Mobile phone operator Maxis Communications today said it has awarded a multi-million-dollar contract to Swedish telecommunication giant Ericsson for deployment of its high-speed third-generation (3G) network infrastructure.

"I cannot disclose the value of the contract but it is worth millions of ringgit (dollars)," Maxis chief operating officer Edward Ying told a news conference.

Under the contract, Ericsson will operate the 3G network for 18 months before transferring it to Maxis, he said. The Malaysian company is scheduled to introduce 3G services in the second half of the year.

Ying said Maxis did not expect a large number of subscribers in the first year of operations but it would consider subsidising expensive 3G handsets to encourage business.

"When we launch 3G services, if the phone remains expensive, we might subsidise it," he said.

Second bidding

Maxis and state-owned Telekom Malaysia were awarded 3G licences in 2002. The two companies have said they expected to spend RM7.5 billion over the next decade to roll out 3G services from later this year.

Local reports said the government may open up a second round of bidding for two remaining 3G mobile phone licenses. Malaysia's smallest mobile operator DiGi.com Bhd. has already revived its bid to secure a 3G license.

Malaysia's mobile phone penetration rate has reached more than 30 percent and the government hopes to speed up adoption rates and reach an official target of 38 percent by 2005 with new 3G networks.

The new technology allows speedy mobile access to data and video through the Internet.