Malaysia's smallest mobile operator DiGi.com Bhd has revived a bid to secure a high-speed third-generation (3G) service licence from the government, a report said Monday.

DiGi, which is 61 percent-owned by Norwegian telecoms group Telenor, withdrew from the race for a 3G licence two years ago and chose instead to upgrade its technology which allows 3G-type services to be delivered via its existing 2.5G network.

However, the mobile operator now faces increasing pressure after both its rivals , 3G licence-holders Maxis and Celcom, moved last year to expand their market share by merging with smaller firms.

Maxis tied up with TimeCel while Celcom merged with TMCellular, a unit of state-owned Telekom Malaysia. The two companies are expected to spend RM7.5 billion over the next decade to roll out 3G services.

Leader in pre-paid services

DiGi chief technical officer Jon Eddy was quoted by the New Straits Times as saying that the company was in preliminary talks with the Malaysia Communications and Multimedia Commission to secure a 3G licence.

"Even though DiGi did not submit a formal application for the licence in the past two years we have always been interested," Eddy said.

"We have relaunched our initiative to secure the licence in the past two months and we are now working closely with the water, energy and communications ministry."

DiGi, which is a market leader for pre-paid mobile services, enjoys an estimated 20 percent market share.

Malaysia's mobile phone penetration rate has reached more than 30 percent and the government hopes to speed up the process of reaching the official target of 38 percent by 2005 with 3G networks, which allow speedy access to data and video through the Internet.