Saudi Arabia's Etihad Etisalat  (Mobily) on Tuesday said its second-quarter net profit rose 29 percent, narrowly beating analysts' forecasts as the telecoms carrier's business sector and data revenues soared, and smartphone sales grew.

The operator, an affiliate of UAE's Etisalat, reported a second-quarter profit of 1.16 billion Saudi riyals ($309 million), up from 901 million riyals in the prior-year period, Mobily said in a statement.

Analysts polled by Reuters had expected the firm to post a quarterly profit of 1.1 billion riyals.

'The increase in revenues is attributable to higher minutes of usage, data transmission and increase in smartphone sales,' the company said. 'Free cash flow will remain on the rise, which is a positive indication of Mobily's ability to increase its dividends.'     

Mobily's board will meet on July 21 to decide on an interim dividend for the first half of this year. 

Net income for the first-half of 2011 was 2.16 billion riyals, up from 1.62 billion riyals a year earlier, with business sector and data revenues up 47 and 46 percent respectively over the same period. Data accounted for a fifth of Mobily's revenues in the six months to June 30.

Mobily has about a 75 percent share of Saudi Arabia's mobile broadband subscribers, the company said. The kingdom's smartphone penetration -- around 11 percent -- will rise as handset prices fall, with social networking websites driving demand for Internet connectivity, it said.

Mobily’s for the first half of 2011 amounted to 9.611 billion riyals, as compared to 7.554 billion for the same period last year, an increase of 27 per cent.

Engineer Abdulaziz Saleh Alsaghyir, chairman of the board, said Mobily is developing and enhancing its infrastructure through its networks expansion, which will help the company keep growing as per its declared business strategy.

He said the number of broadband users had exceeded 5 million in the kingdom and Mobily has an estimated 75 per cent share of mobile broadband subscriptions in the kingdom.

Mobily has taken a strategic decision to add LTE services which will be a major factor for excellence and differentiation with the potential for broadband market share gains, he said.

He added that Mobily LTE network operation is expected to start before the end of 2011, pointing out that the major cities of the kingdom will be covered first and the remaining cities will be covered as per a well studied plan depending on many technical and marketing factors.  –Reuters and TradeArabia News Service