Saudi Arabia's PIF partners with STC to launch IoT company

Based in Riyadh, the new company will contribute towards accelerating the Internet of Things adoption in the Arab world's biggest economy

Saudi Arabia's IoT market is projected to reach $2.9 billion by 2025. Getty

Public Investment Fund, Saudi Arabia's sovereign wealth fund, is partnering with Saudi Telecom Company, the kingdom’s largest mobile operator by market value, to establish an Internet of Things (IoT) company.

Based in Riyadh, the new company will contribute towards accelerating the IoT adoption in the Arab world's biggest economy, the entities said in a joint statement on Friday.

Both STC and PIF will own 50 per cent stake each in the joint venture that will offer smart solutions in sectors including industrial manufacturing, logistics, transportation and smart cities. The new company aims to make Saudi a regional technology centre for the Middle East and North Africa and become a “one-stop-shop” for IoT solutions.

This partnership will contribute to the PIF’s efforts to localise cutting-edge technology and knowledge in Saudi Arabia and further develop a digital economy, in line with the Vision 2030 objectives, Yazeed Al Humied, deputy governor and head of Mena investment at PIF, said.

The IoT technology facilitates in the exchange of data within devices and systems over the internet. IoT solutions are deployed across industries such as wearables, transportation, energy, retail, fifth-generation technology and healthcare.

“The company will create significant business opportunities, high quality jobs and improve productivity and efficiency for entities adopting IoT solutions in their operations,” Mr Al Humied said.

The PIF, which has about $480 billion in assets under management, is at the front and centre of the kingdom's Vision 2030 agenda that seeks to overhaul the country's economy and reduce its reliance on oil. The sovereign fund is also diversifying its investment portfolio to take advantage of new opportunities that have sprung as the world emerges from the pandemic-driven slowdown.

Besides providing core IoT solutions, the new company will create a technology ecosystem by providing consulting, implementation and training support as well as facilitating innovative funding models to support businesses in their adoption of IoT, the entities said in a statement.

It aims to accelerate the fourth industrial revolution through autonomous technologies, artificial intelligence, digital twin, sensors and other domain-specific advanced technologies, it added.

The IoT has already been identified in the STC ‘DARE 2.0’ strategy as one of the five strategic areas of investment, Olayan Al Wetaid, STC’s group chief executive, said.

“It is at our core and aligns with Saudi Arabia’s digital transformation initiatives, supported by PIF … together we seek to gradually progress towards becoming a regional centre for the connected digital communities in the Mena [region],” he added.

Saudi Arabia's IoT market is estimated to reach 10.8 billion Saudi riyals ($2.9bn) by 2025 with an annual growth rate of 12.8 per cent, according to Massachusetts-based researcher International Data Corporation.

IoT technology is in a breakthrough phase in Saudi Arabia, driven by smart cities and ongoing megaprojects in the country, Mohammed Azim, research analyst for IoT and telecom services at IDC Saudi Arabia, said.