Saudi Telecom Company (STC) is planning to set up a fully-owned data connectivity company with a total investment of 3.8 billion riyals ($1 billion) in a move that aims to establish Saudi Arabia as the region’s digital hub connecting Asia, Africa, and Europe.
The new company, which will specialise in datacenter hosting, international and regional connectivity, will have an initial capital of 100 million riyals, which will be financed by STC from its own resources, the telecoms provider said in a filing to the Tadawul bourse.
Once set up, STC will transfer its data centers, international submarine cables and international points of presence assets to the new company, whose initial valuation amounted to approximately 2.1 billion riyals as of December 2021.
Further, the new company will inject 1.7 billion riyals as additional investment, which brings the total investment to 3.8 billion riyals.
"These assets and investments will be subject to a detailed evaluation at a later stage in order 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 statement said.
STC expects the data company will boost Saudi Arabia’s current position as the region’s digital hub connecting Asia, Africa and Europe, leveraging Saudi Arabia’s geographical location at the heart of the Middle East.
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, Arabian Internet and Communications Services Co., raising nearly $1 billion in an IPO last year.
(Reporting by Brinda Darasha; editing by Daniel Luiz)
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