RAMALLAH, West Bank, April 26 (Reuters/Mohammed Assadi) - The Palestine Telecommunications Co (PalTel) PALTEL.PL has not yet felt the sting of competition from its first rival in the Palestinian territories, posting a 20.8 percent rise in first-quarter net profit.

PalTel had a net profit of $32.66 million compared with $27.05 million in the same period in 2009.

PalTel Chief Executive Ammar Aker attributed the rise in net profit, the highest in several years, to an increase in the number of new mobile phone and Internet users in the Palestinian territories.

For more than a decade, PalTel, which offers land-line telephone lines, Internet services, mobile phone and media services, was a monopoly, but in November, Wataniya Palestine, partly owned by Qatar Telecommunications Co QTEL.QA, launched a mobile phone service.

PalTel's Jawwal mobile phone unit said separately it had reached 2 million users in the West Bank and Gaza Strip, home to 4 million people.

Wataniya currently has about 200,000 customers. It plans to offer 30 percent of its shares in an initial public offering later this year, the head of the company's board told Reuters last month.

COMPETITION NOT A CONCERN

Aker said competition from Wataniya would not affect the company's growth.

Our shareholders will be happy by year end and we hope to introduce new technologies in the Palestinian market, Aker told Reuters in an interview.

Earlier this month, the Palestinian Authority said it planned to issue a third mobile phone license in 2013.

Aker said Israel, which controls telecommunication frequencies in the occupied West Bank, would have to give more spectrum frequencies for the third operator and the two existing networks so they could launch third-generation (3G) services.

I hope in the next couple of years we will be able to introduce the mobile broadband, the 3G service, (and then) 4G in Palestine after we get the assigned frequencies from the Israeli side, Aker said. 

The Palestinian market's penetration rate is around 58 percent, which meant the company had room to grow, Aker said.

Hopefully we will be able to have a few hundred thousands of subscribers in the mobile (market) and at least tens of thousands in the Internet market, he said.

Aker said the company had some 100,000 Internet users and he expected the figure to increase to 120,000 by year end.

PalTel shares closed up 0.2 percent to 5.21 Jordanian dinars on the Nablus stock exchange before the results were released.