STC made SR3.32 billion ($885 million) in the three months to Sept. 30, up from SR2.4 billion a year earlier, the company said in a statement posted on the bourse website.

It was STC's highest quarterly net earnings since the second quarter of 2006.

"The rise in third-quarter net profit stems from a 5 percent rise in operating profit and the realization of gains from the sale of fixed assets — Al-Jawal Network Towers — to Aircel of India affiliated to Malaysia's Binariang Holding," STC said.

It said the gain from the sale stood at SR728 million. Excluding this gain, net profit rose 7.7 percent, which was still above the most optimistic earning forecasts by seven analysts in a Reuters survey last month.

The country's largest telecoms group by market value saw its operating income rise 5 percent to SR3.26 billion. It had fallen 27 percent in the second quarter to SR2.35 billion.

The third quarter of this year coincided with summer holidays and the fasting month of Ramadan, which usually boost the use of telecommunications.

Nine-month operating income fell 22 percent to SR7.95 billion.

The company will give shareholders a 0.75 riyal dividend for the third quarter, equivalent to 40 percent of its earnings per share for the period.

STC has spent about $7 billion since 2007 to strengthen its foreign presence aggressively, mainly in Asia, while the domestic market it once monopolized opened to more players.

This has put it under intense pressure to maintain profitability levels as a telecom war heats up in the region with such rivals as Kuwait's Zain and Emirates Telecommunications.

STC's shares are down 11.3 percent this year, sharply underperforming both the telecom sector and the all-share index.