The 80-20 venture called Thuraya-Sudatel, with an initial capital of $2.5 million, will act as Thuraya's service provider in Sudan, seen as a fast growing market.
"This is a significant decision for Thuraya in recognition of Sudan as a priority market," said Thuraya chairman Muhammad Umran after signing the agreement in Dubai on Wednesday with Sudatel General Manager Abd al-Aziz Usman.
"We are targeting revenues of $30 million at the end of five years in Sudan, a fast growing market," Umran added.
Abd al-Aziz Usman said: "Thuraya has been a leader in its field and we hope to benefit from their pioneering edge. This new company has the right components to ensure its success in helping to build the telecoms infrastructure in Sudan."
Thuraya, established in 1997 by UAE state telecom monopoly
Etisalat, Abu Dhabi Investment Company, Arabsat and Qatar's Qtel, has sold more than 200,000 mobile handsets and had over 185,000 direct users at the end of 2003.