Dominant fixed-line provider Telekom Malaysia is on track to roll out the first phase of a $4.7 billion project to build a nationwide high-speed broadband network, a top official said on Wednesday.

Chief Executive Zamzamzairani Mohd Isa said the state-run firm is expected to finalise an agreement with the government "very soon" but did not give details.

"We will start rolling out six months after we sign the contract. It's on track," he told reporters on the sidelines of a an industry conference.

A government official said the deal was likely to be concluded in about a month.

Telekom Malaysia is expected to invest 8.9 billion ringgit in the first phase out of the total cost of 11.3 billion ringgit. The company has said the government would invest the remainder. But a July 1 signing ceremony with the government was postponed, fuelling talk the project might be snagged.

Analysts said the investment required to fund the project would affect Telekom Malaysia's cash flows and capacity to pay dividends, further hitting the firm's earnings outlook, which is already clouded by a stagnant fixed-line market.

A government official said the deal was delayed as the government was still reviewing its portion of funding in the project.

"The reason why it has come to this situation is because the government has got to review certain things, such as the availability of funds," said Zamani Zakariah, senior director at Malaysian Communications and Multimedia Commission.

"We are calculating what's the threshold figure that could move the project and effective in implementation," he told reporters at the conference.

At the midday break, Telekom Malaysia shares were up 0.6 percent at 3.36 ringgit.

Source:reuters