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Saudi Telecom Firm stc Secures $8.7 Billion Contract for Telecommunications Infrastructure

Prime Highlights: 

The deal spans 18 months for preparation and execution, followed by 15 years of operational management. 

Revenue from the contract will be recognized in stc’s financial statements starting in Q4 2026. 

stc’s shares saw a 2.01% increase, opening at SR43.20 and closing at SR43.30 following the announcement. 

Key Background: 

Saudi telecom leader stc has secured a significant contract valued at SR32.64 billion ($8.71 billion) with an undisclosed government entity to build, operate, and provide telecommunications infrastructure services. The agreement, disclosed in a filing with the Saudi Stock Exchange, covers an 18-month preparation and execution phase, followed by 15 years of operational management. 

This deal is part of the ongoing expansion of Saudi Arabia’s telecom and information and communications technology (ICT) sector, which was valued at $3.5 billion in 2023. Research and Markets anticipates that the sector will experience a compound annual growth rate of 7.1 percent through 2029, fueled by initiatives aligned with the Kingdom’s Vision 2030. These initiatives aim to drive economic diversification and technological innovation. 

stc, ranked among the world’s top 10 most valuable telecom brands in the 2024 Brand Finance Report, has been a key player in supporting Saudi Arabia’s telecom capabilities. The company aims to enhance the Kingdom’s infrastructure, in line with broader goals for digital transformation. This is evident from its consistent growth in the Middle East, where it has maintained its position as the most valuable telecom brand for five consecutive years. 

The financial impact of the contract is expected to be positive, with revenue recognition anticipated after the commencement of the project’s operations, expected by the fourth quarter of 2026. Following the announcement, stc’s shares saw a 2.01 percent increase, opening at SR43.20 and closing at SR43.30. 

The contract is part of stc’s broader strategy of growth and expansion. Recent activities include the sale of a 51 percent stake in Telecommunications Towers Co. to the Public Investment Fund and securing foreign investment authorization from the Spanish Council of Ministers to increase its stake in Telefonica. The rapid development of 5G networks and smart cities further supports growth in Saudi Arabia’s telecom and ICT sectors, as businesses and consumers demand more advanced digital solutions.