There is a number in the Saudi telecommunications market that deserves more analytical attention than it typically receives. It is not a revenue figure or a dividend yield. It is the distance between two companies measured in percentage points of mobile market share, and what that distance implies about the structural economics of competing in one of the Gulf's most consequential infrastructure markets.

As of Q1 2025, STC holds approximately 44 percent of the Saudi mobile market and over 70 percent of fixed-line broadband, underscoring its incumbent status in the Kingdom's telecom landscape.

Set against that,

Mobily commands roughly 28 percent of mobile market share, with a strategic focus on 5G quality and customer loyalty.

The Mobily STC market share gap, in other words, sits at somewhere between 16 and 20 percentage points depending on the metric and the methodology, and it has proved remarkably durable. Understanding why it has proved durable, and what both companies are doing about it, is the more interesting question.

The durability of STC's lead is not simply a function of incumbency, though incumbency matters enormously in capital-intensive infrastructure markets. It is also a function of what economists call network externalities compounding over time.

STC reported 2024 revenues of SAR 77.3 billion, with projections for five to eight percent revenue growth in 2025 as enterprise and digital services scale.

That revenue base funds a capital expenditure programme that smaller competitors structurally cannot match on equivalent terms.

An EBITDA margin near 34.5 percent funds large capex commitments in NEOM and other Giga-projects.

The margin funds the moat, and the moat widens the margin. It is a self-reinforcing loop that any challenger must break before it can meaningfully close the subscriber gap.

Mobily's response to this structural reality has been instructive. Rather than competing symmetrically with STC across every segment, which would be capital suicide, it has concentrated its investments selectively.

The company recorded SAR 2.13 billion in capital expenditure during Q1 2025, an increase of 850 percent year over year, with spending focused on expanding 5G networks, enhancing spectrum capacity, building new data centres valued at more than 906 million dollars, and strengthening subsea connectivity through projects like Africa 1 and the Saudi Egypt cable system.

That is not the investment profile of a company managing decline. It is the profile of a company making a deliberate asymmetric bet on the segments of the Saudi digital economy where wholesale connectivity, enterprise services, and data infrastructure matter more than raw subscriber volume.

Mobily reported a 20.2 percent rise in Q2 2025 profit to SAR 767 million, supported by stronger consumer loyalty programmes, expanding enterprise solutions, and growth in wholesale digital services, while mobile subscribers reached 12.8 million by Q2 2025, up five percent year over year.

The profit trajectory suggests the strategy is finding traction, even if the headline market share gap against STC remains wide. In a saturated mobile market where

mobile connections surpass 116 percent of the population, making incremental additions a zero-sum fight,

the more meaningful competitive frontier has shifted from subscriber acquisition to revenue quality. On that metric, Mobily's enterprise and wholesale pivot looks considerably more rational than a simple reading of the Mobily STC market share differential would suggest.

The broader Saudi telecom sector stocks story is inseparable from Vision 2030's digital infrastructure ambitions, which function less as a policy backdrop and more as a structural demand driver that reshapes the return profile of every asset in the sector.

💡 Insight

What the Mobily STC market share dynamic ultimately reveals is something more structural than a competitive race between two listed companies.

Saudi Arabia's mobile services market revenue is projected to rise from 13.9 billion dollars in 2025 to 17.4 billion dollars by 2030, reflecting a compound annual growth rate of 4.5 percent, while 5G subscriptions are expected to account for 93 percent of total mobile subscriptions by 2030.

The government's connectivity ambitions are, in effect, a long-dated revenue guarantee embedded in the sector's structural outlook, which is precisely why Saudi Vision 2030 digital infrastructure stocks attract the kind of patient capital that looks through near-term margin compression.

STC valuation conversations among analysts reflect this structural confidence.

According to projections from 16 analysts, the average 12-month price target for STC on Tadawul is 47.87 SAR, with a high estimate of 55 SAR and a low estimate of 41.1 SAR.

H1 2025 revenues increased by 2.09 percent to SAR 38.66 billion, underpinning a 13.38 percent net profit growth, while a dividend yield near 5.5 percent reflects strong cash flow and a shareholder value focus.

The STC valuation price target range captures a market that has largely priced in the company's infrastructure dominance while remaining uncertain about the pace at which its digital services subsidiaries, particularly stc Bank and solutions by stc, will generate the kind of higher-multiple revenue that would justify a meaningful re-rating.

The regional comparison sharpens the analytical picture. The e& Etisalat earnings analysis offers a useful reference point for what a GCC incumbent looks like when its digital transformation strategy reaches genuine financial velocity.

e& reported consolidated revenue of AED 34.9 billion in H1 2025, representing year-over-year growth of 23.3 percent, while consolidated net profit rose to AED 8.8 billion, up 60.7 percent from the previous year.

Critically, e& has a direct stake in the Saudi market through its controlling interest in Mobily, which means its earnings trajectory and Mobily's capital deployment strategy are analytically linked.

Mobily was recognised as the fastest-growing telecommunications brand in the Middle East, with its brand value increasing by more than 140 percent over the past five years, while the company announced investments exceeding SAR 3.4 billion in digital infrastructure projects including data centres and subsea cables.

The e& group is effectively running a dual-track strategy in the Kingdom: competing with STC through Mobily while also benefiting from the same Vision 2030 tailwinds that lift all operators in the market.

What the Mobily STC market share dynamic ultimately reveals is something more structural than a competitive race between two listed companies. It reveals the economics of infrastructure oligopoly in a market where government ambition sets the long-term demand curve and where the real competition is not for subscribers but for the higher-margin digital services revenue that will define the sector's next decade. STC's scale advantage is real and unlikely to erode quickly. Mobily's asymmetric capital deployment is rational and its profit momentum is genuine. The distance between them, measured in market share points, matters less than the direction in which both are moving: deeper into the digital economy that Saudi Arabia is building around them.

For informational and analytical purposes only. This material is not a solicitation. Consult a licensed financial advisor regarding your personal financial situation.