"(A capital increase) is under study, under consideration, and we hope to finalize within a month," Saad Al-Barrak told reporters on the sidelines of a conference.

The company, which is 25 percent owned by Kuwait's Zain, said in January it was in talks with creditors after missing some commitments last year on a $2.5 billion Islamic loan.

In February, Barrak said the company will seek a 30 percent capital increase in 2010, half of which would be through converting debt worth $577 million into equity and the other half from founding shareholders.

"We are discussing with CMA (Capital Market Authority) the different options forward," said Barrak. "We have our advisers ... and we hope within June we should be able to come up with a final conclusion."

Barrak said he hoped the telecoms operator will increase its subscribers to 7.5 million by the end of the year.

"Our target is to be EBIDTA positive in terms of financial performance ... in the second year of operation," he added.

Zain Saudi started operations in late 2008 after paying with other investors $6 billion to win the third Saudi mobile license. It competes with larger rivals Saudi Telecom and Mobily.