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Mobily to expand Saudi 3G network

Etihad Etisalat aims to capture demand for internet access with $266 expansion.

Etihad Etisalat (Mobily) Saudi Arabia's second largest telecom company, plans to award a 1 billion riyals ($266.7 million) contract to expand its third generation wireless network, the company said on Saturday.

The existing infrastructure, set up by Ericsson, Nokia and China's Huawei, covers 19 Saudi cities.

"The expansion...will cover the rest of Saudi cities," Mobily's Chief Executive Officer Khaled al-Kaf said in a statement, without naming the bidders or saying when the contract would be awarded.

Mobily, in which Emirates Telecommunications Corp. is the main shareholder, competes against Saudi Telecommunications Co. (STC) in the mobile market.

Mobily claims a 34 % market share two years after it started operations in the kingdom.

Of Mobily's 6.2 million customers, 1 million are 3G users, making it the largest of seven firms that provide third generation wireless services in the Middle East and North Africa, the company said in the statement.

The 3G expansion is also designed to capture the growing demand for the internet access, it said.

Mobily began selling wireless internet subscriptions on Saturday at tariffs that were lower than Saudi Telecom's proposed high-speed internet charges.