Kuwait's third telecoms operator VIVA, an affiliate of Saudi Telecom Company, aims to attract 300,000 subscribers in its first year of operation, its chief executive said on Thursday.

Kuwait, a country of more than 3 million people with mobile phone penetration of more 90 per cent, sold a 26 per cent stake in the state-created firm to Saudi Telecom for KD248.7 million ($930.4 million) in November.

The new company, which launched its brand name Viva this week, will compete with Mobile Telecommunications Company (Zain) and National Mobile Telecommunications Co (Wataniya), a unit of Qatar Telecommunications Co when it launches operations by the end of the year.

'We target a market share of 10 per cent, that means around 300,000 subscribers for the first year,' Najeeb Alawadhi told Reuters.

Zain said earlier this week it had 1.75 million subscribers while Wataniya had 1.27 million subscribers at the end of June.

Alawadhi declined to give a medium-term forecast for subscribers, market share or profits.  He said Viva saw an opportunity despite the high mobile penetration.

'The market can still absorb more. In the United Arab Emirates the penetration is more than 100 percent,' Alawadhi said.

Like other Gulf Arab oil exporters, Kuwait is attracting a growing number of guest workers as regional economies boom on windfall oil revenues.

In November, Saudi Telecom Chief Executive Saud al-Duweish said the new operator would have a market share of 30 percent in 10 years, on which Alawadhi declined to comment.

Alawadhi said the company, which complies with Islamic law banning the receipt of interest, saw no need to borrow or conduct a capital increase for the time being since its 'significant' investments were fully funded by Saudi Telecom.

'In the future, we will review all our options,' he said. Viva was created by the government of Kuwait in response to a parliamentary call, in 2006, for another telecoms operator to be set up to improve services, which industry analysts said were poorer and more expensive than in other Gulf states.

Kuwait is selling a 50 percent stake in the company for $50 million, subscription for which ended on Thursday.

The offer, which is expected to be well oversubscribed, was open only for Kuwaitis, a way for the government to share record oil revenues with citizens.

The government will retain 24 per cent in the new company which could be listed after 2009 pending a board decision, according to Alawadhi.-Reuters