DUBAI (Reuters) – Saudi telecom company Etihad Etisalat (Mobily) wants to borrow about $2.8 billion in the largest ever syndicated Islamic loan to fund expansion before the kingdom licenses another competitor.

Etihad Etisalat will finalize the long-term loan with a syndicate of Saudi and foreign banks by mid-March, said Jamal al-Jarwan, general manager of international business at Emirates Telecommunications Corp..

Emirates Telecommunications, or Etisalat, owns 35 percent of Mobily and has management control of Saudi Arabia’s second largest mobile operator. Saudi Telecom Co. the largest Arab telecom firm by market value, runs the other network.

“The main purpose of the loan is to finance expansion of operations and infrastructure expansion,” Jarwan told Reuters on Wednesday.

The loan will comply with Islam’s ban on lending on interest and would also be used to refinance short-term debt, he said. He could not give details of which banks would lend the money.

The loan tops the $2.35 billion Mobily borrowed in 2005 to finance its license, which until now was the largest Islamic facility ever raised from banks, said Mohamed Faiz, head of Islamic finance at the National Bank of Dubai.

Mobily and its rival have been bracing for competition since the government announced last year it would sell a third mobile phone license and end Saudi Telecom’s fixed-line monopoly in the world’s largest oil exporter, a market of 24 million people.

Saudi Telecom is also in talks to borrow 6 billion riyals to finance its first acquisitions, a banking source told Reuters in January.

Nine consortia are in the race for the mobile license, Saudi Arabia’s telecom regulator said on Saturday.