JEDDAH: Saudi telecom giant stc has signed a contract worth SR32.64 billion ($8.71 billion) with an undisclosed government entity to build, operate, and provide telecommunications infrastructure services. 

The agreement, revealed in a filing with the Saudi Stock Exchange, spans 18 months for preparation and execution, followed by 15 years of operational management. 

The deal comes amid the continued expansion of Saudi Arabia’s growing telecom and information and communication technology infrastructure sector, which was valued at $3.5 billion in 2023. 

According to market research store Research and Markets, the sector is projected to grow at a compound annual growth rate of 7.1 percent through 2029, driven by initiatives under the Kingdom’s Vision 2030, aimed at economic diversification and technological innovation. 

“The financial impact will be positive, and the revenue will be recognized in stc’s consolidated financial statements after the initial operation of the project, which is expected to be in the fourth quarter of 2026 until the end of the contract period,” the company said. 

Following the announcement, stc’s shares opened at SR43.20, marking a 2.01 percent rise from the previous close of SR42.35, and ended the day at SR43.30, up 2.24 percent.

The stc Group, ranked among the top 10 most valuable telecom brands worldwide in the 2024 Brand Finance Report, has maintained its position as the most valuable telecom brand in the Middle East for five consecutive years. 

This comes as stc seeks to enhance Saudi Arabia’s telecom capabilities, aligning with the country’s broader goals of digital transformation and economic diversification. 

Last month, stc completed the transfer of ownership of Golden Lattice Investment Co. to a newly established entity as part of the sale of a 51 percent stake in Telecommunications Towers Co. to the Public Investment Fund. 

This follows another deal struck in November, when stc received foreign investment authorization from the Spanish Council of Ministers, allowing it to raise its voting rights in Telefonica from 4.97 percent to 9.97 percent. 

This strong growth in Saudi Arabia’s ICT sector is driven by several factors, including the country’s rapidly expanding digital landscape and rising demand for advanced telecommunications and ICT solutions, according to the Research and Markets report. 

The rollout of 5G networks, alongside efforts to develop smart cities and accelerate digital transformation across industries, is further boosting the telecom and ICT sectors. Key players in the market are actively upgrading and expanding their networks to meet the evolving needs of businesses and consumers, it added.