Saudi Telecom agrees $3 bln deal to buy into Maxis

Saudi Telecom is the only one of the five largest Gulf Arab telecom operators that has not made foreign acquisitions, even after losing its mobile phone monopoly in 2005.

The company said in May it aimed to get 10 percent of its revenues from operations outside Saudi Arabia by 2010.

Saudi Telecom made its smallest quarterly profit in more than two years in the first quarter as competition eroded margins.

Rival Etihad Etisalat was able to capture 30 percent of the market within 18 months of starting operations in May 2005.

Competition in the largest Arab economy is set to intensify now that a consortium led by Kuwait's Mobile Telecommunications Co. has won a third mobile license.

Consortiums led by Bahrain Telecommunications Co., Hong Kong's PCCW and U.S. Verizon Communications won initial approval in April to operate Saudi Arabia's new fixed-line phone network.