Saudi Arabia's Etihad Etisalat (Mobily) has ended talks over buying a stake in fixed line operator Etihad Atheeb Telecommunications, said the mobile firm.

Mobily, Saudi's second-biggest telecoms operator by subscribers, had via wholly-owned subsidiary Bayanat al-Oula signed a memorandum of understanding with four of Atheeb's founding shareholders in August last year to buy a controlling interest in the company.

Talks proved protracted and last month Mobily said it wanted to acquire a 20 per cent stake in Atheeb through a rights share issue, but Mobily has now ended talks with these shareholders, a statement to the kingdom's bourse said.

Atheeb, which has about 200,000 customers according to its website, has struggled to compete against former monopoly Saudi Telecom Company and this week posted a loss of 249 million riyals ($66.4 million) for the 12 months ending March 31.

Analysts say the main attraction for Mobily, an affiliate of the UAE's Etisalat, was to acquire Atheeb's landline licence.

Bayanat, an earlier Mobily buy, has a fixed line data licence so adding Atheeb could help Mobily offer packages of mobile and fixed broadband services and landline calls.-Reuters