Bharti Airtel on Friday said its unit, Airtel Networks Kenya Ltd, has agreed to merge with Telkom Kenya Ltd, the East African nation's smallest telecom operator.

Last month, three industry sources had told Reuters that Bharti Airtel was in talks to buy Telkom Kenya, to create a stronger challenger to market leader Safaricom.

The companies will combine their respective mobile, enterprise and carrier services businesses in Kenya to operate as Airtel-Telkom, Airtel said, without revealing further details.