Zain's Kenyan subsidiary has applied to buy a 3G license from the telecoms regulator, making it the second operator in the country, after Safaricom, to hold a 3G license. The company is expected to pay $25 million for the license.

"We shall be rolling out a 3G network in the first half of next year. The procurement process is already in place," said Zain Kenya CEO Rene Meza.

Zain Kenya also unveiled an offer that will see subscribers make free calls and SMS within the network based on the airtime top up. Through the campaign, customers will be able to call and SMS up to three Zain numbers for free for a period of seven days. The offer is open to only prepaid subscribers and will run until the end of the year.

In related news, plans by the regulator to reduce the 3G license fee to encourage new entrants has been opposed by Safaricom, who originally purchased their license back in 2007.

"From a fairness point of view, everybody should pay $25 million (Sh1.9 billion) for that licence. If they (other operators) are going to be given a special dispensation, then I believe that dispensation should be applied to us as well," he told Capital Business.

Mr Joseph was reacting to remarks by his competitor Zain Kenya's Rene Meza who had expressed confidence that the regulator would lower the licensing fee for 3G services to enable them penetrate the market.

Mr Meza had told reporters that the Sh1.9 billion as spectrum cost was high and had delayed their plans to introduce the technology in the market.

"The $25 million does not make business sense for three of the mobile operators in the market today. After discussions with the CCK, we concluded that the spectrum costs will be revised downwards to allow the operators to launch the services in the market," he said then.

Based on figures from the Mobile World analysts, Safaricom had 13.8 million subscribers at the end of June, compared to 2.4 million for Zain.