The company has yet to make a quarterly profit since launching services in 2008 and has battled to compete against better-resourced rivals Saudi Telecom Co (STC) and Etihad Etisalat (Mobily).

Zain Saudi, 37-percent owned by Kuwait's Zain, made a net loss of 223 million riyals ($59.5 million) in the three months to Sept. 30, according to a bourse filing.

This compares with a net loss of 316 million riyals in the prior-year period.

Four analysts polled by Reuters forecast Zain Saudi would make a quarterly net loss of 216.9 million riyals.

Zain Saudi said increased demand, better operational performance and higher gross margins helped reduce its net loss for the quarter. ($1 = 3.7499 riyals) (Reporting by Nadia Saleem, editing by Matt Smith)