Saudi Telecom STC: Comprehensive Analysis of Financial Performance

Saudi Telecom Company (STC) was established in 1998 and was initially wholly owned by the Saudi government, before a portion of its shares was offered for public subscription, making it one of the prominent companies listed on the Saudi Tadawul market under the symbol 7010. STC is not just a traditional telecommunications company; it is the main provider of mobile and fixed-line services, internet, and modern communication technologies in the Kingdom. The company focuses on developing digital infrastructure and supporting digital transformation in line with Saudi Vision 2030, while expanding its services to include cloud computing solutions, the Internet of Things, and digital payments, aiming to enhance its position in regional and international markets. The Communications and Information Technology Commission (CITC) oversees the regulation of the telecommunications sector in the Kingdom, and STC plays a pivotal role in implementing government initiatives to enhance the efficiency of digital infrastructure. Due to its size and revenues, STC is listed among the key indices of the Saudi stock market, attracting the interest of a wide range of local and international investors.

Saudi Telecom Company (STC) witnessed significant growth in its financial results during 2024 and 2025, reinforcing its leading position in the sector. The company's revenues for 2024 reached approximately 75.89 billion Saudi Riyals, an increase of 6% from the previous year. Meanwhile, the annual net profit surged to 24.7 billion Riyals, achieving a record growth rate of 85.7% compared to 2023. This growth is primarily attributed to the expansion of the company's digital services and diversification of income sources, in addition to some exceptional accounting decisions such as reversing tax provisions that contributed to cost reduction. Earnings per share (EPS) rose to 4.94 Riyals in 2024 compared to 2.66 Riyals in 2023. In the last quarters of 2024 and early 2025, the company continued to achieve strong quarterly profits, with the net profit for the fourth quarter of 2024 reaching approximately 13.5 billion Riyals. STC continues to adopt a generous dividend policy, with cash distributions amounting to 20% of capital for 2024 and quarterly distributions of 5.5% each quarter in 2025. These results reflect the company's strong financial position and its ability to achieve sustainable growth in a competitive environment.

Among the key indicators that investors focus on regarding Saudi Telecom STC stock are the price-to-earnings (P/E) ratio and the dividend yield. The P/E ratio indicates the relationship between the stock price and the annual earnings per share, and it reached a relatively low level during 2024 (between 2-3), due to the significant increase in earnings per share. This reflects the company's ability to achieve high profits compared to its stock price in the market. As for the dividend yield, the total distributions for 2024 amounted to approximately 31% of the capital (20% special dividends + 11% quarterly distributions), equivalent to an annual yield close to 11% at prevailing market prices. These indicators make STC one of the few companies in the market that combine strong growth with an attractive distribution policy. However, these figures should always be analyzed in the context of the overall market performance and monitored for any changes in policies or quarterly financial results.

Saudi Telecom STC stock represents one of the most traded stocks in the Saudi market, due to its large size and high liquidity. The number of the company's shares is approximately 1.9 billion, giving it the capacity to absorb large trades without sharp price fluctuations. During the period between 2024 and 2025, the stock maintained stable performance with a tendency to grow, as its price ranged between 50 and 55 Saudi Riyals in mid-2025. The company's market capitalization is close to 100–110 billion Riyals, keeping it among the largest listed companies. The stock witnessed an increase of about 8–10% during 2024, supported by strong financial results and regular dividend distributions. Investors are interested in indicators such as trading volume, liquidity, and performance comparisons with the market and the telecommunications sector. Despite the continuous growth, investors should be aware that the stock's performance is linked to multiple factors such as the company's periodic results, regulatory changes, and competition in the sector.

The Saudi telecommunications sector features a quasi-monopolistic structure dominated by three main companies: Saudi Telecom STC, Etihad Etisalat (Mobily), and Zain Saudi Arabia. STC holds the largest market share, with estimates indicating that its share ranges between 50-60% of mobile service subscribers. The market is witnessing strong competition in offers, prices, and the development of digital services, especially with the increasing reliance on high-speed internet and 5G services. Although the market is relatively saturated in traditional telecommunications services, growth opportunities remain in digital services, cloud solutions, and the Internet of Things. The Saudi government supports the telecommunications sector through digital transformation initiatives and infrastructure development, as part of Vision 2030, creating an encouraging environment for investment and innovation. However, the sector is subject to strict regulations from the CITC, which focuses on enhancing competition, protecting consumers, and improving service quality.

Saudi Telecom STC stock stands out as a sector leader in terms of market capitalization, revenue, and net profit, clearly surpassing its main competitors Mobily and Zain Saudi Arabia. While STC's market capitalization is around 100–110 billion Riyals, Mobily and Zain Saudi Arabia have significantly lower values. Additionally, STC's profit margins are higher than those of its competitors, as evidenced by the profit growth rate of 85.7% in 2024 compared to previous years. STC benefits from a broader customer base and deeper investments in modern technologies, such as 5G and cloud computing. Meanwhile, competitors are striving to enhance their market shares by offering competitive pricing and expanding data services. Despite the competitive environment, STC remains capable of maintaining its leadership thanks to its strong brand, diverse services, and strategies for innovation and expansion.

STC follows a comprehensive growth strategy focused on digital transformation, diversifying income sources, and geographical expansion. Key aspects of this strategy include developing 5G networks across the Kingdom, investing in cloud computing technologies, and providing Internet of Things (IoT) solutions and digital financial services. The company also seeks to strengthen its local and international partnerships and engage in quality investments in technology and digital content. STC aims to localize technology and provide innovative services to businesses and institutions, focusing on improving customer experience and operational efficiency. Growth plans also include expanding into new regional markets through acquisitions or strategic partnerships, enhancing its opportunities for additional revenue and sustainable growth.

The dividend policy of Saudi Telecom Company STC is of great interest to investors, as the company adopts a clear approach to distributing regular and generous cash dividends. In 2024, the General Assembly approved a special cash dividend of 20% of capital, in addition to quarterly distributions of 5.5% each quarter during 2025. This amounts to a total annual yield close to 11% on the nominal value of the share, one of the highest yields among companies listed in the Saudi market. The company determines distributions based on its financial results, available liquidity, and future investment plans. This policy is a key attraction for STC stock among investors seeking stable income and financial stability. However, any future changes in the dividend policy should be monitored, especially in light of market fluctuations or changes in the company's strategy.

Saudi Telecom Company STC has witnessed a series of positive developments during the period between 2024 and 2025. Among the most notable is the continued growth in quarterly profits and stable dividend distributions, as the company announced cash distributions of 5.5% for both the first and second quarters of 2025, in addition to a special distribution of 20% for 2024. On the business front, one of its subsidiaries won contracts for maintaining communication networks in major government projects, and it launched initiatives to develop artificial intelligence and cloud computing services. STC also continued its efforts to expand 5G network coverage and improve high-speed internet services. On the regulatory front, the company benefited from updates to the CITC policies regarding service quality improvement and internet pricing. These developments reflect the company's dynamism and its ability to adapt to market demands and keep pace with the latest technologies.

The Saudi government, represented by the Public Investment Fund, is the largest shareholder in Saudi Telecom Company STC. The government holds a strategic stake that ensures the company's stability and supports its developmental plans, while the rest of the ownership is distributed among institutional investors, local and international investment funds, as well as individual investors. The main ownership ratios are disclosed periodically through the company's reports published on the Capital Market Authority and Tadawul websites. This structure enhances investor confidence in the company's sustainability and its ability to execute its future projects, while also providing flexibility in attracting foreign and local investments. Transparency in disclosing shareholders and management policies is one of the strengths that support the company's reputation in financial markets.

The Saudi telecommunications sector, and STC in particular, faces several challenges, most notably the high saturation in the traditional telecommunications market and increasing competition for internet and data services. However, opportunities arise in expanding 5G services, cloud computing, and the Internet of Things, as demand for integrated digital solutions for individuals and businesses increases. STC's investments in developing advanced infrastructure and artificial intelligence technologies represent a driver for future growth, while regulatory and competitive changes pose challenges that require flexibility and innovation in service delivery. Managing operational costs while maintaining high service levels and continuing to diversify income sources to address any potential slowdown in traditional telecommunications services are also challenges.

Saudi Telecom Company STC plays a pivotal role in supporting the national economy, as the telecommunications sector contributes about 1.4% to the Kingdom's GDP. STC is at the forefront of companies supporting the initiatives of Saudi Vision 2030, especially regarding digital transformation, developing smart infrastructure, and supporting innovation in technology and telecommunications. The company contributes to major national projects such as smart cities, e-learning, and digital health services. It is also a key partner for the government in initiatives to localize technology and enhance the efficiency of digital services. Through its regional and international expansion, STC also contributes to enhancing the Kingdom's position as a major center for telecommunications and technology in the region, positively impacting the national economy and business environment.

Investors and followers of the Saudi stock market should always refer to official sources such as the Tadawul website and the Capital Market Authority, in addition to specialized financial platforms like Argaam, to obtain the latest financial data and prices. Quarterly and annual reports reflect the company's true performance and help assess indicators such as profits, revenues, distributions, and liquidity. The company's disclosures also provide important information about growth strategies, risks, and future projects. Continuous reading and objective analysis of financial data enable investors to understand market dynamics and make informed decisions based on accurate information. It is important to avoid relying on rumors or unofficial sources and to ensure the role of a licensed financial advisor is activated in any investment decision.