* Managing director values NetOne at $500-$800 million
* Expects agreement on sale in second quarter of 2011
* Subscribers to increase to 2.5 million this year
By Alfonce Mbizwo
HARARE, March 9 (Reuters) - Zimbabwe's state-owned mobile operator NetOne is in talks with South Africa's MTN and other African mobile firms about selling a 49 percent stake, the company's managing director said on Wednesday.
NetOne is the smallest mobile operator by subscribers in Zimbabwe, lagging behind Econet Wireless and Telecel, a local unit of Egypt's Orascom Telecom.
Managing director Reward Kangai valued NetOne at between $500 and $800 million, in an interview with Reuters.
"We are in talks with MTN, among others, over the possibility of them taking 49 percent in NetOne," Kangai said on the sidelines of an investor conference in Harare. He did not disclose the other African operators.
No one at MTN was immediately available for comment.
"We expect an agreement during the second quarter of the year," Kangai said.
Kangai said he expected NetOne's subscriber base to increase to 2.5 million this year from 1.6 million in 2010.
He said the company was hindered by the country's telecommunications laws from selling more than 49 percent of its shares to a strategic investor.
Zimbabwe has a low mobile penetration rate, which makes it attractive for large mobile operators seeking to expand their footprint on the African continent.
Kangai said NetOne's turnover would double to $200 million in 2011 boosted by an increase in subscribers and a recovering economy.
The southern African country's economy has started to recover after a decade of contraction following the formation of a unity government between President Robert Mugabe and Prime Minister Morgan Tvangirai after disputed elections in 2008.
"It (low mobile penetration) presents an opportunity for the company to grow, which also presents business opportunity for the strategic partner," Kangai said. (Writing by MacDonald Dzirutwe, Editing by Gugulakhe Lourie and Erica Billingham)