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Telekom Malaysia shares climb after UK Vodafone report

Telekom Malaysia Berhad, Southeast Asia's second-biggest phone company, rose the most in a month in Kuala Lumpur trading after a newspaper said Vodafone Group PLC may buy 25 percent of its mobile unit for US$3 billion.

Telekom shares climbed as much as 5 percent, the biggest gain since Oct. 1. Vodafone is the frontrunner among foreign operators and private-equity firms to buy the stake, the UK's Sunday Times reported, without saying where it got the information.

Telekom plans to spin off the mobile phone divisions from its fixed-line business to create a unit worth 28 billion ringgit (US$8.4 billion) to focus on overseas expansion. Selling a stake in the unit, TM International Sdn. Berhad, will fund an estimated US$3 billion of acquisitions in markets such as India and Vietnam, the Kuala Lumpur-based company said in September.

Any potential deal with Vodafone may not be completed until next year, the Sunday Times reported.

"As a matter of policy, we do not respond to news which is speculative," Telekom said in an e-mailed statement yesterday.

Bobby Leach, a Vodafone spokesman, declined to comment by telephone. Newbury, England-based Vodafone is the world's biggest mobile phone company by sales.

Telekom shares climbed 5 percent before rising 3 percent to 10.0 ringgit at the break yesterday, after rising to as high as 10.60 ringgit.

About 70 percent of Malaysia's 27 million people have mobile phones. Competition is intensifying as U Mobile Sdn prepares to start wireless services this year. Telekom has also lost customers to Maxis Communications Berhad and Digi.Com Berhad.
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