Saudi Arabia will complete its biggest privatisation in two decades, with the hoped-for sale of a 30% stake in Saudi Telecom by the end of the year.

Information Minister Fouad al-Farsi announced the sell-off of the country's telecoms monopoly in a statement carried by the official Saudi Press Agency.

The mobiles market will be opened to competition by the last quarter of 2004 and the fixed-line market by the end of 2008, the statement said.

Saudi Telecom has a monopoly over telephone, mobile and internet services in the oil-rich kingdom, with 3.3 million fixed lines and three million mobiles covering a population of 22 million.

Saudi Arabian Airlines and the National Commercial Bank are also up for privatisation but no dates have been set.

Saudi investors only

Shares will only be available to Saudi citizens, who can buy up to 20% of the company, and the remaining 10% will be split between the General Authority for Social Security and the Retirement Pensions' Authority, the statement said.

It is the first float of a major state asset since 30% of petrochemical giant Saudi Basic Industries was privatized nearly 20 years ago.

The kingdom's Public Investment Fund will offer the shares, at 170 riyals ($45) each, in the last quarter of 2002, raising over $3bn.

Saudi Telecom reported a 11.5% fall in profits to $933m for 2001 from the previous year, due to increased operating costs and early retirements, despite a 17.1% rise in operating profits to $5.3bn.

The company's total assets were valued at $10.4bn at end of 2001.