SINGAPORE - Malaysian telecoms firm Axiata Group Bhd and Norway's Telenor ASA are set to announce on Thursday a transaction that involves the Malaysian mobile operations of both firms, a source familiar with the matter said.

Trading in shares of DiGi.Com Bhd, which counts Telenor as its biggest shareholder, and Axiata, were suspended earlier in the day pending a material announcement, Axiata and DiGi.Com said.

The source declined to be identified as he was not authorised to speak to the media.

In response to a Reuters query, Telenor and DiGi.com declined to comment, while Axiata referred to a news conference to be held later on Thursday.

In September 2019, Telenor and Axiata called off a proposed deal to create a telecoms joint venture with nearly 300 million customers across South Asia and Southeast Asia, blaming "complexities" in the project.

And last year, Telenor said it was combining its Asian operations into a single entity under new leadership to be better placed to pursue deals in the region.

Digi.Com is Malaysia's second largest mobile services provider by subscribers, while Axiata's domestic unit Celcom Axiata Bhd, is the third largest, in a sector facing intense competition.