New Delhi, June 22: Telekom Malaysia is working out a deal with Idea Cellular to roll out third generation (3G) mobile services in India when the policy is in place, sources said.

With 3G services holding huge potential for revenue generation for telecom companies, Telekom Malaysia is eager to have its share in the pie. 3G services are high-end value added offerings such as real-time transactions, video streaming, voice and data services.

However, at present, there is no clarity over the issue of allowing foreign players to bid for 3G licence and spectrum. While the department of telecom and the finance ministry are in favour of a global 3G auction, the Telecom Regulatory Authority of India wants to limit the auction to domestic mobile operators.

Cheap handset

Telekom Malaysia is also negotiating with B.K. Modi-owned Spice Mobiles to get mobile handsets from Spice that cost less than $15 for its international operations.

It is planning to use cheap mobile phones to increase its market share in developing countries such as Egypt and Bangladesh where mobile penetration is fairly low at around 18-20 per cent, analysts said. They added that the proposed agreement would not only help the Malaysian firm but also boost Spice Mobiles’ reach in countries where Telekom Malaysia has a presence.

Sources said Idea, Spice Communications and Telekom Malaysia are working on a deal, under which Idea would buy out B. K. Modi’s 40.8 per cent share in Spice Telecom for Rs 77 a share. This would be followed by an open offer to the 70,000 Spice shareholders, who hold 138 million shares (20 per cent) in Spice Communications, in line with Securities and Exchange Board of India guidelines.