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Communications is one of the fastest-growing sectors in east Africa's second-biggest economy, with seven mobile players fighting for market share, forcing tariffs lower.
Like other African countries, mobile phone use has surged in Tanzania over the past decade, helped by cheaper smartphones, with mobile phone subscribers rising by 25 percent in 2015 to 39.8 million, according to the telecom industry regulator.
The government plans to recapitalise cash-strapped Tanzania Telecommunications Corp (TTCL), which provides mobile voice, data and fixed-line services, the president's office said.
President John Magufuli appointed Waziri Kindamba as the new acting chief executive after completion of the deal, it added.
TTCL, established in 1993, is the largest fixed line telecommunications company in Tanzania, but has a tiny share of the country's mobile phone market.
TTCL, which also manages and operates the government's national fibre optic cable, competes with Vodacom Tanzania, part of South Africa's Vodacom Group , Tigo Tanzania, part of Sweden's Millicom International Cellular and Halotel, majority-owned by Vietnam-based operator Viettel.
The president's office did not say how much Tanzania had paid for the holding, but government officials said last year the deal was worth around $7 million.
(Reporting by Fumbuka Ng'wanakilala; Editing by Duncan Miriri and Alexander Smith)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)