Saudi Arabians gearing up for the chance to buy shares in the country's national telecoms monopoly have received a fresh insight into its finances.

Saudi Telecommunications Co (STC), set up in 1998 as the first step in a process towards privatising Saudi telecoms, has said it achieved net profit of 3.47bn Saudi riyals ($928m) in 2001, down 12% from 3.95bn riyals the year before.

Saudi telecoms

3 million land lines 2 million mobile phone users 400,000 internet users Source: STC

The company said the fall resulted from payments of 790m riyals to temporary staff and 600m riyals to an early retirement fund.

A sale of shares in STC to the public forms a key part of the Saudi government's hopes to reinvigorate the economy through commercialising and privatising state-owned companies.

Fast expanding

Progress has been patchy, with some intended privatisation candidates such as Saudi Arabian Airlines having implemented few of the reforms required, economists say.

But telecoms, a growth industry in a country with a fast expanding population and a thirst for new technology, has appeared to be one of the most financially viable prospects.

Analysts say the Saudi telecoms market has grown 30% in each of the past four years.

According to STC, Saudi Arabia now has about three million land lines, two million mobile phone users and 400,000 internet users among its 22 million population.

Welcome addition

The government has said it plans to offer STC shares to the public before the end of this year.

The company will be a welcome addition to the local stock market for investors.

Although much the largest in the Arab world in terms of total market value, the Saudi stock market has relatively few listings.

The index is dominated by a handful of closely held companies, such as petrochemicals giant Saudi Basic Industries Corporation and the commercial banks.