Africa Online, the continent's most broadly based internet service provider, has bought its main Kenyan rival, Net 2000, for $3.3m - the first of a string of planned acquisitions as the company seeks to become Africa's premier ISP.

Africa Online already operates in six sub-Saharan African countries, most recently moving into Swaziland, and is planning to double that number by the end of the year.

It has 13,500 active dial-up subscribers (compared with Net 2000's 3,400 registered users), and in Kenya 11,500 customers regularly use its E-touch product - a bureaux where customers can send mail and access the internet on a pay-per-use basis.

E-touch has also been launched in Tanzania and Ivory Coast, is to be relaunched in Ghana, and will soon move to Zimbabwe.

These heady ambitions have largely been made possible by African Lakes, a London-listed company with interests in the internet, information technology and the automotive industry.

In 1998, it invested $2.8m in Africa Online through convertible loans - giving it the right to not less than a 65 per cent stake in the company - and has since invested a further $10m.

'African Lakes is committed to addressing the needs of progressive Africa, and internet services are right at the forefront,' said Chris Foy, chief executive. 'This acquisition strengthens the leadership position of Africa Online significantly in sub-Saharan Africa.'

Ayisi Makatiani, chief executive of Africa Online, said: 'The year 2000 has started very well - and we expect to do a lot more of these kind of investments.'

E-touch is expected to see substantial growth, with a potential market of 18m-22m users in countries where Africa Online operates.

'The product allows us to use and build our brand name,' said Mr Makatiani. 'It is also a feel-good project because it offers universal access, which is sustainable because people pay for it.'

Africa Online is also looking to develop its e-commerce services: from Swaziland it is helping to sell glass carvings over the internet, in Kenya it has a project with Dorman coffee, and from Ivory Coast T-shirts are sold through an online boutique.