Saudi Telecom said it would cut 14 per cent of its workforce at home and redouble efforts to expand abroad after being rebuffed by France's Vivendi over a stake in Moroc Telecom.

Chief executive Saud Al-Duweish said he hoped Vivendi would have a change of heart after the French media group declined to sell its Moroc Telecom stake, and that he was still interested in participating in the long-delayed privatisation of Algeria Telecom.

'We tested the waters for Moroc Telecom but we didn't get positive feedback ... We hope Vivendi will change its mind,' he told Reuters. 'We are interested in the Middle East and North Africa in general but we are looking at North Africa in particular.'    

Saudi Telecom is under intense pressure to improve profitability as a regional telecom war heats up, with rivals like Kuwait's Zain beginning to compete within Saudi Arabia.

Saudi Telecom has spent in excess of $6 billion in the past 15 months on foreign expansion as it seeks to catch up.

Vivendi owns 53 percent of Moroc Telecom, which has a market value of around $20 billion.

Al-Duweish said consolidation within the group was key to improving efficiency, and that he hoped to cut expenses by 15 percent. The group planned to cut 3,000 jobs out of its workforce of 21,000, or 14 percent, he said.

'The merger of the internal business entities will save 15 percent of our costs. You will see this in our financial statement,' he said.

Duweish said he was still interested in participating in the stalled the privatisation of Algeria Telecom. 'We will always be interested in Algeria, which is a country with huge potential.' - Reuters