Saudi Telecom Company (stc group, Tadawul 7010) is Saudi Arabia's largest telecom operator, with almost 300,000 shareholders. At SAR 41.16 it is worth about SAR 206bn. It is owned for its dividend, SAR 2.20 a share, a 5.3% yield. This piece asks whether that dividend is safe, and what else an investor owns at this price.
This is a long read, about 7,000 words. It covers how a ministry department became a listed company, how the Saudi telecom market works, the international adventures of the 2000s, ten years of numbers, the tower sale to PIF, the government as STC's largest customer and slowest payer, the data-centre plan, the dividend and the balance sheet, and what the share price assumes. My quarterly update covers the latest results. This is the full picture.
The short version, in five points:
The core business is strong but barely growing. STC holds about 72% of Saudi telecom revenue by its own count, and about 78% of the big three's profit. But STC KSA grew only 1.0% in the first nine months of 2026. Growth comes from lower-margin IT and other subsidiaries.
Cash flow has fallen while profit held up. EBITDA has stayed at SAR 22-25bn since 2021. Free cash flow fell from SAR 18.4bn in 2022 to about SAR 5.4bn in the last twelve months. The fixed dividend costs SAR 11bn a year.
The government is a big part of the reason. It owes STC SAR 22.6bn, about two years of what STC bills it. The part more than two years old rose tenfold since 2020. When the state pays, STC's cash flow jumps. When it does not, STC borrows.
The balance sheet is being used up. STC went from SAR 12.2bn of net cash at the end of 2024 to SAR 15.4bn of net debt in September 2026. Part of the tower sale was settled against dividends owed to PIF, not paid in cash. Leverage is still low at 0.6x EBITDA.
The decision comes in Q3 2027. That is when the current dividend promise ends. My model puts the base case at SAR 38 a share, 7% below the price, with the board trimming the dividend slightly. Regional peer multiples put STC at SAR 27-34.
This is personal research, not investment advice.
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