STC

Executive summary
1.1 Background
The Saudi Telecom Company was found on 1998, following by the
Council of Ministers Decree No. 213 dated 23/12/1418 H, approving
of set up a Saudi Stock Company under the name of Saudi Telecom
Company
Accordingly, STC adopted a challenging program aiming to transform
its business from government system to the recognized commercial
business standards. The company has developed clear strategies
focusing on internal re-organization and development of its staff,
enhancement of its internal processes and studying its customers
needs and requirements while continuing carrying out its national and
social duties and responsibilities STC is the leading national provider of
telecommunication services in the Kingdom of Saudi Arabia. The
company is working continuously to fulfill and satisfy the market
requirements, keeping pace with the emerging technologies in the
telecommunications sector and satisfying its customer's needs. STC
has put in its consideration that, this is the way to reinforce its place
and identity in view of a changing world where the role and usage of
telecommunications became more significant .

The Saudi Telecommunication Group provides integrated mobile, fixed

and broadband communications services to over 160 million customers
globally.
Headquartered in Riyadh, Saudi Arabia, Saudi Telecom Company (STC)
is the largest telecommunications company by market capitalization,
total revenue and number of employees in the Arab State region. In the
last few years, STC has gone beyond its local borders to the
international markets, forming a network of businesses and
investments in a number of GCC countries, Asia and Africa. The
company is now present in Kuwait, India, Indonesia, Malaysia, Turkey,
South Africa and Bahrain which has enabled STC to serve a larger
number of customers internationally. The STC services divided into
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three broad categories: Jawal (mobile network), Home (landline

network), and Enterprise services. [Wekepidia Oct 19 & http;// ]

1.2 Mission statement

As leaders in a world of constant change, we strive to exceed our
customers expectations together we reach new horizons
(stc.com,2013)

1.3 Vision statement

To continue to lead in innovation and communications services to
enrich the lives of the consumer

Body
2.1 index

2.2 Environmental analysis (PEST Analysis)

1 | INTRODUCTION
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A PEST analysis is a useful strategic planning to revenue and analyse the impact of the
macro- environment in which the organization operates .

2.1 Political analysis

Saudi Telecom company (STC)

Date:

25/10/2013

Political Factor
Political lawsto establish atelecommunications companyin the Kingdomof Saudi Arabia:
1 . Apply for the establishment of the company (model ) .
2 . Book business name ( if desired commercial partners to use the name of the company
).
3 . Memorandum of Association - Summary of the Memorandum of Association (model)
4 . A copy of the national identity of the partners .
5 . In the event of a foreign investor must obtain a license from the General Authority for
Investment and submit an application to the body .
6 . After approval of the application is referral to the virtue of a notary documentation .
[SaudiTelecomCompanyInformation , Dec 1 & http;//]
Registration procedures the commercial register :
1 . Provide a statement in the contract summary publication of the Official Gazette ( or
villages ) and the ministry's website .
2 . A certified copy of the Memorandum of Association.
3 . Out of bank certificate (in case of cash capital ) .
4 . Partners appointment of the Director 's decision if it is not set in the Memorandum of
Association.)www.mci.gov.sa,2013)
Governmental fees:
The Company assumesallgovernment feeswhichmustfactorthe
contractorpaidbygovernment regulations(residence and work permitandrenovatedand
the consequentdelayfromfinesifthe delay wasdue tothe company,
thefeechangeprofession,feesexit visasandreturn) andunder the terms ofthe provisions
ofthe contract between thecompanyand the worker.(stc.com.sa,2013)
Annual fees (1,200 ) Real up to a maximum of five years . )www.mci.gov.sa,2013)

2.2 Economic analysis

Economic Factor
the general budget There has been a significant improvement on the company's assets
since 2001 to 2006 , raising the size of the total assets of the company to about 46.12
billion riyals from 39.17 billion during the past five years , an increase of 6.95 billion
riyals, ie the proportion of 17.74 per cent over the past five years , the equivalent ratio
3.21 per cent per annum , and this good growth in the assets of any company giant ,
especially since this growth in assets was reflected in the shareholders' equity , which
achieved a leap better than that , it has increased the total equity of 20.47 billion to
34.15
billion , the proportion of 66.83 per cent over the past five years, or 10.78 per cent per
annum , and this rate is excellent by any standards . [SaudiTelecomCompanyInformation , Dec
1 & http;//] Notes that opponents of the company
or liabilities has shrunk so dramatically , while the volume of liabilities in 2001, nearly
18.7 billion riyals reduced this amount to 11.97 billion in 2006 at a time when increased
the size of the assets of 39.17 to 46.12 billion riyals , and this is a good sign , what puts
the company in a safe area of the financial aspects , with the support of the ongoing
liquidity ratio of 126 per cent, flooding 88 per cent cash in 2) revenue and profit : Grown
sales operational by 3.81 per cent last year , 2006, while not exceeding sales 45 billion in
2005 , the volume of sales to 46.12 billion riyals last year, 2006, we must not forget that
these sales jumped from 19.78 billion riyals in 2001, and is reflected in the net profit
operational , which increased by 2.81 per cent last year, rose from 12.45 billion to 12.80
billion
Vertical analysis of financial statements Vertical analysis compares each item and before,
for example , the ratio of cost of sales to sales, the ratio of operating expenses to sales ,
the ratio of liabilities to equity (Alriyadh website, Nov 12 & http:// )

2.3 Social analysis

Social Factor
STC offers different types of products that serve the members of the community to
communicate
with each other and the services the company has a multi-serve all strata of society,
whether with
the owners of the qualifications and experience of high or owners of qualifications and
experience, Ltd. and the company keep pace with all the advanced services in the world
of
technology and communications to attract the largest number of customers, particularly
with the
existence of rival companies, which all of them are keen to provide services with high
quality
and competitive prices to capture the greatest market in the world of communication,
which no
doubt be the cause of its financial resources in Entrepreneurship[Social Analysis and
Research, Nov 15 2013& http;//]
and the Social responsibility programs towards our society, our company applied its social
responsibility
Strategy by implementing many programs and initiatives:
First: The companys social responsibility initiatives that are applied through its products
and services .since our company is the leader in telecommunication and information
technology, it focused its capabilities and resource toward goodwill projects. That was
achievedthrough:
launching a package for special needs
Saudi telecom launched a package for people with special needs and the hard of
hearing in order to meet their specific technical needs .
free services in emergency situations:
to respond to certain emergency situation, we launched the free SMS Services
[STC, Nov 23& www]

2.4 Technology Factor

Technology Factor
STC has continually invested in a number of cables and partnerships to develop a unique
international data network:
Investments in two new cable systems: IMEWE recently launched; and upcoming

EIG.

Extensive capacity on existing cable systems notably SMW-4.

Access to Africa via SAS-1 and planned SAS-2 cables allowing connection to EASSy
cable Landing stations in 3 different cities on west/east coasts of KSA.
MENA and GBI submarine cable consortiums land within STC landing station

3.1 SWOT analysis

Internal SWOT analysis:
1- One of the largest telecommunication companies in
the middle east

Strength
2- Has an experience in different types of
communication
3- It is a strong competitors
1- late expansion in more countries

Weakness

2- service quality and customer care is lagging behind

competitors
3- Mismanagement and lack of expertise in certain
sectors of the company
1- New technology

Opportunities
2- Develop infrastructure
3- New Product
1- Lack of the necessary information

Threats

2- Fail to use all the new forms of communication

3- Distrust of the use of the revenue on the investment

Strength :
One of the largest telecommunications companies in the Middle East which is widespread
on both local or international level , It has a wealth of experience in human resources or
in the different types of communication ,It is competitor for global telecom companies
that provide various types of communication technology.

Weaknesses :
An unconsidered expansion of STC communication in lucrative countries, where the
potential of growth is high (like far east, India and china),which results in a substantial
financial burden on the company's impact on the price of the shares. Service quality and
customer care is lagging behind competitors, which results in negative image for the
companys potential for attracting new customers. Mismanagement and lack of expertise
in certain sectors of the company which results in a low level of some of the services
provided by the company.

: Opportunities
Opportunities that available to the STC company could be in the form of new technology
or develop infrastructure that could expand the customers base, and allow to build the
company strength and create a new opportunities to reach for more customers , so this
.will increase the company's income and that is the base for the company's growth

: Threats
The threats that could threat the company is distrust of the use of the revenue on the
investment , lack of necessary information to know what is more wanted in the market,
lack of regularity clarity that concern the new structure and models for the market , fail
to use all the new form of communication , weakness of the mergers and partnership
strategies , fail to select new tools to measure the quality of the work privacy and
.secretariat, the lack of the structure flexibility

[//;SWOT Analysis, Nov 25 & http]

External SWOT analysis

Zaincompany
1-

Strong management

Strength
231-

Innovative culture
Brand name
High staff turnover

231-

Online presence
Customer service
New services

Weakness

Opportunities
231-

Online market
New market
Political risks

Threats
23-

Bad economy
Matures markets

: Strength
: Strong management
It can help the company reach its potential by utilizing strengths and eliminating
weakness, strong management has a significant impact , so an analysis should put
more weight into it
:Innovative culture
An innovative culture helps Zain to produce unique products and services that meet
.their customers needs
:Brand name A strong brand name is a major strength of Zain that gives the ability to charge higher
.prices for their products because consumers place additional value in the brand

: Weaknesses
: High staff turnover High staff turnover can hurt Zain s ability to compete, because replacing valuable
staff is expenses
: Online presence The online market is essential for displaying information and selling products. A weak
online presence can result in lost opportunities for Zain "Online Presence (Zain)" will
have a long-term negative impact on this entity, which subtracts from the entity's
.value
customer service Weak customer service hurts Zain s reputation and causes customers to flee to
competitors, who are more respondent

: Opportunities
: New services 10

New services help Zain to better meet their customers needs. These services can
expand Zain s business and diversify their customer base
: online market The online market offers Zain the ability to greatly expand their business. Zain can
market to a much wider audience for relatively little expense
:New marketsNew markets allow Zain to expand their business and diversify their portfolio of
products and services

:Threats
: political risks Politics can increase Zain risk factors because governments can quickly change
business rules that negatively affect Zains business it will lead to a decrease in
profits. "Political Risk (Zain )" is a difficult qualitative factor to overcome, so the
.investment will have to spend a lot of time trying to overcome this issue
: Bad economy A bad economy can hurt Zains business by decreasing the number of potential
customers, this threat will have a long-term negative impact on this entity, which
.subtracts from the entity's value
:Matures markets Mature markets are competitive. In order for Zain to grow in a mature market, it has
.to increase market share , which is difficult and expensive
.[Zain SWOT Analysis NOV 19 & http;// ]

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Mobily company
1. Saudi fibre optic network.

Strength

2. value-added services and innovative products.

3. A solid expansion strategy.(mba skool.com,2010)
1.

Weakness

A price war with STC and Zain.

2. high net-worth.
3. Fixed broadband market share is dominated by
Saudi Telecom Co. (mba skool.com,2010)
1. Mobile number portability (MNP)

Opportuniti
es

2. expansion plans for its own network.

3. support from the Saudi government. (mba
skool.com,2010)

1. Competition in the market.

Threats

2. Mobile number portability (MNP).

3. Heightened competition stemming from the
entrance of MTC (mba skool.com,2010)

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Strength:
Saudi fibre optic network:

1-

Development of a new Saudi fibre optic network to reduce the

cost of services and enhance data revenues stream.
value-added services and innovative products:

2-

The development and focus on value-added services and

innovative products, particularly data revenue, This is set to
become the second largest contributor to revenues, following
voice.
A solid expansion strategy:

3-

Mobily first adopted a solid expansion strategy based on

direct and
indirect sales channels, allowing it to quickly
expand and establish its brand throughout Saudi Arabia. Its
focus on brand recognition and market segmentation,
supports its strong subscriber acquisition ability in the Saudi
market.

Weakness:
A price war with STC and Zain:

1-

The main concern is a price war with STC and Zain, which
puts margins and ARPU levels under pressure.

high net-worth:

2-

Relatively low high net-worth postpaid subscribers in Mobilys

subscriber mix.

Opportunities:
Mobile number portability (MNP):

1- Mobile number portability (MNP) enables mobile subscribers to

keep their mobile telephone numbers when changing from one
mobile network operator to another. The implementation of the
MNP service will allow unsatisfied subscribers using a
competitors network, to transfer to Mobilys network easily.
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Therefore, if Mobily manages to provide better services than its

competitors, Mobily will be able to increase its market share
easily.
expansion plans for its own network:

2- Mobily has ambitious expansion plans for its own network of flagships. Also,
a new franchise retail concept (MiniFBO) will complement existing Mobily retail and channel partner outlets,
cover more than 60 cities/towns and help
achieve its targets on sales and customer experience.
support from the Saudi government:

3- Strong support from the Saudi government to attract foreign direct

investment in the telecommunications sector through the
liberalization and reforms in its information technology sectors.

Threats:
Competition in the market:
1- Competition in the market remains fierce, with Zain making every effort to capture
subscribers. Currently, Zain and Mobily's pricing and rates are the same. We
believe the real differentiator will be the quality of service.
Mobile number portability (MNP):
2- Mobile number portability (MNP) will lead to increased competition
between operators, since it
will become easier for subscribers to transfer from one operator to
another.
Heightened competition stemming from the entrance of MTC:
3- Heightened competition stemming from the entrance of MTC by 2008,
as the third mobile
player, is likely to lead to decreases in ARPU.

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Recommendations:
1. STC needs expansion in more lucrative market
2. Better marketing research to determine costumer requirements and improve
satisfaction
3. Improving expertise either through taking over reputed well-known companies or
4.

5.

6.

7.

8.

recruit experts in these fields

Do not open any new branch of the company, or put Towers of the company that is being
considered by the city and the site in general, in terms of need and expected success of the
project by more than 60%.
The development of a certain age at which an employee stops working when it becomes too
old, to give other young people a chance to work, and the reduction of the difficult conditions
for the job.
The directors are chosen by certain conditions qualify them for the job, put bonuses for the
perfect director, and zero tolerance with any director cause damage to the company's interest
or the interest of the employees.
The collection of information of interest to the company in all areas before you
start the application, for example: take advantage of the competition companys to
know what is the most demand on the market and develope it to attract the
consumer.
Not to risk the use of new forms of communication by the well-studied, and the
study of the site and the city, which will be held in it and make sure the success
rate significantly.

9.

4.1 Conclusion
Saudi Telecom Company (STC) is the leading provider of telecommunications services in
the Kingdom of Saudi Arabia and it is among the largest operators in the Middle East.
The company provides mobile and fixed telephone services, along with Internet and
other data services, to residential and business customers. Operating the Jawal and Hatif
networks, the company offers such brands as QUICKnet for mobile Internet service and
the inVISION bundle of voice, broadband, and television. STC also operates a submarine
communications cable system connecting Saudi Arabia and Sudan in Africa through Arab
Submarine Cables Company.
Based in the pest analysis of STC, Changes in the comoanys environment can create
great opportunities for the organization and cause significant threats.
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For example, opportunities can come from new technologies that helpsSTC to reach new
customers, from new funding streams that allow to invest in better equipment, and from
changed government policies that open up new markets.
In addition, the SWOT Analysis helps the company carve a sustainable niche in the
market. by looking at STC and the competitors of the company using the SWOT
framework, STC can start to craft a strategy that helps to distinguish its company from
its competitors (mobily and zain) , so that STC can compete successfully in the market.

Reference :

Alriyadh website www.alriyadh.com,30-102013,http://www.alriyadh.com/2007/03/31/article237760.html

Discover New Opportunities. Manage and Eliminate Threats. (2013) ,Retrieved November 25
2013, from http://www.mindtools.com/pages/article/newTMC_05.htm

Internet Ehow money (2012), Retrieved October 28 2013, from

http://www.ehow.com/about_5349028_company-pest-analysis.html#ixzz2jrDiHrARI

Political Analysis 2013 Retrieved December42013

,http://www.mci.gov.sa/Pages/Default.aspx

SaudiTelecomCompanyInformation (2013), Retrieved December 1 2013, from

http://www.hoovers.com/company-information/cs/company
profile.Saudi_Telecom_Company.84780b45127f57e5.html ,

(Saudi Telecom Company Wekepidia,2012), Retrieved October 19 2013, from

http://en.wikipedia.org/wiki/Saudi_Telecom_Company

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Social Analysis and Research (2013), Retrieved November15 2013,

fromhttp://bulletin.brown.edu/the-college/concentrations/sar/

Stc website, Retrieved November 23 2013, fromwww.STC.com

Zain SWOT Analysis 2013, Retrieved November 21 http://www.wikiwealth.com/swotanalysis:zain

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