India's Spice Communications, partly owned by Telekom Malaysia, is planning to raise US$250 million dollars in an initial public offering that will help fuel its expansion in India, a report said.

The New Straits Times daily quoted a unnamed source close to the exercise as saying the IPO may happen as early as the first quarter of 2007.

However, the move to tap India's capital markets will be subject to approval by authorities as well as the company's board of directors, the newspaper said.

"If everything goes well, we would be able to tap the capital market as early as the beginning of next year," the source was quoted as saying.

Telekom Malaysia, through its unit TM International, bought a 49 percent stake in Spice in June, a move it said would deliver a foothold in the Indian telecommunications market, one of the fastest growing in the world.