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Saudi Telecom Co. to build extra data centres in $400m investment push

Capital adds to previously announced $270 million used to build three facilities in Riyadh, Jeddah and Al-Madina.

By João Marques Lima

Co-founder and Editor, The Tech Capital

3 Mins

November 14, 2021 | 8:55 PM GMT

Saudi Telecom Co. to build extra data centres in $400m investment push

Haithem Alfaraj, STC chief technology officer. Source: stc

Saudi Arabia’s telecommunications company Saudi Telecom Co. (STC) (TADAWUL: 7010) said it will build a 1.5 billion riyals ($400 million) portfolio of six data centres to support the Kingdom’s digital economy.

The investment, one of the largest of its kind in the Middle East region to date, will deliver a combined 125MW, 180,000 square metres or 1.94 million square foot portfolio that adds to the company’s existing infrastructure.

The development represents Riyadh-based STC’s third phase of the ERA Data Center Construction Program designed to accelerate the implementation of the Kingdom’s digital transformation objectives.

Phase 1 completed in 2019 and Phase 2 already is in the final commissioning stage. Phase 3 expected to be completed in 12 months.

STC Data Centers program constitutes of 16 centres that include 17,000 racks which will be incorporating eight parallel projects distributed across multiple zones within six cities including Riyadh, Jeddah, and Dammam.

Haithem Alfaraj, STC chief technology officer, said: “We have big plans for our data centres to become a gateway for the MENA infrastructure. STC is now established to be the leading data platform in the region and supporting the demand for international connectivity.

“We aim not only to build new data centres but also expand our existing ones to ensure STC is fully equipped to meet the future growing demands of our customers. STC is geared up to grow-on-demand with its unique Data Center solution, by easily replicating a standardized design, that could exceed 300 MW of our current computing power capacity by reacting quickly to the market.”

Mohammed Alabbadi, STC chief wholesale officer, added: “These data centres are vital components of our premier digital hub offering that STC announced towards the end of 2020. Aligned with the Saudi Vision 2030 goals, it enables Saudi Arabia as a centre of digitalisation, attracting local and foreign direct investments.”

STC’s first major multi-million dollar data centre expansion was announced roughly a year ago in December 2020 when the company unveiled its intentions to build three facilities for $270 million.

Saudi Arabia has seen a surge in data centre interest over 2021 as the oil-rich-kingdom looks to diversify its economy and built it on digital.

In October, Saudi Fransi Capital (SFC), the investment arm of Banque Saudi Fransi, has launched the Saudi Data Center Fund I, Saudi Arabia’s first private fund initiative of its kind.

The fund has an initial target size of SAR 1.5 billion (US$400 million), more than twice the originally planned float of SAR 700 million ($186.63 million).

Around the same time, data centre projects were green-lighted for Neom City, a new $500 billion smart city being built from the ground up.

The Saudi government has also announced last July plans to invest as much as $18 billion in the construction of hyperscale data centre facilities across the country.

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João Marques Lima

Co-founder and Editor, The Tech Capital

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