Telekom Malaysia has consolidated its grip on the country's second-biggest mobile phone operator, Technology Resources Industries (TRI), by raising its stake to 26 percent.

In a statement to the stock exchange late yesterday, Telekom confirmed it had bought an additional 209.12 million TRI shares in the market for RM568.16 million.

The purchase raised its stake to 26.12 percent, making it the single largest shareholder in TRI.

Telekom first raised its interest to 15.6 percent on Monday by buying a 13.14 percent stake in TRI for RM717.39 milliont from state asset manager Pengurusan Danaharta Nasional.

The deal came after Danaharta foreclosed on loan collateral put up by TRI's financially troubled chief, Tajudin Ramli.

Telekom said it would seek representation on the TRI board of directors to safeguard its interest as a substantial shareholder.

It said it may consider exploring with TRI the possibility of merging their cellular businesses or cooperating in some other manner.

Prime Minister Dr Mahathir Mohamad, who is also finance minister, confirmed yesterday that Telekom was keen to take over TRI.

He welcomed the move, saying Malaysia's telecommunications industry had to consolidate to three players from five owing to the huge spending required for third-generation mobile networks.

The premier said Telekom would give a "fair deal" to the public if the mobile operations of TRI and Telekom are merged.

Analysts have said Telekom's takeover of TRI is a wise corporate strategy but could hurt consumers.