\x

STC’s Business
Environment Done by:
1-Alia Muhammed Al-Morqtan
ID: 442009017

2- Alia Khaled Yamani

ID:443000696

3- Orjwan Abdullah Allahyani

ID:443006821

4-Retal mamdouh alkutbi

ID:443007355

5-Nawal Fawaz Alqurashi

ID:443016991

1
 Table of Contents

Introduction 3
Company Overview: 3
Products of STC: 4
Competitors of STC: 4
STC’s organizational structure 5
Analyzing the structure of STC 6
SWOT Analysis: 8
Strengths: 9
Weaknesses: 9
Opportunities: 10
Threats: 10
PESTEL Analysis: 11
Political Factors: 11
Economic Factors: 11
Social Factors: 11
Technological Factors: 12
Environmental Factors: 12
Legal Factors: 12
Conclusion: 13
Reference 14

2
Introduction
The Saudi Telecom Company (STC) is a prominent figure in the telecommunications landscape of
the Middle East and beyond. Operating for over two decades, it has established itself as a regional
powerhouse with a diverse service portfolio, extensive network reach, and a staggering customer
base. Yet, with the dynamic nature of the telecoms industry, it is crucial to delve deeper into its
internal and external dynamics. This research aims to do just that, employing a SWOT and
PESTEL analysis framework to scrutinize STC's strengths, weaknesses, opportunities, and threats,
alongside the political, economic, social, technological, environmental, and legal factors shaping
its journey. Through this comprehensive examination, we hope to illuminate the strategic path
forward for STC and ensure its continued success in the ever-evolving world of
telecommunications.

Company Overview:
The Saudi Telecom Company began its journey as a
Saudi Joint Stock company. It acquired the Telegraph
and Telephone division of the Ministry of Post,
Telegraph and Telephone along with its components
and administrative facilities. As a public company, it
offers a wide range of services and has a customer
base of over 160 million people worldwide. With a
large market capitalization and total revenue, it is the largest company in the Arab region,
employing a staggering number of 17000 individuals. STC has been operating for 24 years since
1998 and has expanded its business operations to include countries such as Saudi Arabia, Kuwait,
Malaysia, and more.

Quick Stats on STC

Founder Ministry of Saudi Arabia
Year Founded 1998
Origin Saudi Arabia
No. of Employees 17,000+
Company Type Public
Market Cap $60.47 Billion (2022)

3
 Annual Revenue $15.7 Billion (2020)
Net Income/ Profit $2.93 Billion (2020)

Products Of STC:
o Mobile Computing
o Internet Services
o Television Services
o Digital payment and provider

Competitors of STC:
1. Mobile and Fixed-Line Services and Internet Services:

 Main Rivals:
Mobily (Etihad Etisalat) is a telecom company that has a strong brand recognition and a wide-
reaching network. Their fixed-line and mobile services compete directly with STC in most areas.
Zain KSA is another major player in the telecom industry, with a significant market share in
mobile subscriptions and competitive data plans.

 Emerging Players:
Virgin Mobile KSA is a great option for those looking for innovative and customizable mobile
plans that cater to younger generations and budget-conscious users. Additionally, smaller players
like Friendi Mobile, who are MVNOs (Mobile Virtual Network Operators), are gaining traction in
the market due to their niche offerings and flexible packages.

2. Digital Payment Services:

 Main Rivals:
The national payment network, Mada Payments, is widely adopted, especially for government
transactions and e-commerce. Major banks such as NCB and Al Rajhi offer competitive mobile
wallets and online payment services alongside STC Pay.

 Emerging Players:
It's interesting to see how fintech startups are revolutionizing how we make payments with their
innovative mobile payment solutions with attractive features and user-friendly interfaces. On the
other hand, global platforms like PayPal are also gaining popularity, especially for cross-border

4
transactions. It's fascinating to witness how these players are changing the landscape of the
financial industry.

STC’s organizational structure:

5
Analyzing the structure of STC:
Structure: A Colossus Spanning Diverse Domains

With subsidiaries in the areas of mobile (Al-Jawal), landline (Al-Hatif), internet, enterprise
solutions, and even digital payments (STC-Pay), STC has a vertically integrated organizational
structure. This centralized architecture gives them:

 Control: Effective decision-making throughout the whole range of their activities,

consistent branding, and streamlined resource allocation.
 Synergy: Possibilities for cross-selling between services, such as combining internet and
mobile plans or providing business clients with all-inclusive packages.
 Flexibility: Owing to their internal resources and skills, they can expand and adapt into
new markets like cloud computing, the Internet of Things, and digital entertainment.

Size: A Market Leader with Unmatched Reach

With a vast customer base, STC unquestionably dominates the Saudi telecom industry. This
translates to:

 Economies of Scale: large-scale, less expensive acquisition of network equipment and

infrastructure upkeep that enables them to sustain profitability and competitive pricing.
 Dominant Presence: They have an advantage in attracting and retaining customers due to
their well-established infrastructure and well-known brand.
 Investment Power: Due to their significant income, they can make significant investments
in R&D, which enables them to continuously innovate and improve their services.

Scope: National Champion with Global Aspirations

Due to its investments in telecom companies in the Middle East and Africa, STC has a presence
even outside of Saudi Arabia. This regional presence offers access to new consumer segments and
growth potential while diversifying revenue streams and reducing reliance on the home market.

• Encourages Knowledge Sharing: By working together with regional partners, they may embrace
leading-edge technology, share best practices, and remain on the cutting edge.

• Boosts Brand Image: Their global reach enhances their image as a leader in the area and
promotes them as such.

Business Objectives: A Multifaceted Vision

6
With these benefits in mind, STC has set high and varied goals for its business:

• Market Dominance: Upholding their dominance in the Saudi market via constant innovation and
service offering expansion.

• income Growth: Investigating new income streams outside of standard telecom services by
utilizing their scale and broad portfolio.

• Diversification: Investing in rapidly expanding fields such as cloud computing, IoT, and digital
services to ensure success in the future.

Products/Services: A Symphony of Options

STC's extensive portfolio meets a range of demands, including:

• Mobile Plans: An extensive selection of postpaid and prepaid plans that meet the needs of a wide
spectrum of customers, from data-hungry to budget-conscious.

• Internet packages: To meet the demands of both homes and businesses, there are alternatives for
fast fiber optics and reasonably priced ADSL subscriptions.

• Fixed-Line Services: Conventional landlines equipped with conference calling and other value-
added capabilities.

• TV Bundles: All-inclusive entertainment bundles that include internet, TV channels, and

streaming services.

• Enterprise Solutions: Customized services for companies that include security systems, cloud
computing solutions, and dedicated internet connections.

• Value-Added Services: Innovative solutions that improve consumer loyalty and experience, such
as digital entertainment platforms and mobile payments.

The Intertwined Threads: A Tapestry of Success

The cornerstone for stc's ambitious business aims and various product offerings is its exceptional
structure, size, and breadth. Their large size gives them economies of scale and investing strength,
and their centralized approach makes control and resource allocation easier. Their geographical
reach encourages knowledge exchange and diversifies income streams, which drives ongoing
innovation and growth. With its complex array of benefits, stc is positioned to be a major player in
the Saudi telecom market and beyond.

7
We are able to comprehend the complex relationships between STC's size, breadth, business
goals, and service offerings, which help us to better appreciate this telecom behemoth's strategic
capabilities. It would be interesting to watch how STC maintains its leadership position in the area
and shapes the Middle East and Africa's telecom market as it moves forward by utilizing its
advantages and changing with the times.

SWOT Analysis:

SWOT Analysis is a valuable methodology for devising business strategies for both nascent and
established enterprises. This technique is employed to evaluate a company's competitive position
by assessing its strengths, weaknesses, opportunities, and threats. In the case of STC, undertaking
a SWOT analysis could lend itself to identifying and leveraging the organization's strengths while
addressing any deficiencies or challenges. By doing so, STC can develop and implement effective
and efficient business strategies aligned with its overarching goals.

8
 Strengths of STC

• Wide Spread Distribution Network: Considering that it has been in operation for 24
years, it has a well-established market in the Middle East and the Kingdom of Saudi
Arabia. It is trying to increase its market share by growing in a number of other areas.

• Service Offerings: It provides a vast array of services to its clients, including network
services, pay apps, internet, broadband, and much more.

• Brand Value: Its brand value is growing in the Arab and international markets, where it
is strong. Regarding internet and telecom services, Saudi Telecom Company is a well-
known name in the Middle East and the Kingdom of Saudi Arabia.

• Advantage Over Competition: Its rivals are both established and up-and-coming.
Because of the variety of services, they provide and their high level of service quality, it
has a significant advantage over its competitors.

• Longevity: Founded in 1998, the company has been providing services to clients for
about 24 years, and it has long-term goals for the years to come. There are plans to expand
internationally. It recently declared its intention to launch a business focused on regional
and global connections, as well as data center hosting.

 Weaknesses of STC

• Limited Presence: The business is not very well-known around the world. It still lacks
success in the international market. The Kingdom of Saudi Arabia and the Middle East
now serve as the primary bases for Saudi Telecom Company.

• Assets Line: The business's profitability is dropping. Decreased asset liquidity may cause
issues for the business and affect profitability.

• Moderate Success Beyond its Core Business: Despite being one of the top companies in
its sector, STC has had trouble expanding into other product categories given its current
organizational culture.

• Major Revenue Dependency on Saudi Arabian Market: STC derives a significant portion
of its revenue from Saudi Arabia, where it maintains its main office and offers services
more effectively. It doesn't get much money from outside Saudi Arabia as it depends
mostly on that country's market.

9
 Opportunities for STC
 Global Expansion: The business can grow further in the more populous Asian and
African nations, which could lead to a larger clientele.
 Technology: As technology advances quickly, better, quicker, and more effective
services may be created. The Saudi Telecom Company ought to embrace emerging
technology and create products that would enable them to outperform their rivals by
providing superior services and goods.
 Modernization: A significant chance to boost company arises from the growing
number of smartphone users. This might be accomplished by making cellphones more
widely available at lower prices or by promoting their advantages.
 Rise of 5G: As 5G technology becomes more widely used in place of 4G and 3G
technology, there will be significant economic opportunities for the organization.
Major telecom companies are starting to roll out 5g globally, which might be a game-
changer for them in terms of growing their user base and providing speedier services.
 Reasonably priced: By providing more flexible options, the business may attract
clients with lesser incomes and outbid its competitors for the top spot in the market
share. Additionally, by providing superior services at reasonable costs, they might
pique people's attention with a range of alluring packages.

 Threats to STC

• Termination Charges: The company's revenues may be impacted by the elimination of

termination fees.

• Global Pricing: A rise in data costs on a worldwide scale may have an impact on the
clientele of the business. Offering more affordable plans becomes challenging for the firms
as their profit margins decline because to power outages and rising data costs.

• Competition: a rise in rivals poses a serious risk. Better deals for clients are the result of
new rivals. The oldest businesses in the industry, such as Saudi Telecom Company, may
face threats from new rivals that offer clients modern technologies.

10
PESTEL Analysis:

 Political Factors:

• Government stability and policies: STC is greatly influenced by laws, rules, and license
specifications pertaining to the telecommunications industry. The goal of recent programs
like Saudi Vision 2030 and ICT Strategy 2023 is to accelerate infrastructure development
and digital transformation, which presents both possibilities and obstacles.

• Regional wars and geopolitical tensions: These can influence consumer confidence,
investment choices, and supply chain disruptions.

• rules pertaining to cybersecurity and data privacy: As worries about these issues have
grown, rules have become stiffer, raising the cost of compliance and perhaps harming
STC's data-driven services.

 Economic Factors:

• Economic expansion and consumer spending: Saudi Arabia's economic expansion

propels the country's need for telecommunications services. Economic downturns,
however, may result in lower expenditure and pressure on prices.

• Inflation: Growing inflation might impact consumer affordability by driving up

operational expenses.

• Exchange rates: Variations in exchange rates may affect the earnings and overseas
activities of STC.

 Social Factors:

• Changing demographics: Young, tech-savvy Saudis are driving up demand for fast
internet and cutting-edge digital services.

11
 • Social media usage: STC has had to adjust its customer service and marketing strategies
as a result of the considerable influence social media has had on consumer expectations
and behavior.

• Education and digital literacy: Clients that possess greater education and digital literacy
may request more advanced services.

 Technological Factors:

• Quick technical progress: With 5G, IoT, cloud computing, AI, and other future
technologies, the telecoms sector is always changing. To remain competitive, STC must
make investments in innovation and infrastructure.

• Digital transformation: As the economy moves toward being a digital one, STC will have
the chance to grow and add new services.

• Technological convergence: As the media, technology, and telecommunications sectors

merge, competition and joint venture opportunities increase.

 Environmental Factors:

• Energy usage and climate change: STC is under pressure to implement sustainable
practices and lessen its carbon footprint, which might result in higher expenses and the
need for operational adjustments.

• E-waste management: STC must put in place appropriate recycling and disposal systems
since responsible e-waste disposal is becoming in important.

 Legal Factors:

• Antitrust laws: To maintain fair competition in the market, STC must abide by antitrust
laws.

• Laws about data protection and privacy: Adhering to these regulations is essential to
upholding customer confidence and preventing legal problems.

• Intellectual property rights: STC's inventions and competitive advantage depend on the
protection of intellectual property rights.

12
 Conclusion
Our analysis of STC reveals a picture of a company entrenched in both strengths and challenges.
Its extensive network, brand recognition, and diverse service offerings provide a sturdy
foundation, while internal limitations and external pressures demand strategic attention. As STC
navigates the dynamic telecoms landscape, capitalizing on its strengths like technological
adaptation and global expansion will be crucial. Addressing weaknesses like over-reliance on the
Saudi Arabian market and diversifying its service portfolio remain vital aspects of future success.
The opportunities presented by embracing 5G technology, forming strategic partnerships, and
catering to evolving customer needs hold immense potential while emerging threats like rising
data costs and disruptive technologies necessitate agility and innovation. In addition, a telecom
colossus woven from size, structure, and global vision, dominates Saudi Arabia and aims to
reshape the region's landscape. Watch this multifaceted giant innovate, diversify, and lead the way
into the future. Ultimately, STC's journey forward lies in a delicate balance between leveraging its
existing strengths, tackling internal weaknesses, and proactively responding to the dynamic
external environment. By embracing a future-oriented vision and adapting to the ever-shifting
landscape, STC can not only retain its leading position in the region but also emerge as a global
force in the ever-evolving world of telecommunications.

13
 References
 Al-Saggaf, A., & Habib, O. (2020). Cybersecurity challenges and regulations in Saudi
Arabia. Computer Law & Social Change, 77(2), 379-402.
 Aljohani, A. A., & Elhag, M. S. (2020). The impact of government regulations on the
telecommunications sector in Saudi Arabia. Journal of Economic and Social Research,
12(2), 1-12.
 Etihad Etisalat Company - Mobily
[http://www.abc-saudiarabia.com/companies/15137/etihad-etisalat-company-mobily-]
 Etihad Etisalat Co. Mobily announces its annual consolidated financial results for the year
ended 31 December 2022 [https://english.mubasher.info/markets/tdwl/stocks/7020/profile]
 Fitch Solutions. (2023). Saudi Arabia Telecommunications Report.
[https://store.fitchsolutions.com/telecommunications/saudi-arabia-telecommunications-
report]
 Friendi Mobile [https://www.friendimobile.com/en-om?home] (example)
 GSMA Intelligence [https://data.gsmaintelligence.com/]
 International Crisis Group. (2021). Saudi Arabia and the Red Sea: Between Cooperation
and Competition. [https://www.crisisgroup.org/middle-east-north-africa/gulf-and-arabian-
peninsula/saudi-arabia]
 Lebara [https://www.lebara.fr/en/home.html] (example)
 Mada Payments [https://www.mada.com.sa/en]
 Ministry of Communications and Information Technology. (2023). ICT Strategy 2023.
[https://www.mcit.gov.sa/sites/default/files/strategy_summary.pdf]
 National Cybersecurity Authority. (2023). National Cybersecurity Strategy.
[https://nca.gov.sa/files/cscc-ar.pdf]
 NCB Pay [https://www.jncb.com/app/] (example)
 PayPal [https://www.paypal.com/]
 Saudiscoop. (2023, October 26). Mobily Internet Packages Prepaid Postpaid KSA.
[https://saudiscoop.com/tech/mobily-internet-packages-prepaid-postpaid-ksa/]
 Saudi Data and Artificial Intelligence Authority. (n.d.). Personal Data Protection Law.
[https://sdaia.gov.sa/ar/SDAIA/about/Pages/RegulationsAndPolicies.aspx]
 Saudi Vision 2030. (n.d.). [https://www.my.gov.sa/wps/portal/snp/content/saudivision/?
lang=en]
 STC [https://www.stc.com.sa/content/stc-public-store/sa/en/public-store-landing-page/
baity-packages.html]
 STC Fiber [https://www.stc.com.sa/content/stc-public-store/sa/en/public-store-landing-
page/baity-packages.html]
 Tamara [https://tamara.co/] (example)
 Virgin Mobile KSA [https://www.youtube.com/virginmobileksa]

14
 Wired. (2023, July 11). Saudi Arabia's NEOM signs deal to get high-speed satellite
internet. [https://wired.me/science/space/saudi-arabias-neom-signs-deal-to-get-high-speed-
satellite-internet/]
 World Bank. (2023). Financial Inclusion in Saudi Arabia.
[https://datatopics.worldbank.org/financialinclusion/country/saudi-arabia]
 World Bank. (2023). Middle East and North Africa Economic Update, October 2023:
Navigating Uncertainty. [https://www.worldbank.org/en/region/mena/publication/middle-
east-and-north-africa-economic-update]
 Zain KSA [https://www.zain.com/en]
 Zain Saudi Arabia [https://www.zain

15