Emirates Telecommunications Corp (Etisalat) said it had raised its stake in Tanzania's Zanzibar Telecom to 51 percent.

Etisalat bought an additional 17 percent of the African company better known as Zantel, the company said in a statement on the Abu Dhabi bourse Web site, without saying how much it paid.

Zantel, the smallest mobile phone operator in Tanzania, hopes to double its customer base to as many as 1 million users by year end, chief executive Noel Herrity said in May.

Tanzania, east Africa's largest country, has a population of around 39 million.

Etisalat's shares fell more than 4 percent on the news after a rise of more than 7 percent on Sunday, on speculation that company was preparing to open its shares to foreign investment.

"When the news had nothing to do with that, investors reacted by selling," says Mohammed Yasin, managing director at Shuaa Securities.

Etisalat's chairman said in June he expected the United Arab Emirates to amend a law to allow foreign ownership of its stock "within months".

Like other Gulf Arab telecom operators, Etisalat is hunting for foreign assets as it faces competition in its home market and Africa has figured prominently in its acquisition plans.

In April, Etisalat boosted its stake in loss-making operator Atlantique Telecom, which holds stakes in seven operators in Africa, to 70 percent.

Last month, the firm bought a 40 percent stake in a new Nigerian operator.

Etisalat also led a group that started Egypt's third mobile phone firm in May and has runs networks through affiliates in Saudi Arabia, Pakistan and Afghanistan. - Reuters