A South Korean consortium has won a $1 billion (Dh3.67 billion) deal to lay fibre optic cables in Saudi Arabia, a state trade promotion agency said Wednesday.

Korean Middle East Engineering, a joint venture of four South Korean businesses in the kingdom, was named main project contractor by Saudi Arabia's Integrated Telecom Company, the Korea Trade-Investment Promotion Agency said.

The project is to set up a national network in Saudi Arabia and also to connect the country with Sudan, Yemen, Oman and the United Arab Emirates by undersea cable by December 2013, the agency said in a statement.

"Saudi Arabia is becoming an attractive market for South Korean businesses," said Lee Kwan-Seok, head of the agency's Korea Business Centre in the Saudi capital Riyadh.

Lee said the deal was expected to create new opportunities for South Korean businesses in Saudi Arabia, noting the cable contract was awarded despite fierce Chinese competition.

"This shows how highly they value the technology of South Korean businesses," he said.