and the set up costs prior to roll out of services in the country, by end November, after the proposed launch of services in June were delayed due to post-election violence in the country.

This is not th fist delay to confront Econet, which was grted a licence in 2003 but was too embroild in shareholdetr disputes to commence services.

Essar plans to use the roll out of its mobile services in Kenya as a launching pad to expand in to other East African countries.

Michael Foley, CEO, Econet Wireless Kenya, says once its mobile phone business is operationalised in Kenya, Essar plans to enter Uganda and other countries and also set up a regional call centre for the entire region.

According to the latest data, with 7.3 million subscribers in 2006, Kenya has the highest mobile phone users in East African, followed by 6.2 million in Tanzania and 2.7 million in Uganda.

The African telecom market is attracting keen interest from telcom service providers, keen on gaining a foothold in Africa. The UK-based Vodafone Group had announced its decision to buy a 70-per cent stake in in swtate-owned landline and mobile operator Ghana Telecommunications Co. for $900 million last month.

South Africa's largest telecom firm in the region MTN Group Ltd was ken to acquire a local Verizon unit to expand its fixed-line and Internet activities. MTN had in recent months ben in talks with Bharti and Rekliance Communications for a consolidation.