Econet Wireless to spend $450 mn for GSM in Kenya

Econet Wireless International (EWI), in which Essar Communications Holdings Ltd (ECHL) holds a 49 per cent stake, will invest $450 million (Rs 1,600 crore) to rollout telecom services in Kenya.

EWI is introducing its GSM services in Kenya through its subsidiary Econet Wireless Kenya.

"The investment will be made over a period of 18 months, of which $275 million will be raised through debt and the remaining $175 million through equity. Essar Group is also actively taking part in the process," a source said.

Essar will provide 49 per cent, $85.75 million, of the total equity that EWI is planning to raise. ECHL acquired 49 per cent in EWI in January this year, as a part of its plans to expand into the Kenyan market. When contacted, the Essar group spokesperson declined to comment.

Econet Wireless Kenya is expecting to bag over 2 million customers by the end of the first year of operations.

The investment of $450 million is being made to rollout services in Kenya for which the company had received regulatory approvals last year. According to the approvals, the company has to commence operations by June 2008.

EWI's investment reflects the growing tendency of Indian companies to expand operations beyond the country's shores.

State-owned Mahanagar Telecom Nigam Ltd (MTNL) is also considering launching mobile services in Kenya. The company is also close to acquiring SunTel, a Sri Lanka-based telecom operator to expand services into the country.

The Ruias-owned Essar Group, which already has a presence in the Indian telecom sector with Vodafone-Essar and BPL Mumbai, is also planning to introduce its own mobile brand in the Asian markets.

The company is also planning to roll out its mobile outlets in Sri Lanka and Bangladesh.

Tata Communications, with operations in the US, Singapore and Sri Lanka, and Bharti Airtel, with operations in the US and Sri Lanka, are among other Indian companies that have made overseas forays.