AT&T eyes stake in Malaysia's TM Intl: report

A woman walks past a logo display of Telekom Malaysia at its office in Cyberjaya outside Kuala Lumpur May 16, 2006. AT&T Inc, the biggest U.S. phone company, wants to buy an unspecified stake in the mobile arm of state-controlled phone firm Telekom Malaysia, a Malaysian newspaper reported on Wednesday.

KUALA LUMPUR (Reuters) - AT&T Inc (T.N), the biggest U.S. phone company, wants to buy an unspecified stake in the mobile arm of state-controlled phone firm Telekom Malaysia (TLMM.KL), a Malaysian newspaper reported on Wednesday.

Telekom Malaysia is spinning off its mobile business into a separately listed firm, TM International, which will include its domestic Celcom unit and operations in nine other countries, including India, Indonesia, Bangladesh and Sri Lanka.

Telekom declined to comment on the report.

"Telekom Malaysia wishes to inform that it does not comment on any news that is speculative in nature," it said in a statement.

AT&T is among the frontrunners to form a partnership with TM International as the U.S. firm has a presence in Vietnam -- a market that Telekom is keen to penetrate, the newspaper said citing unnamed sources.

Telekom Malaysia had earlier dismissed as speculative a November report by Britain's Sunday Times that Vodafone (VOD.L) was a frontrunner to buy a 25 percent stake in TM International.

(Reporting by Liau Y-Sing; Editing by Tomasz Janowski)