Saudi Telecom Company (STC), has reported a more than 20 per cent decline in the fourth-quarter net profit as rising cost of services and an increase in operating expenses bit into state-controlled telecommunications firm’s profitability.

The net profit slipped to SR1.95bn ($520m) for three months ending 31 December, from SR2.442bn for the same period a year earlier, the company said in a bourse filing. This is the third quarterly decline in profits for the company.

The full-year 2015 net profit also slumped for the former monopoly. It declined 14.82 per cent to SR9.335bn.

The company said profits were affected by SR687m increase in the cost of services and SR540m jump in operating expenses. The SR634m drop in other income also affected the bottom-line in the fourth quarter, the company said.

STC domestic market competitor Mobile Telecommunications Company (Zain) said its fourth quarter 2015 losses narrowed.

The net loss for Zain came down to SR291m which compares with SR306m loss for the three-month period ending 31 December in 2014. Its full-year net loss also contracted by 23 per cent to SR972m down from SR1.27 at the end of 2014.

The improvement in fourth quarter financial performance is mainly due to a 30 per cent increase in the gross profits which reached SR1.7bn, the highest since the company’s inception, Zain said in a stock exchange filing.