Etisalat said on Tuesday it sold 43.75 million shares in Saudi affiliate Etihad Etisalat (Mobily), generating returns of 2.33 billion dirhams ($634.3 million).

Profit from the sale will be counted in the company's second-quarter earnings, it said in a statement on the Abu Dhabi bourse website.

The company sold the shares at 55 riyals each ($14.67), or a total 2.41 billion riyals, it said.

Etisalat said last week it sold a stake in Mobily, as required by its licence. It did not give details at the time.

Etisalat's holding in the firm is now 26.25 percent, compared with 35 percent, it said then.

Six Saudi institutional investors, including state-run Public Pension Agency and General Organisation for Social Insurance (GOSI), have held 45 percent of the Mobily's shares.

Mobily, one of two mobile telephone service providers operating in a country of 24 million people, started operations in mid-2005. It has since claimed a 40 percent market share.

Its 2007 profit almost doubled to 1.38 billion riyals on a 44.3 percent increase in sales to 8.44 billion riyals.

Mobily and its rival Saudi Telecom Co will face more competition this year when a group led by Kuwait's Mobile Telecommunications Co (Zain) starts operating a third mobile network in the kingdom. - Reuters