The country's number two mobile phone operator Technology Resources Industries said Friday it hopes to agree a merger with Telekom Malaysia's cellular operations by the end of this month to to regain pole position in the local market.

New chairman Mohamad Munir Abdul Majid said the proposed merger of TRI's unit Celcom with Telekom's mobile arm TM Cellular was on track and was the fastest way to recoup market share lost to top operator Maxis Communications.

"In one fell swoop, we will have 46 percent of the market," he told reporters after a company meeting.

TRI hopes to complete the merger talks as soon as possible, he said, adding that it was possible an agreement could be sealed by end of the month.

State-owned Telekom is the single largest shareholder in TRI with a 31.25 percent stake.

"The goal therefore now, very clearly, is to reclinch pole position in the market and we are confident with our revitalised operations and more efficient workforce, Celcom can achieve that," he said.

Telekom was earlier embroiled in a bitter boardroom tussle with former TRI chairman Tajudin Ramli but won the fight last month following the ouster of Tajudin and three associates.

Mohamad Munir brushed aside market talk that Telekom would not make a general offer (GO) for the rest of the shares it did not own as part of the cellular merger plan.

"Telekom has made very clear its obligations... a GO will take place. We are interested to make sure a GO will take place," he said.

Changes according to valuation

The general offer price was expected at RM2.75 a share if the merger plan was finalised before Oct 29, he said, adding however that it could change based on valuations for both the cellular units.

TRI shares were traded late Friday at RM2.48.

If the merger plan was finalised in October, he said, the merger and general offer could be completed by January or February.

Analysts have hailed the proposed merger but said TRI shareholder Deutsche Telekom AG could throw a spanner in the works as it was believed to have veto rights.

They said there were concerns that the German telecoms giant, which bought the TRI shares in 1996 at nine ringgit each, may ask for a higher price than the RM2.75 offer price or decide to hold on to its stake.

Deutsche recently sold half its 16 percent stake in TRI to a local company widely believed to be associated with former TRI chairman Tajudin.

Analysts also said the prospect of a general offer raised new concerns over the amount of debt Telekom would have to take on. It has invested RM1.7 billion to buy the TRI stake and may need to pay another four billion for the rest. — AFP