STC reveals plans for the future of digital communications technology in Saudi Arabia

STC was established in 1998 and boasts about 100 million customers worldwide. It provides services to customers through a fiber-optic network that spans 158,000km across Asia, the Middle East and Europe. 

In Saudi Arabia, STC operates the largest modern mobile network in the Middle East, covering more than 99 percent of the country’s populated areas, in addition to providing 4G mobile broadband to about 85 percent of the population across the Kingdom of Saudi Arabia.

Aligning with Saudi Arabia’s ambitious Vision 2030, the company’s strategy aims to be at the heart of a digital society, contributing to both its development and a better future. Ambitious? Certainly. Possible? Without a doubt, says Al Nasser of the company whose influence ripples are felt far beyond its immediate geographical borders.

STC annual report 2018 reveals revenue increases of 2.6 percent and net profits of SAR10.78bn ($2.87bn). How do you think the next year and few years will go?

We believe in our ability to achieve sustainable growth and to maximise STC shareholders’ value in the future by continuing the strong performance the company has achieved in the past. Our clear strategy takes into account the rapid changes in telecommunications, as well as the digital transformation that the world is witnessing. STC will continue its strategy to expand investment in different domains in order to diversify its sources of income from both core and non-core business and will continue a comprehensive programme to improve operational efficiency.

Your DARE strategy outlines four key pillars for growth – what are these?

Traditional telecom services have become commodities and there is a constant pressure on top line and profitability in all telecom markets around the world. High-capital intensity remains a challenge especially when more capital is required to invest in new technologies in the future. ICT is changing rapidly and value, including customer ownership, is shifting upstream towards digital services. Looking forward, for telecom players to keep their relevance they must evolve to be become digital players and commercialise new revenue streams.

STC has based its strategy on several factors: KSA Vision 2030 – a desire by shareholders for growth, revolutionary changes in the telco industry, and on the company’s existing strengths and capabilities. Our aim is to pursue targeted value-creating opportunities to pioneer the digital transformation of KSA and the MENA region.

The four themes of our DARE strategy can be summarised as: Digitisation, Accelerating performance of our existing assets, Reinvent customer experience to world-class standards, and Expand aggressively. They are an integrated, interdependent set of choices that are essential for the achievement of our vision.

While we pursue our growth journey, it is important to create more value from our existing assets (i.e.) our employees, brand, customer base, technology assets, and business partners, to ensure we have enough resources to invest in future opportunities. With an ever more sophisticated customer, it is essential to provide a word-class omni-channel experience. We are doing this through simplification and personalisation of customer interactions, digitising sales channels, and investing in network quality of experience. Then comes the most critical enabler – Digitisation. In Digitisation, our focus is on creating a data-driven organisation, building agile technology and IT infrastructure, and digitising key internal processes.

Which of these is most important to you, and which one are you most involved in?

Given their interdependence, all four pillars are equally important. If, I really had to choose, then I would say that the two most critical elements are Digital and Cultural Transformation. In the last five years, STC has made significant progress from a traditional incumbent telco operator to a forward-looking ICT player, due to the leadership’s focus on cultural transformation.

Now we are focusing on making the next leap towards becoming a leading digital player in the region through Cultural Transformation 2.0 and an ambitious digital transformation programme. Digital will define the way we do business, the way we serve our customer, the way we cooperate and collaborate internally and externally. Cultural Transformation 2.0 will see collaboration beyond traditional boundaries and extending to ecosystems, diversity and inclusiveness, appetite for calculated risk-taking, and developing a strategic digital workforce.

It is a challenging journey but we are confident in our abilities with support of the ecosystem that we are shaping for the betterment of the industry, KSA and other regional economies.

What are the key strengths within STC and how do they tie into your goals?

We are well equipped with state-of-the-art-technology and infrastructure as well as a diverse set of human capital skills and knowledge, which are crucial in any company’s success. As a result, STC is playing a major role in the kingdom’s National Transformation Plan 2020 and Vision 2030 as the country’s digital enabler.

The company invested heavily in its infrastructure and technological capabilities in order to serve B2B customers. Those investments have already started to pay off and we believe their positive contribution will continue, as the whole country is moving towards a digital transformation that requires an innovative solutions and technology, which a company like STC possess.

As for B2C, although we have witnessed a marginal growth recently, consumer business is still facing challenges given the market is saturated. However, one of STC’s DARE strategy main pillars that falls under the letter “R” is to reinvent the customer experience. We believe in the importance of improving the customer’s journey either through their physical visits or by using the new innovative digital services, which will enable STC to maintain its position as the preferred telecom service provider.

STC now also invests in other companies in Saudi Arabia and beyond. How do they relate back to growth in your DARE Strategy and for diversification?

Well, those investments are mainly related to both letters “A” and “E” in our DARE strategy. I believe the best way to answer this question is by giving few examples. We have established a towers company TAWAL, that is in line with our strategy to accelerate the performance of core assets.

TAWAL has already started its commercial operations in 2019 and we expect it to add a positive value to STC’s business in the future. Initially, it will focus on managing STC’s towers and we believe that there is a great opportunity to work and collaborate with other operators regarding tower management. This step represents a strategic national initiative to maximise the return on investments for telecom infrastructure and it will bring TAWAL one step closer to its ultimate objective of becoming a leading regional mobile infrastructure service provider.

Further, part of the company’s strategy and ambition is to expand aggressively in new domains that can enable the digital transformation and enrich the customers’ experience. Hence, DARE strategy is well aligned with the information revolution that is taking place globally through new technologies such as Internet of Things, managed services, systems integration, cloud computing, information security, big data analytics and artificial intelligence. STC Solutions (STCS) is considered the ICT arm of STC where their vision and mission is to provide innovative technology solutions that enable B2B customer to succeed in evolving market needs.

More importantly, STC has the financial and technical capabilities to capture opportunities that will contribute to the Group’s growth whether through new licenses or acquisition.

Sustainability is integral to your business plan and STC echoes the initiatives of industry players around the world that have CSR and sustainable practices embedded into their business strategies. Do you see sustainability as a business opportunity?

Absolutely. It’s an opportunity as well as a responsibility. Sustainability is about managing our economic, environmental and social performance in a way that maximises value for society while benefiting our business.

As examples, if, through our services, we help bring more people into the digital economy, we create benefits for them and we grow our business.

If we help companies digitise their activities, we save them money and we help them reduce their environmental impacts while growing our business.

If we invest in energy efficient equipment for our networks, we can begin saving money on energy costs very quickly while reducing our environmental impact. In our biggest market, Saudi Arabia, we are fortunate to have the Vision 2030 which identifies national sustainable development priorities.  If we enhance our services to meet those objectives, the entire kingdom benefits and in return, our market thrives. It is in all companies’ interest to invest in sustainable development, but as STC, we are particularly privileged to be able to play a huge role in shaping the future of sustainable development in our markets, and to thrive as a business as a result.

How has STC worked to attracting the best talent?

Driven by our strategic aspiration to be an employer of choice not only at KSA but also at the regional level as well, we at STC are committed to attracting, retaining and developing a pool of talent that is “second to none”  and is diverse along many dimensions through providing a professional platform to incubate young and enthusiastic Saudi men and women  across the kingdom in order to complement 2030 vision. As you are aware, the telecom industry is a fast moving and aggressive industry that dictates on us to leverage the diverse knowledge and experiences of all our employees.

To this end, STC has introduced a number of talent channels and dedicated professional programmes to attract and develop those who are ready to challenge themselves in STC work environment.

There are no women listed in your senior management – is this something that you are working to actively change?

We are committed to having a diverse workforce, simply because we believe it allows us to draw on different perspectives to enhance the quality of our services and enhance our efficiency in delivering those services to our clients. An inclusive work environment encourages different perspectives, and STC welcomes the wide range of experiences and viewpoints that both male and female employees bring to the table.

In our workplace, all STC employees are valued, regardless of their gender and we uphold a zero-tolerance policy for any form of discrimination. Though we have a number of women leading at the middle and executive management level, we aim to have women amongst our top level management.

How have you seen the concept of CSR evolve in Saudi Arabia? Have you had to educate investors about the value of CSR on bottom lines as well as for its own sake?

Based on 2030 vision alignment with SDGs, it is essential today to sustain the business without leaving the society’s needs behind.  The kingdom is moving forward based on the suitability practice that will insure the interest of society a head. CSR based on sustainability practice is becoming an integrated part of how a company operates as they need to demonstrate what they are doing as part of their business for customers, employees and society.