The Kenyan government has said that two Indian telecommunications firms had shown interest in bidding for the second national telecom operator (SNO) licence.

The government said that MTNL and the Bharti group’s bids had qualified, along with five other qualified bids from, including South Africa’s until recent monopoly Telkom, France Telecom and Emirates Telecommunications Corp..

Telkom recently got competition when South Africa’s SNO, Neotel, launched at the end of last month. Neotel has a strong Indian backing through Tata Group’s (VSNL) shareholding in the venture.

Kenya’s SNO licence, like South Africa’s, suffered many delays. Kenya initially called for bids in 2003, but stopped the process when only one bidder showed interest.

It was hoped that the SNO would compete with state-owned monopoly Telkom Kenya to increase service levels while brining down prices.

The winner of the licence would be able to offer mobile services, an Internet backbone, international voice gateway, as well as national and international fixed line services.

Interest in Africa’s telecoms sector has grown rapidly over the last few years as governments look to reduce high prices by introducing competition to largely state-owned monopolies. Unfortunately, many governments fail to sell their shares, thereby reducing the incentive to introduce policies that would push down prices.

Earlier this week, Ethiopia announced that three Chinese firms had agreed to spend $1.5bn upgrading Ethiopia's telephone network between now and 2010.