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Reliance Communications, promoted by the Anil Dhirubhai Ambani Group (ADAG), is set to get the contract to become the second national operator (SNO) for the telecom services in Kenya. RCL, which had submitted the bid with Kenya's Triton Group and Swedtel of Sweden as technical partner, has applied for the SNO licence.

“The company has received the invitation from the Kenyan telecom authority to become the SNO and has applied for the licence on last Wednesday. The proposal is expected to be cleared by this month-end,” a source close to the company said. Reliance will compete for the land-line market with the state-run Telkom Kenya, the sole operator in the region. Indian telecommunication companies are eyeing Africa since it is an untapped market, analysts said.

The ADAG group will make an initial investment of around $150 million for the licence. It will make further investments on national long-distance voice and data as well as national cellular mobile services at a later stage. A Reliance Communications spokesperson declined to comment on the issue.

In January 2006, the Communication Commission, Kenya’s Telecom Regulator, had rejected the tender awarded to a consortium led by Dubai-based Vtel for the SNO and asked Reliance to submit a revised tender for the project. Vtel consortium had failed to apply for the licence as required under the tender rules by the expiry of the last deadline on January 24.

The group had been given three deadline extensions but failed to make an application each time. State-owned MTNL was the third bidder for the project. The SNO is expected to be operational in the second half of this year, a source close to the company said.

The SNO licensing is aimed at liberalising the telecommunication market in Kenya, and will cover local and national long-distance voice and data, national cellular mobile, international voice gateway, commercial VSAT, and Internet backbone services.

The shares of Reliance Communication on Monday traded at Rs 463, down Rs 3.5 at close on BSE.