Saudi Telecom Company (STC) is setting up a fully owned data connectivity company with a total investment of $1 billion (3.8 billion riyals), to transform The Kingdom into a digital hub for the region to connect with Asia, Africa, and Europe.
STC stated in a Tadawul bourse filing that, the new company, which will specialize in data center hosting, international and regional connectivity, will have an initial capital of $2.66 million (100 million riyals), financed by STC’s own resources.
Once the data connectivity company is established, STC will transfer its $559 million valued data centers, international submarine cables, and international points of presence assets to the new company. In addition, the new company will bring $453 million into an additional investment, resulting in a total investment of $1 billion
The statement further added that “These assets and investments will be subject to a detailed evaluation at a later stage 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 new company will manage and continue to invest in submarine cables including new ones landing in multiple points of Saudi Arabia.
STC sold a 20 percent stake in its technology business, the Arabian Internet and Communications Services Company, raising nearly $1 billion in an IPO last year.
STC hopes that the data company will elevate Saudi Arabia’s current position as a digital hub for the region connecting Asia, Africa, and Europe, leveraging Saudi Arabia’s geographical location in the heart of the Middle East.