Saudi Arabia's Mobily has brokered a vendor financing deal to enable it to pay for equipment from Alcatel-Lucent that will enable it to carry out a network upgrade.

The telco said it had agreed a funding arrangement worth US$200 million – or 750 million riyals - with Export Development Canada (EDC).

"The purpose of the Shariah-compliant financing is to acquire telecommunications equipment from Alcatel-Lucent to upgrade/enhance the network," Mobily said in a filing with the Saudi Stock Exchange on Sunday. It did not give any further details of the network project in question.

A month ago Alcatel-Lucent announced that Mobily would be its first virtual RAN customer. The vendor said Mobily would deploy its wireless cloud element radio network controller (WCE RNC), which forms part of its network functions virtualisation (NFV) portfolio,

At the time Mobily said that deploying a virtual RNC would give its network another layer of redundancy and enable it to respond more dynamically to variances in capacity demand.

Mobily is owned by United Arab Emirates operator Etisalat. It is one of three mobile network operators in Saudi Arabia, the others being Saudi Telecom Company (STC) and Zain's local unit.