Essar Global to invest $500 million in Kenya’s mobile market (Kenya)Kenya’s Telecommunication market is calling in stiff competition as the latest entrant in the market proclaimed their plans to make the biggest investment in the industry in recent years. India’s Essar Global Ltd. will invest $500 million over two years in Kenya’s newest mobile phone service operator, Econet Wireless Kenya Ltd., to set up a network, among other things, said S. Srinivasa, the East Africa director for the group. Econet Wireless Kenya Ltd. Chief Executive Michael Foley said the investment will also pay for licenses for other telecommunications services and the establishment of a wireless broadband service. Mobile phone network would be running by the end of November, Foley added. 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). Essar’s proposed investment surpasses that of the semiprivate Telkom Kenya, which is a France Telecom-led consortium owned with the Kenyan government. According to the company’s executives, earlier Telkom Kenya will invest 19 billion shillings over three years to set up a new mobile phone network, upgrade its other telecommunications services and expand its business. Srinivasa said Essar’s investment in a mobile phone operator is the first major investment it is making in sub-Saharan Africa. He said Essar will be searching for more opportunities such as negotiating to buy half of the Kenya Petroleum Refineries Ltd., which refines crude oil for Kenya, Uganda and other countries in eastern Africa. Foley also 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.
