DiGi Telecommunications today said it will spend up to RM200 million to boost its technological capabilities amid stiffer competition.

DiGi tied-up with Siemens Malaysia to implement new technology enabling it to introduce third generation (3G) mobile communications services over its 2.5G network.

"We will spend RM100 to RM200 million for our... network," said chief executive Tore Johnsen.

"This is called the 'Edge Technology.' This technology enables 3G type services to be delivered over 2.5G network by tripling the rate of data transfer."

Pressure from rivals

The new technology will be available in Kuala Lumpur and surrounding areas by year-end and expanded to rural areas next year, he added.

The move is part of efforts by DiGi, the country's third largest mobile phone operator, to keep up with its rivals after withdrawing last year from a race to bid for 3G licences.

The public listed company, which is 61 percent owned by Norwegian telecoms group Telenor, has said it would instead buy capacity from 3G network operators and use its investment to develop 3G services.

But DiGi is facing increasing pressure after both its rivals, Maxis and Celcom which have been awarded 3G licences, moved to expand their market by merging with smaller firms.

New subscribers

Top operator Maxis is tying up with TimeCel which is expected to raise its market share to 42 percent. Celcom is merging with TMCellular, a unit of state-owned Telekom Malaysia, to gain a 38 percent share.

DiGi, which is strong in the prepaid segment of the market, enjoys an estimated 20 percent market share.

Johnsen said DiGi added 60,000 news subscribers each month during the first quarter this year and another 50,000 in April, and the trend was likely to continue in the coming months. AFP