Saudi Telecom Company (STC) is in the process of creating a fully-owned data connectivity company with a total investment of 3.8 billion riyals (USD 1 billion). STC is aiming to establish Saudi Arabia as the region’s leading digital hub connecting Asia, Africa, and Europe.
International and regional connectivity
The new company will administer data centres to bolster international and regional connectivity. The new company will hold 100 million riyals (approximately USD 26.5 million), which will be financed by STC, according to a statement filed with the Tadawul bourse.
Once the company has been registered and finalised, STC will transfer ownership of its data centers, international submarine cables and international points of presence assets to the new company, the initial valuation of which amounted to approximately 2.1 billion riyals (USD 560 million) as of December 2021. The new company will later make an additional investment of 1.7 billion riyals (approximately USD 453 million). The new company will manage and continue to invest in submarine cables including new cables landing at multiple points in Saudi Arabia.
“These assets and investments will be subject to a detailed evaluation at a later stage in order to determine their final valuation, in addition to determining the final capital needed for the new company upon completion of the necessary regulatory requirements,” the statement to the bourse said.
A regional digital hub
STC expects the data company will enhance Saudi Arabia’s position as a regional digital hub connecting Asia, Africa and Europe, leveraging Saudi Arabia’s geographical location.
STC is currently undertaking a project to build 16 data centres across Saudi Arabia.
