PIF and stc ink IoT joint venture in KSA
Saudi Telecom Company (stc) has signed a joint venture agreement with Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, to create a new IoT company.
The new joint venture comes as the expected growth and increasing demand for Internet of Things services and products continues to rise. The collaboration also aligns with stc's growth strategy, and Saudi Arabia's Vision 2030 for a connected nation, the country for which the new company will be headquartered.
The new company’s will start off with an initial capital amount of SAR 492 million ($131.1 million), with both stc and PIF holding a 50% ownership stake. stc will finance its share of this investment, totalling SAR 246 million ($65.5 million), from its own resources.
However, the joint venture agreement allows for an increase in capital, of up to SAR 900 million ($239.9 million), based on the company’s business requirements, at the end of the 3rd financial year, subject to relevant authorities and regulatory approvals.
The deal itself is subject customary regulatory approvals and completion of the conditions in the joint venture agreement as well as commencement of its commercial operation.
As the PIF the largest shareholder in stc and holds 64% of the shares in the company, the transaction is subject to a vote to authorize it from stc’s general assembly.
The following stc board of directors members have indirect interest as also members of the PIF; Khaled H. Biyari, Yazeed A. AlHumied, Rania M. Nashar, Arndt F. Rautenberg and Sanjay Kapoor.
In related news, stc recently launched two new new Internet Exchange Points (IXPs) in Riyadh and Dammam, Saudi Arabia, in partnership with London Internet Exchange (LINX).
At the same time, Virgin Mobile KSA has extended its access agreement with STC, under which STC will continue to provide MVNO services "along with some new terms" which reflect the ongoing shift to digital services.