State-owned communications giant Telekom Malaysia's desire to acquire a stake in mobile phone operator Technology Resources Industries (TRI) is a wise corporate strategy but will hurt consumers, analysts believe.

Analysts said Telekom's interest in the country's second-largest mobile operator would help it move from its fixed line core business to the growing mobile phone industry.

"Why not? Acquiring a stake will provide Telekom a footing in the expanding cellular industry," Sani Hamid, a consultant with Singapore-based Wan Research and Consulting, told AFP .

"In the near future, cellular phones will outbeat fixed lines. For future growth, there is business potential in the mobile cellular phones."

Telekom's interest in TRI comes as the company's major share holder, tycoon Tajudin Ramli, continues to strugle to repay RM130.4 million in bad debts to the state asset manager.

Tajudin, a protege of former finance minister Daim Zainuddin, pledged 17 percent of TRI, 45 percent in Naluri and 80 percent of Promet (Langkawi), an unlisted property firm, to secure his debts.

Telekom is eyeing TRI's shares and had offered Danaharta RM2.40 ringgit a share but Tajudin has dismissed the offer, saying the proposal was 10 times too low.

Consumers to suffer

Nizam Idris, regional economist with Singapore-based IDEA Global told AFP that consumers would suffer if Telekom acquired Tajudin's shares.

"It will further strengthen Telekom's position in the communications industry. It will make Telekom big and kill off competition," he said.

"I think in terms of business, it will be a good strategy for Telekom but not for consumers."

The New Straits Times newspaper Saturday quoted an official as saying that Telekom "might embark on the acquisition of Tajudin's shares in TRI held by Danaharta in May through a deal expected to be satisfied in cash and bonds".

Telekom's attempt to pick up Tajudin's TRI shares is greeted by Malaysia's number one mobile phone company Maxis Communications reported plan to hold an initial public offering (IPO) also in May.

Fund raising

Company officials were silent when contacted to confirm market talk. "No comments," one official told AFP when asked about the IPO issue.

"If Maxis was to go for an IPO, it is probably to raise funds for expansion. But then they will be small compared to Telecom even after the IPO," Nizam said.

Maxis, the only unlisted telecommunications firm among Malaysia's five cellular network operators, is 70 percent owned by Usaha Tegas, the investment firm of tycoon Ananda Krishnan, who built the world's tallest buildings, Kuala Lumpur's Petronas Twin Towers.