Tanzania to buy back Bharti Airtel's stake in state telecom firm

DAR ES SALAAM (Reuters) - Tanzania's government is set to start talks to buy back a stake in a state-run telecoms company from the local subsidiary of India's Bharti Airtel, gaining full ownership of the telecoms provider, the president's office said on Friday.

It did not say why the government would buy back the 35 percent stake in Tanzania Telecommunications Corp (TTCL) from the local unit of India's largest mobile network operator.

But the transaction will allow the east African country to lift its 65 percent stake in TTCL and then seek new investors for the company, which the government said would be in charge of managing the country's national fibre optic network.

President Jakaya Kikwete discussed the deal with Bharti Airtel Chairman, Sunil Bharti Mittal during a meeting in Dar es Salaam on Thursday, the statement said.

Communications is the fastest-growing sector in east Africa's second-biggest economy, with seven players in the local mobile telecoms industry fighting for market share, forcing tariffs lower. The country had 25.9 million fixed line and mobile phone subscribers as of September 2012, according to the latest industry data.

Bharti Airtel Tanzania Ltd is the second-largest mobile phone operator in the country after Vodacom Tanzania, part of South Africa's Vodacom Group.

(Reporting by Fumbuka Ng'wanakilala; Editing by George Obulutsa and Clelia Oziel)