Zain Saudi Arabia made a net loss of SR632 million ($168.5 million) in the second quarter, down 26 per cent from SR857 million a year earlier, its lowest quarterly loss since it started operations two years ago.

The kingdom's newest mobile phone operator Zain Saudi Arabia, which is 25-percent owned by Kuwait's Zain, attributed the decline in second quarter loss to surge in revenues which doubled on higher customers.

In a statement to the Saudi bourse website, the firm said it has reached during the second quarter a breakeven point on core earnings, or Ebitda, ahead of an initial third-quarter deadline.

Revenues rose to SR1.45 billion during the period, up from SR702 million a year earlier and SR1.1 billion in the first quarter of 2010.

'The reason of the decrease in the second-quarter's net loss is the wider customer base which rose noticeably during the second quarter, exceeding 7 million customers,' Saad al-Barrak, Zain Saudi's chief executive said in the statement.

'The gross profit margin rose to 42 percent against 19 percent for the same period in the previous year,' he said.

Shares in the third mobile phone company to enter the Arab world's largest economy have lost 67 percent since it started commercial operations in August, 2008.

Zain Saudi paid a hefty $6 billion for its licence and has borrowed heavily to fend off cash-rich rivals - state-controlled Saudi Telecom Company and Mobily, affiliated to Emirates Telecommunications.-Reuters