Digicel, the Caribbean mobile firm controlled by businessman Denis O'Brien, is to invest €359 million ($450m) to build a modern GSM network in Honduras.
The company said it aims to increase mobile phone penetration in the country from 60 per cent to 80 per cent over the next five years.
Mr O'Brien said the Honduran market has high "growth potential" with a population of 7.5 million.
This investment coupled with an imminent launch in Panama would help Digicel secure its position in the Central American mobile market, he said.
"Our goal is to become a significant competitor in the region by delivering superior networks and a better service to our customers," he said.
Digicel operates in 31 markets world-wide and has more than 6.5 million customers. Its investments in the Caribbean and Central America now exceed €2.2 million ($2.8 billion), the company said.