Saudi Arabia’s telecommunications sector has reaffirmed the strength of its operating model and growth potential, reporting a solid rise in combined revenues in 2025.
The performance reflects continued customer growth and an expanding portfolio of digital solutions, underscoring the sector’s central role in advancing Vision 2030.
Companies listed on the Saudi Exchange (Tadawul) posted a 3.8 percent increase in total revenue, exceeding SAR108.4 billion ($28.9 billion) in 2025, compared with SAR104.46 billion ($24.9 billion) in 2024.
However, despite strong top-line growth, aggregate net profits for the sector fell by 33.4 percent. The three largest operators — Saudi Telecom Company (stc), Etihad Etisalat Company (Mobily), and Mobile Telecommunications Company Saudi Arabia (Zain KSA) — reported combined earnings of SAR18.9 billion ($5 billion), down from SAR28.39 billion ($7.6 billion) the previous year.
The sector comprises four listed firms. Three — stc, Mobily and Zain KSA — follow a December fiscal year-end, while Etihad Atheeb Telecommunication Company (GO Telecom) closes its fiscal year at the end of March.
The decline in profitability was largely driven by stc, which accounts for 78 percent of the sector’s earnings. Its net profit fell 39.9 percent to SAR14.83 billion. Analysts attributed the drop mainly to a high comparison base in 2024, when exceptional and non-recurring items boosted profits to unusually elevated levels.
By contrast, Mobily reported an 11.55 percent increase in profit to SAR3.47 billion in 2025, up from SAR3.1 billion in 2024, supported by revenue growth across all business segments and an expanding customer base.
Zain KSA recorded a 1.3 percent rise in profit to SAR604 million, compared with SAR596 million the previous year. The improvement was driven by higher revenues from consumer and wholesale segments, the expansion of 5G services, and growth in Tamam Finance’s operations.
Rising Costs and Investment Pressures
Dr. Sulaiman Al-Humaid Al-Khaldi, a financial market analyst and member of the Saudi Economic Association, said the sector’s results highlight a clear divergence between revenue growth and declining profits, pointing to mounting operational and financial pressures.
Revenue growth has not translated into higher profits, as costs have increased at a faster pace than income.
Al-Khalidi expects short-term pressure on margins to persist due to continued high capital expenditure and strong price competition. Over the medium term, however, he anticipates gradual improvement supported by growing demand for data services, digital solutions and cloud computing, as well as expansion into non-traditional areas such as fintech and data centers.
He noted that the sector is undergoing a strategic shift from traditional telecom services toward integrated digital offerings, which could strengthen profitability in the future.
Profit Normalization After an Exceptional Year
Mohamed Hamdy Omar, chief executive of G World, described 2025 as a year of profit normalization following an exceptional 2024, when non-recurring gains significantly lifted stc’s net income.
He added that fourth-quarter earnings were weighed down by a strong comparison base and higher seasonal, marketing and financing costs tied to capital investments in networks and infrastructure.
At the same time, improved operational performance at Mobily and Zain KSA helped partially offset stc’s earnings decline. Omar stressed that the pressure on profits reflects accounting and financing factors rather than weakening demand or structural challenges in the sector.
Looking ahead, he expects the medium-term outlook to remain positive, driven by sustained demand for data, continued digital expansion and growth in telecom-linked financial and technology services. Profitability is projected to stabilize further in 2026 as operational efficiency improves.
