Saudi telecom giant stc has secured an SR32.64 billion ($8.71 billion) contract with an undisclosed government entity to build, operate, and provide telecommunications infrastructure services. The deal includes an 18-month preparation and execution phase, followed by 15 years of operational management, as part of Saudi Arabia’s expanding telecom sector.
Key Details of the Deal
Contract Duration and Operational Management
The 18-month deal involves preparation and execution, after which stc will manage the infrastructure for 15 years. This agreement reflects the growing demand in Saudi Arabia’s telecom and ICT sector, valued at $3.5 billion in 2023, and is expected to continue expanding with a projected compound annual growth rate of 7.1% through 2029.
Impact on stc’s Financials
The financial impact of the deal is expected to be positive, with revenue to be recognized after the initial operation of the project, which is slated for the fourth quarter of 2026. stc’s shares saw a 2.01% rise following the announcement, reflecting investor confidence in the company’s growth prospects.
Vision 2030 and Economic Diversification
This deal aligns with Saudi Arabia’s Vision 2030, which focuses on economic diversification and technological innovation. stc is actively enhancing Saudi Arabia’s telecom capabilities, positioning itself as a leader in the Kingdom’s digital transformation efforts.
Recent Developments and International Expansion
stc continues to strengthen its position globally, maintaining its status as the most valuable telecom brand in the Middle East for five consecutive years. The company has also completed significant moves in the international telecom market, including raising its voting rights in Telefonica and transferring ownership of Golden Lattice Investment Co.
Boosting the Telecom and ICT Sectors
The growing demand for advanced telecom and ICT solutions, coupled with the rollout of 5G networks and smart city development, is propelling the sector’s expansion. stc and other key players are upgrading their networks to meet the evolving needs of both businesses and consumers.
