Saudi Arabia’s Public Investment Fund (PIF), among the largest sovereign wealth funds in the world with total estimated assets of at least $500 billion, and Saudi telecommunications company STC Group have signed a joint venture agreement to establish a new company specializing in the Internet of Things (IoT).
The company ownership will be 50% PIF and 50% STC. It will be headquartered in Riyadh.
The JV agreement is part of PIF’s and STC efforts to drive the rapid growth of IoT across Saudi Arabia and to make the country a regional centre for the Middle East and North Africa. The new company aims to leverage the expertise and technology of existing IoT partners and expand to become a ‘one stop shop’ for IoT solutions.
It also aims to contribute toward the realization of Saudi Vision 2030, a strategic framework to reduce Saudi Arabia's dependence on oil, diversify its economy, and develop public service sectors such as health, education, infrastructure, recreation and tourism.
The company is expected to be a technology-agnostic service provider with a solutions offering in the smart industrial manufacturing sector, smart logistics transportation sector and smart cities. In addition to providing IoT solutions, the company will also help create an ecosystem by providing consulting, implementation and training support as well as facilitating innovative funding models to support businesses in their adoption of IoT.
The deal is subject to satisfying the conditions in the JV agreement and obtaining the relevant approvals from the competent authorities.
Local market studies indicate vast growth in the size of the IoT market in the kingdom to, potentially, reach SAR 10.8 billion (about US$2.9 billion) by 2025 with an annual growth rate of 12.8%.
STC has invested aggressively in building its 5G and NB-IoT connectivity infrastructure, with more than 15,000 communication towers and a coverage rate of more than 85% of urban areas.