* Mobile operator eyes 3 million subscribers by 2014
* Vivacell sees 1 million subscribers by end of 2011
* Aims to tap returnees to war-torn nation
By Aaron Maasho
NAIROBI, April 7 (Reuters) - South Sudanese telecoms firm Vivacell aims to triple its subscribers to 3 million by 2014 and sees a huge market for mobiles in the country, despite hefty operating costs, a company official said.
The region is set to become Africa's newest nation in July after it voted to secede earlier this year following two decades of war.
There are massive infrastructure deficits but South Sudan's fledgling mobile phone market has attracted a number of firms since a peace deal was signed in 2005.
"There's a huge potential for the market in South Sudan, we have 10 million possible customers," Khalil Nassar, Vivacell's chief technology officer, told Reuters late on Wednesday, referring to the country's estimated population.
"Our plan is to reach 3 million subscribers in three years time. We expect to hit a million by the end of this year."
Vivacell was launched in 2009 after Lebanon's Fattouch Investment Group purchased south Sudanese company NOW (Network of the World) in 2007.
The firm is now jointly owned by south Sudanese and other backers, Nassar said. In addition to Vivacell, Kuwait's Zain, South Africa's MTN and Sudatel's Sudani have already set up operations in the south.
WATER, ELECTRICITY AND 'MOBILE PHONES'
Nassar, who was speaking on the sidelines of an industry conference, said his company intends to capitalise on an influx of South Sudanese returning to the region following the peaceful referendum in January.
"As the country becomes a republic in July, most people will come back to their areas," he said. "The first things they will want are going to be water, electricity and then ways of communication."
Sudan's conflict killed 2 million people and displaced another 4 million as the country's Muslim north and mainly Christian south battled over differences in ideology, ethnicity and religion.
Hundreds of thousands are now expected to flock to their homeland this year, with over 264,000 returning by October last year, according to the United Nations.
The dearth in infrastructure makes it difficult and expensive for a company like Vivacell to operate in the country, and Nassar said employees were forced to use planes to reach sites.
"This country is coming from 30 years of conflict. There are no asphalted roads, so its not cost-effective," he said.
Officials say telecom companies operating in the south last week received a letter from the South Sudan government telling them to suspend work there until the administration publishes new rules for the sector.
Nassar said he was not aware of such an announcement, adding the company was focused on rural expansion in the impoverished state.
"The objective now is not to make profit, but to set up network and satisfy our customers," he said. (Editing by Duncan Miriri and Ben Hirschler)