Dear Shareholders,
stc cemented strong foundations in the last year, which paved the way to achieve growth and value creation; resulted in stc being one of the largest companies in terms of market capitalization. Global macro trends and industry disruptions are challenging telecom operators in their core business, while stc on the other side was able to find new opportunities across digital, new technology, increased government spending to double down its investments in these promising areas, which would enable digital transformation across all sectors.
stc has made significant strides due to its DARE 2.0 strategy, laying strong foundations for growth across commercial (gaming, media, smart home), business (cyber, cloud, mega projects, IT), wholesale (data hub) and new markets (Kuwait, Bahrain, digital banking, TAWAL and Aqalat).
Today, stc and its affiliates command leadership across many aspects of telecom and technology, showcasing a leading role in driving the Kingdom’s digital transformation journey. In 2022, we furthered our expansion in scale and scope, launching cutting-edge technologies and innovative new businesses that will propel consumers, companies, and the public sector in unlocking the digitization benefits. As a result, stc Group witnessed an organizational evolution which is deemed necessary given our innovative business model. In this regard, stc launched a fit for growth operating model that is geared to foster value creation across stc’s business lines.
stc Group increased its share capital from SAR 20 billion to SAR 50 billion increased its share capital by SAR 30 billion
the largest capital increase in the history of Saudi Capital Market - through a bonus share issuance. The increase in stc’s capital will support achieving its growth and expansion strategy along with maximizing its shareholders’ return thru increasing and diversifying stc’s investments and seizing the expected growth opportunities in the telecommunication and technology sector in the Kingdom of Saudi Arabia and the region.
Furthermore, stc Group continues to collaborate with significant local and international businesses to bring world-class capabilities and technologies to Saudi Arabia, such as founding the General Cloud Computing Company for Information Technology “Alibaba Cloud” in partnership with Alibaba Cloud, eWTP Arabia Capital, Saudi Company for Artificial Intelligence (SCAI), and the Saudi Information Technology Company (SITE). Alibaba Cloud will develop the first hyper-scale cloud in the region, contributing to the growth of the Kingdom’s digital infrastructure and information security. Along the spirit of collaboration with the Public Investment Fund (PIF), we achieved a notable milestone by establishing Internet of Things Information Technology Company “iot squared”. The establishment of iot squared business is in line with the expected growth and increasing demand for Internet of Things services and products, it aligns with stc’s growth strategy, and Saudi Arabia’s Vision 2030 for a connected nation.
In addition, 2022 also underlined number of significant achievements including launching Digital Centers for Data and Telecommunications Company “center3”, the Middle East and North Africa region’s world-class digital connectivity hub, which owns digital infrastructure assets, including data centers and submarine cables, capitalizing on Saudi Arabia and the region’s strategic location at the crossroads of east and west, center3 supports stc in increasing connectivity in European, Asian and African markets. stc Group signed an agreement with Huawei to localize the manufacturing of data center equipment, embedding our ability to drive the Kingdom’s technology leadership.
Part of stc Group’s achievement this year was enhancing its network performance by expanding the 5G network coverage during the pilgrimage season, providing reliable network coverage for the world’s highest traffic during Hajj, helping provide digital medical solutions for pilgrims, using the “Holo doctor” technology, and providing security monitoring services. stc Group also stood out during the “stc Formula 1 Saudi Grand Prix” with extensive 5G coverage enhancing customers’ experience. Another key milestone was our progress in expanding our submarine cable infrastructure. In July, we announced a partnership with TSSA, a Greek provider, to build the “East to Med Data Corridor” cable, linking Europe with Asia via Saudi Arabia and delivering high-speed connectivity with the Kingdom at its center. Subsequently, in August 2022, we landed the “Saudi Vision Cable” (SVC), the first high capacity, high-speed submarine cable in the Red Sea, which underpins our regional digital hub positioning and will provide seamless connectivity for our customers.
We have expanded our international footprint through the strategic acquisition of Egypt’s Giza Systems, and TAWAL’s acquisition of Pakistan’s AWAL Telecom. Such acquisitions expand our reach into both markets and furthered our goal in providing world-class connectivity to enrich lives. At stc, we have an obligation to operate in a sustainable manner to ensure our future performance will meet high standards of sustainability in communities in which we operate. Sustainability is a key part of our Group strategy and a main driver to our 2025 objective of being a digital and telco leader, enabling society and economy to thrive, in KSA and beyond. We are committed to maximizing economic value, creating positive environmental impact, and supporting progressive social development. stc Group is committed to reducing carbon emissions to reach net zero carbon emissions by 2050.
stc Group also continued to play its pivotal part in promoting and developing local content through Rawafed Program; the program aims to develop the national economy by localizing jobs, empowering women, and growing support for local manufacturing. stc Group has been committed to increasing the number of female participants in its sector.
Female participation in stc’s workforce increased by 224% between 2018 and 2022 with ambitions to continue this trajectory in the coming years.
The achievements over the years for stc Group and its subsidiaries led to elevating stc’s brand value, which doubled from SAR 24.8 billion (USD 6.6 billion) in 2018 to develop the national economy by localizing jobs, empowering women, and growing support for local manufacturing. stc Group has been committed to increasing the number of female participants in its sector. 224% Female participation in stc’s workforce increased by between 2018 and 2022 SAR46.1 billion (USD 12.3 billion)in 2022 according to Brand Finance.
In conclusion, I am proud of the contribution stc Group makes to driving digital innovation and progress, achievements that would not have been possible without our incredibly dedicated and hardworking team, to whom I extend my gratitude for all their efforts. I would also like to thank our customers, shareholders, and partners for their continued support. Going forward, I would also like to assure you that stc Group remains focused on realizing its ambitious vision, aligned with Saudi Vision 2030, to provide excellent connectivity for the Kingdom and beyond, drive digital transformation, and deliver sustainable growth to create value for our shareholders and society.
Olayan Mohammed Alwetaid
Chief Executive Officer (Group CEO)
