Bharti Airtel in talks to acquire smaller rival Telkom Kenya: Report

India's Bharti Airtel is in talks to buy Telkom Kenya, the East African nation's smallest telecoms operator, to create a stronger challenger to market leader Safaricom, three industry sources told Reuters on Monday.

London-based Helios Investment, which owns a 60 percent stake in Telkom, is looking to partly cash out of the investment which it entered in 2015, the sources said.

Airtel, currently Kenya's second-biggest telecoms operator, declined to comment. Number three Telkom was not immediately available to comment.

The move comes after the two companies held merger talks last year, only for them to abandon the plan. Telkom made the approach that time.

"Airtel is in the driving seat. They are leading the talks. Helios is partially cashing out," said one of the sources.

The deal is expected to be completed by the end of this quarter, the sources said.

The sector regulator Communications Authority of Kenya said it was yet to be formally notified by the two operators of the latest attempt at a deal.