DHAKA (Reuters) - Bangladesh's army-backed interim government said on Thursday it would allow mobile phone networks to operate in the south-eastern hill districts, which had been barred for security concerns.

"We have decided to allow cellphone operation in Chittagong Hill Tracts," head of the government Fakhruddin Ahmed said during a visit to the region.

Mobile phone services have been in operation in Bangladesh since the early 1990s, except in the three hill districts where a 25-year tribal insurgency ended in 1997 when a peace deal was signed.

Some rebel groups remain at large, and often clash with troops in the 5,500 sq-miles (14,200 sq-km) area bordering India and Myanmar, but peace has largely returned to the area.

Fakhruddin said initially the three municipalities of Rangamati, Khagrachhari and Bandarban districts would be brought into the country's mobile phone network.

The country has six cellphone providers with more than 38 million subscribers.

Although nearly half of Bangladesh's over 140 million people still live on less than a dollar a day, the country has one of Asia's fastest growing cellular markets.

(Reporting by Ruma Paul; editing by Sue Thomas)

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