Celcom Malaysia said today its German partner Deutsche Telekom has filed for arbitration in a row over its planned merger with dominant fixed-line operator Telekom Malaysia.

DeTe Asia, a unit of Deutsche Telekom, holds around eight percent of shares in Celcom, the country's second biggest mobile phone operator.

Under the deal, Telekom is to buy out all other Celcom investors at RM2.75 a share but Deutsche Telekom, which bought the shares in 1996 at nine ringgit each, has been holding out for higher price.