UAE's leading telecom company Etisalat could resurrect talks to sell its Sudanese telecom arm Canar to Kuwait's Zain, as both sides remain keen on a deal despite a breakdown in negotiations earlier this year, a source close to the matter said.

Zain Sudan is the African country's No 1 mobile company. Buying Canar - the top fixed-line carrier - would be in line with Zain's broader strategy, as outlined by chief executive Scott Gegenheimer in October, of moving beyond mobile to provide bundled services to corporates and individuals.

Etisalat took an impairment of 459 million dirhams ($125m) against Canar in 2012 and may be eager to sell what is a peripheral investment for the UAE firm.

Negotiations collapsed around the start of 2013, the source said, with Etisalat thought to have backed out because it believed other parties might consider buying Canar and hoped to get a better price for its subsidiary.

Zain remains interested in acquiring Canar, while Etisalat was still a likely seller, the source said.

Zain's 11.95 million subscribers gave it a 44 per cent share of Sudan's mobile market and $470 million of revenue in the nine months to September 30. Canar had 316,770 subscribers as of March 31.

Etisalat does not provide financial information on Canar, but its consortium paid 45 million euros for Sudan's second fixed-line licence in 2004 and the UAE firm later paid around $276 million to up its stake to 89 per cent from 37 per cent.

This was part of Etisalat's rapid expansion last decade as it sought to offset the loss of its domestic monopoly, but few of its estimated $12.6 billion of foreign investments have paid off and in recent years it withdrew from India and sold most of its stake in Indonesia's PT XL Axiata.

In November, Etisalat agreed to buy a controlling stake in Maroc Telecom for $5.7 billion, but analysts see little point in the UAE firm retaining interests in minor players such as Canar, especially after the Sudanese pound fell by about half against the dollar following South Sudan's succession in 2011.-Reuters