Saudi Telecom Company sees the entry into Telefónica as a “milestone” in its “ambitious expansion and growth.”

Saudi company Saudi Telecom Group (STC) sees its entry into Telefónica with the purchase of a 9.9% stake as a “milestone” in its “ambitious expansion and sustainable growth strategy,” as well as a sign of confidence in the “upward growth” potential of the Spanish-origin company.

This was expressed by the CEO of the Saudi company, Olayan Al-Wataid, in presenting the company’s results for the third quarter of the year, in which it recorded “the best revenues in its history” for that period.

“Telefónica is considered one of the largest telecommunications companies in the world and has a presence in key markets such as Spain, Germany, the United Kingdom and Brazil. This investment seeks to strengthen cooperation between the two companies so that they benefit from all the opportunities available in their future,” Al-Wataid said in a statement sent by the company.

For the company, this “investment” in Telefónica “is in line with the ambitious strategy of expansion and sustainable growth, which has led to numerous investments in the ICT sector, both locally and internationally.”

“Telefónica benefits from a unique portfolio of best-in-class infrastructure assets and innovative technology platforms, developing next-generation capabilities in areas such as cognitive intelligence, computing and the Internet of Things,” he added.

Excellent result

Regarding business results, Al-Wataid indicated that the result was “excellent”, as was planned, and “Saudi Telecom” was able to achieve the “highest revenues” in history for a period of 9 months, with 54.61 billion riyals, about 15 thousand million dollars, at a rate of 9.10%. . Higher than what was obtained in the same period of the previous year.

As for net profits for this period of 2023, they amounted to 11,021 million riyals ($2,937 million), an increase of 17.08% compared to what they were at the end of the third quarter of 2022.

In this sense, the company indicated that during this quarter it will distribute 1,993.80 million riyals ($531 million) to its shareholders.

The director said that the results and quarterly and nine-month performance of the Saudi Telecom Company were excellent and in line with expectations, which were achieved as a result of the group’s commitment to its “Dare 2.0” strategy and its operational and financial plans.

STC’s purchase of Telefónica shares, which would make the Saudi company its majority shareholder, still requires the appropriate license from the Spanish Ministry of Defence, given that the company has businesses related to “critical infrastructure” in the country.

Sources close to Telefónica considered at the beginning of October in statements to EFE that this would be a “long-term” process and that it was expected to be “complex”, as STC was not expected to formally apply to become a shareholder before a final decision. The government is formed in Spain.

At the beginning of last September, the Saudi Telecom Company announced the purchase of 9.9% of the telecommunications company’s capital for 2.1 billion euros.

To do this, it acquired 4.9% of the company in the form of shares and another 5% through derivatives, which it will convert into shares once it obtains the relevant licenses.

In recent weeks, the government has defended that it will carefully study the operation to ensure national defense and security.