DUBAI -- The state-owned telecoms corporation Etisalat announced on Sunday net profits of 683 million dollars in 2001, up 5.8 percent on the previous year.

Net profits rose from 2.367 billion dirhams (645 million dollars) in 2000 to 2.505 billion dirhams (683 million dollars) last year, Etisalat said in its annual report.

Revenues surged nine percent on 2000 to a new record of 7.557 billion dirhams (2.059 billion dollars) last year, it said.

Etisalat Chairman and UAE Communications Minister Ahmad Humaid al-Tayer attributed the growth to "a combination of subscriber growth ... and a growth in overall traffic volume stimulated by a reduction in international calling rates to several destinations."

Etisalat will invest some 926 million dollars over the coming two years to maintain high standards, facilitate the transition to the new generation network (NGN) and ensure continued profitability and growth, Tayer said.

"The main developments will be in the mobile network and the NGNS," he said as carried by AFP.

Etisalat currently has a fixed exchange capacity of 1.4 million lines, as well as 1.9 million GSM users and around 250,000 Internet subscribers, representing penetration rates of 62 and 29 percent respectively.

Calls have been heard from the private sector in Dubai, which is promoting itself as a regional Internet and multi-media hub, for the government to break Etisalat's monopoly to improve services and foster competition.

The telecom sectors in all six Persian Gulf Arab monarchies remains state-owned but Saudi Arabia and Oman have plans for privatization.