The Nigerian arm of UAE-based Etisalat said it had bought a local telecoms firm with a 3G licence to help it develop its data and broadband services and compete with other GSM operators.

Nigeria is one of the world's fastest growing mobile markets, and Etisalat faces stiff competition from South Africa's MTN Group, India's Bharti Airtel and local rival Globacom, all of which already operate 3G services.

The Gulf's number two telecoms group said the acquisition of Alheri Mobile Services Ltd would enable Etisalat Nigeria to better compete with its main rivals in Africa's most populous nation, home to more than 140 million people.

'We are delighted to acquire the 3G licence, which is an essential element of our plans for further developing the market for mobile broadband in Nigeria,' chief executive Steven Evans said. He did not disclose the cash value of the deal.

'There is pent-up demand in Nigeria for broadband, and we intend to be the leader in satisfying it,' he said.

Etisalat has more than 6 million subscribers in Nigeria and aims to hit the 12 million mark by the end of 2011, but competition is fierce in a market that already has more than 60 million mobile users.

Bharti acquired the African telecoms assets of Kuwaiti group Zain in a $9 billion deal in June, giving it access to what it says is the 'biggest future continent' for telecoms.

On Thursday, just two weeks after rebranding as Airtel across Africa, it announced promotional call rates of 12 naira ($0.08) a minute in Nigeria, half the previous tariff and considerably undercutting its main rivals.

Alheri was owned by billionaire industrialist Aliko Dangote, whose conglomerate Dangote Group has interests ranging from cement and flour to real estate and shipping and who is ranked by Forbes as Nigeria's richest man.

It bought the 3G licence about 3 years ago but never made it operational. 'It makes sense for us to sell Alheri Mobile to Etisalat Nigeria as we believe that the market here can only sustain four mobile operators in the medium to long term,' Alheri Mobile chief executive Boye Olusanya said.

Proceeds from the sale would be used to develop Alheri's other telecoms assets, he said.-Reuters