STC’s international expansion performance – Our opinion

Now that we’ve got our multientry visa for KSA, and considering the heavy telecom movements that are taking place in the country, it’s time to start publishing country specific articles related to the Saudi’s telecom environment.

Following up the ArabBusiness Newsletters of 2007, I recovered a post where Saudi Telecom Company (STC) stated that was in the final stages of selecting a bank or banking consortium to advise it on future international investment opportunity as a new inorganic growth strategy was going to put in place. STC’s CEO said the telco was entering a new phase in its development where it was actively seeking investment opportunities outside of Saudi Arabia, and he believed the company’s size, scale and potential to generate synergies would allow STC to acquire investments without over-extending itself.

STC embarked then on an investment strategy called 10×10, seeking to generate 10% of our total service revenues from inorganic growth by 2010. STC’s 10×10 expansion strategy was reminiscent of MTC Group’s original 3x3x3 strategy, which was geared at the company ramping up its regional and international expansion plans in a bid to execute 27 years worth of development in a nine-year period seeking investment opportunities in the Middle East and North Africa region, South Asia and sub-Saharan Africa. Given the telco’s position as one of the largest telecoms operator in the Gulf, STC had as a main objective to pursue proportionally large investment opportunities.

Two years after, STC has recently announced the appointment of Eng. Saud bin Majed Al Daweesh as CEO for STC Group following new organizational restructuring in order to cope with the large expansion of STC operations both locally and internationally. This change represents the first phase of STC’s planned development and growth in order to keep abreast with its local and international investments and enable it to lead its operations in full force as a global enterprise.

The change entails creating key new administrative units that report back into the CEO of the Group which includes two additional CEOs, one overseeing financial, sales, and marketing functions in the Kingdom of Saudi Arabia and the other heading international operations which involves managing and diversifying external investments for the Company and creating synergies amongst them. STC has been expanding internationally for the past two years and has achieved global status in a short period of time. STC has modified its organizational structure to get the highest value from the Saudi operations as well as of other investments in Kuwait, Bahrain, Indonesia, Malaysia, India, Turkey and South Africa.

With increasing returns, STC took a strategic decision to expand on an international level and started implementing an ambitious expansion strategy outside its home base by investing in key markets which include Malaysia, Indonesia, India, Kuwait, Kingdom of Bahrain, and South Africa. Here’s our analysis and point of view of STC’s International expansion performance so far and a detailed comparison and bechmark with STC’s telecom competitors in the Gulf (Zain, Etisalat, Orascom and Qtel).

Enjoy the reading. Best regards, CVA. Off to Al Andalus (الأندلس‎)