Saudi mobile phone subscriptions topped 41 million at the end of the third quarter, beating expectations from several analysts as competition between the kingdom's three operators hotted up.

'The market penetration for this service has reached 162 per cent,' the Communications and Information Technology Commission said in a statement late on Saturday.
The figures beat expectations by EFG-Hermes, rising 13 per cent from last year's 36 million subscriptions and a penetration rate of 144 per cent.

The increased subscriptions in the three months to September are credited to increased competition between a trio of telecommunication companies in a country that has a growing population of 25 million.

'Saudi society benefited from the competitive decline in prices so the young population, which represents 73 per cent of society, started subscribing to more than one mobile,' said Abdulhamid al-Amry, member of the Saudi Economic Society.

He also said that this year the expatriate community in the country increased by 12 per cent, which was another factor in the increased number of mobile phone subscriptions.

The number of subscriptions exceeded forecasts from EFG-Hermes, which said in June the Saudi market would end 2009 with 39.1 million active mobile subscribers and a penetration rate of 154 per cent.

The top OPEC exporter has three licensed mobile operators, Saudi Telecom Company (STC), the country's largest, followed by Etihad Etisalat (Mobily), and new comer Zain Saudi Arabia.

While subscriptions numbers have increased Saudi Mobily was the only one of the three providers to record a rise in net profit for the third quarter, posting a higher than expected 807 million riyals.

STC's profits declined by 20 per cent to 2.4 billion riyals while Zain Saudi Arabia posted a 26.3 per cent wider net loss.

Earlier this month, Nomura said it expected the Saudi telecommunication services market to continue to post strong growth, benefiting from favourable demographics.

Broadband subscriptions rose to almost 2 million at the end of the third quarter, up from 1.3 million in 2008, the data showed.

Landlines stood at 4.17 million with a penetration rate of 68 per cent, almost unchanged compared to 2008 which the commission blamed on strong demand for mobile services.

In June EFG-Hermes said it expects Saudi Arabia's telecom market to grow to 45.3 million subscribers in 2013.-Reuters