Saudi's Mobily awards contracts worth $256m

Saudi Arabian telecommunications provider Etihad Etisalat (Mobily) awarded contracts worth a total of $256m to Ericsson and Huawei to expand and upgrade its high-speed networks, the company said on Sunday.

Mobily, the second-largest operator in the Middle East's largest economy, aims to strengthen its data services, where analysts have said there is more room for profit growth.

Analysts polled by Reuters forecast Mobily's fourth-quarter net profit to grow, on average, by 5.1 percent to SR1.78bn ($465m). The company accounted for 41 percent of total Saudi telecom revenue in the first nine months of 2012.

Swedish telecom company Ericsson signed a contract for SR563m and China's Huawei signed one for SR400m, Mobily said.

The projects will expand both the 3G network and long-term evolution, or 4G, network and will be implemented within a year, the company said in a statement quoting chief executive Khalid al-Kaf. The statement added that all the expansion and upgrade operations would be completed in the first half of the year.

LTE is specifically designed to carry data rather than voice and potentially offers download speeds more than double that of 3G, which it will eventually supersede, although a lack of LTE-enabled handsets means consumer adoption has been slow.

Mobily said its 3G network now covers 96 percent of populated areas in Saudi Arabia. As well as expanding its networks, the contracts will help improve efficiency, the company said.