How the industry works
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1The foundation
Regulatory and intangible assets
The spectrum an operator buys decides what its network can ever become. stc bought enough of both bands not to have to choose, and covers 63% of the population with 5G. Mobily bought the most capacity spectrum, taking the lowest national availability for 98% across 61 cities. Zain KSA took low-band only in 2024 and has the widest 5G availability in the Kingdom at 88%.
Where the three sitReachCapacity- stcBoth bands
- MobilyCapacity
- Zain KSACoverage
Operating licenseSpectrumRights only. Nothing is built, and nothing can be switched.
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2The plumbing
Core transmission
Fibre is the backbone and the backhaul that hangs off it; a tower with nothing behind it is an antenna on a dead end. stc owns the road its traffic runs on, the Saudi Vision Cable included, and defends it as transit shrinks. Mobily buys transit instead, competing on geography rather than on domestic scale. Zain KSA is a landing party through Zain Omantel International, which is access without ownership.
Where the three sitOwns the roadBuys access- stcOwns it
- MobilyBuys transit
- Zain KSALands only
Fibre backboneSubsea cableThere is a road. There is nothing at either end of it yet.
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3The brains
Core network and data centers
The core routes the traffic, authenticates the SIM and holds the subscriber record, and it is the layer that decides what an operator can sell beyond connectivity. stc is committing the most and owning the least, through the HUMAIN joint venture. Mobily is building its own rather than buying into anyone else's. Zain KSA has disclosed none, the only one of the three with nothing to show at this layer.
Where the three sitBuilds its ownOwns none- stcJoint venture
- MobilyBuilds own
- Zain KSANone
SwitchingSubscriber recordsTraffic can be routed and a SIM can be recognized. No handset can reach it.
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4The edge
Last-mile wireless access
This is where the network stops being wired and becomes a bar of signal, and it is the only layer two operators can share without either of them losing anything. stc no longer consolidates its towers, so the steel has left the balance sheet and come back as rent. Mobily is the last still carrying its own, and is in early talks to sell them. Zain KSA sold first, 8,069 towers in 2023, for cash plus a retained 20% stake in the buyer.
Where the three sitOn its own booksLeased back- stcSold
- MobilyStill owns
- Zain KSASold, kept 20%
TowersBase stationsThe signal reaches a handset. Nothing has been billed.
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5The commercial layer
Provisioning and go-live
Only here does any of it turn into revenue, and the four stages above have to be earned back. stc is the largest by a wide margin, which on a sunk-cost network is where the return comes from. Mobily turns the same capacity into the best EBITDA margin and fastest growth here. Zain KSA has the best gross margin and the worst net margin: too small for volume, and not keeping it.
Where the three sitVolumeMargin- stcScale
- MobilyMargin
- Zain KSANeither
PackagingBilling systemsNetwork live. Only now is there anything to sell.
Signal and capacity are not the same purchase
Not all spectrum does the same job, and the bands an operator holds tell you what it is trying to win.
Low frequencies travel a long way and pass through walls. They are what gives you a bar of signal in a basement, or on a road an hour outside Riyadh. They carry relatively little data, but they cover ground cheaply, because a single site reaches far. This is the reach purchase, and it is what a regulator has in mind when it writes coverage obligations into a license.
High frequencies do the reverse. They carry a great deal of data over a short distance and stop at the first solid object. Blanketing a city with them takes many more sites, which is expensive, but it is the only way to serve a stadium, a mall or a dense district where thousands of people are streaming at once. This is the throughput purchase.
So there are two different games being played with the same license. One operator is buying reach, which wins subscribers in places nobody else serves and shows up as coverage. Another is buying throughput where people already are, which wins usage per subscriber and shows up as data revenue. Knowing which game a given operator is playing tells you more about its next five years than its revenue growth does.
How they make money
The asset is already paid for. From here the economics are about how much traffic the same network can be made to carry, and how many different customers can be sold access to it. The cost is sunk and the marginal cost of one more customer is near zero, so an operator with more customers on the same network is not slightly more profitable than one with fewer. It is structurally more profitable, and the gap compounds.
Mobile penetration passed saturation years ago, so growth cannot come from finding people without a phone. It comes from which of three doors an operator can get through.
| Retail | Enterprise | Wholesale | |
|---|---|---|---|
| Customer | a person | a business or the state | another carrier |
| Stays for | a month | years, by contract | the life of a route |
| Exposed to | churn | their credit | price |
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Where the revenue is
Retail
Devices and monthly packages, sold to people, and the least defended of the three doors: a subscriber can leave at the end of a month and winning one back costs a subsidized handset. stc, Mobily and Zain KSA hold it in the order of their size, which past saturation is what it looks like when nobody is winning a door, only holding it.
Share of the three, FY2025 -
Where the margin is
Enterprise
Long contracts sold to companies and to government bodies, where the operator sells the layers it built for itself. stc holds better than two thirds of it, a wider lead than it has in retail, but grew 0.4% in 2025 against a 3.4% fall in the public sector while Mobily grew 7.7%. Zain KSA is barely here, and this is the door the margin comes through.
Share of the three, FY2025 -
Where the growth is
Wholesale
Carrying another carrier's traffic across a network built for your own, so nothing new has to be built to sell it. That makes it the growth door and the easiest to lose to a rival's own route. It is also the least concentrated: stc holds under half of it, and Zain KSA takes close to a third against an eighth of retail, more than Mobily does.
Share of the three, FY2025
Where the cash goes
Three uses, and each one consumes capital the other two could have had. Each is a different bet on what a telco is for, which is why return on invested capital rather than revenue growth is the measure that separates these three companies.
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Back into the network
Reinvest in infrastructure
The network itself: property, plant and the intangibles with it. Mobily now puts the largest share of revenue back in and stc the steadiest. Zain KSA's has fallen from a quarter of revenue to under a twentieth, an arithmetic consequence of selling its towers. The spending became rent, which this chart cannot see.
stcMobilyZain KSAChart data 2018 2019 2020 2021 2022 2023 2024 2025 stc 18.8% 20.9% 18.4% 13.0% 11.8% 13.6% 15.7% 15.2% Mobily 15.1% 15.6% 24.5% 15.0% 15.5% 12.1% 14.7% 16.4% Zain KSA 20.2% 24.3% 23.1% 13.8% 14.8% 15.4% 6.8% 4.5% -
Buy rather than build
Acquire companies
The same capability, bought whole instead of assembled. Only stc does this at any scale, and more than three quarters of what it has spent in eight years went in a single year. Mobily and Zain KSA have between them spent less across the whole window than stc puts into its own network in a week.
SAR millions, FY2018 to FY2025 -
Out to shareholders
Dividends
The one use of cash that does not come back. stc has paid throughout, though its 2022 share split leaves the two halves of its line on different footings. Mobily began paying in 2021 and has raised it every year since. Zain KSA started in 2023 and has not moved it since, the only flat line here.
stcMobilyZain KSAChart data 2018 2019 2020 2021 2022 2023 2024 2025 stc 4.00 7.00 4.00 5.00 1.60 1.60 2.75 4.20 Mobily 0.00 0.00 0.00 0.50 0.85 1.15 2.35 2.51 Zain KSA 0.00 0.00 0.00 0.00 0.00 0.50 0.50 0.50
Why the towers left the balance sheet
For most of the industry's history an operator owned its towers. Over the past decade many have sold them, usually to a specialist tower company, and leased back the space they need.
The logic is that a tower is not a competitive asset. Two operators can hang equipment on the same mast without either being worse off, so owning steel earns nothing that renting it does not. Selling releases cash and strips a large, slow-turning asset out of invested capital, which mechanically lifts return on invested capital.
That last part deserves suspicion. A sale-leaseback improves the ratio partly by shrinking its denominator, and it replaces depreciation with a lease obligation that still has to be paid every year. When ROIC jumps in a year an operator sold its towers, the right question is how much of the improvement was operational and how much was the balance sheet getting shorter. The figures on this site are drawn from the reported accounts, which include lease liabilities, so the obligation does not disappear from view.
The three operators
Same regulator, same three-operator market, same fixed-cost physics. What separates them is what they bought at each of those five stages, and every one of them gave something up to get it.
stc 7010
- Listed
- Jan 2003
- Market cap
- SAR 215B
- Revenue
- SAR 77.8B
- Net margin
- 19.5%
- Free cash flow
- SAR 6.5B
- Dividend / share
- SAR 4.20
Mobily 7020
- Listed
- Dec 2004
- Market cap
- SAR 50.8B
- Revenue
- SAR 19.6B
- Net margin
- 17.6%
- Free cash flow
- SAR 3.4B
- Dividend / share
- SAR 2.51
Zain KSA 7030
- Listed
- Mar 2008
- Market cap
- SAR 9.4B
- Revenue
- SAR 11.0B
- Net margin
- 5.5%
- Free cash flow
- SAR 1.5B
- Dividend / share
- SAR 0.50
Figures for FY2025. Market cap is at the year-end close. Listed is the month each company began trading on the Main Market.
Side by side, FY2025
Everything above is the mechanism. This is the year just reported, on one page, with all 3 of them measured the same way.
| Measure | stc7010 | Mobily7020 | Zain KSA7030 |
|---|---|---|---|
| Financial Highlights | |||
| Net revenuesscale of the business | SAR 77.8B | SAR 19.6B | SAR 11.0B |
| Revenue growthyear on year | +2.5% | +7.9% | +6.0% |
| EBITDA marginbefore capital charges | 33.2% | 39.1% | 35.1% |
| Net profit marginper riyal of sales | 19.5% | 17.6% | 5.5% |
| Cash Highlights | |||
| Days sales outstandingdays to collect a sale | 131 days | 114 days | 168 days |
| Capex % of revenuesas the cash flow statement reports it | 15.2% | 16.4% | 4.5% |
| Dividends per sharedeclared for the year | SAR 4.20 | SAR 2.51 | SAR 0.50 |
| Free cash flowafter capital spending | SAR 6.5B | SAR 3.4B | SAR 1.5B |
| Operational Highlights | |||
| Mobile subscribersin Saudi Arabia | 30.0M | 14.4M | 8.1M |
| Retail revenue per subscriberretail revenues over mobile subscribers, a year | SAR 1,238 | SAR 877 | SAR 853 |
| 5G coveragein Saudi Arabia | 63.0% | 58.5% | 62.5% |
| 4G coveragein Saudi Arabia | 99.0% | 98.2% | 98.0% |
| Other Highlights | |||
| Board remunerationpaid to directors | SAR 1,012M | SAR 9.7M | SAR 5.9M |
| Saudization rateof the workforce | 89.6% | 85.3% | 89.5% |
| Employeesheadcount at year end | 38,500 | 2,573 | 3,353 |
| Revenue per employeenet revenues per full-time employee | SAR 2.0M | SAR 7.6M | SAR 3.3M |
Marking the stronger figure is arithmetic, not a recommendation. A company can lead every row here and still be the wrong price.
Does the capital earn its keep
Return on invested capital against what that capital costs, every year from FY2018 to FY2025. Above the line the business is creating value. Below it, it is consuming value, however healthy the revenue line looks.
stc+6.9pt FY2025
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| ROIC | 20.2% | 19.2% | 19.3% | 18.0% | 19.0% | 14.4% | 15.6% | 16.2% |
| WACC | 13.3% | 11.4% | 7.1% | 7.9% | 8.0% | 10.4% | 9.6% | 9.3% |
| Spread | +6.9pt | +7.8pt | +12.2pt | +10.1pt | +11.0pt | +4.0pt | +6.0pt | +6.9pt |
Mobily+2.6pt FY2025
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| ROIC | 3.8% | 5.3% | 6.4% | 7.4% | 9.6% | 12.2% | 14.2% | 13.8% |
| WACC | 9.2% | 9.0% | 7.7% | 4.9% | 8.5% | 9.6% | 9.8% | 11.2% |
| Spread | -5.4pt | -3.6pt | -1.3pt | +2.6pt | +1.1pt | +2.6pt | +4.4pt | +2.6pt |
Zain KSA-0.7pt FY2025
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|---|---|
| ROIC | 5.7% | 7.8% | 6.8% | 3.7% | 6.8% | 5.7% | 8.0% | 7.8% |
| WACC | 8.9% | 12.2% | 10.8% | 7.3% | 9.2% | 8.8% | 8.6% | 8.6% |
| Spread | -3.2pt | -4.4pt | -4.0pt | -3.6pt | -2.5pt | -3.1pt | -0.6pt | -0.7pt |
What decides the next two years
Whether the spread survives the next capital cycle
5G coverage is largely built. The next call is what the operators do with the capital that is no longer going into it, and whether the businesses they put it into clear the same hurdle the network has to. A positive ROIC-to-WACC spread earned on a mature network can be spent quickly on an immature one.
Whether Mobily's crossover holds
Mobily has closed most of the gap to the incumbent on return over cost of capital, from well below it to just short of it. That is either a turnaround completing or a permanently better business emerging, and the two look identical for about three years. If the climb continues, the market stops being one strong operator and two weak ones and becomes something closer to two and one.
Whether dividends stay ahead of cash generation
Payout ratios above what free cash flow supports are funded from somewhere, and on a capital-intensive balance sheet that somewhere is usually debt or deferred maintenance of the network. It is the clearest early signal that a distribution policy is being set by shareholder expectation rather than by the business.
The full workings
Every statement, ratio and cost-of-capital build behind this piece, for all 3 companies, on one page.
Open the data appendixIndustry figures on this site are computed on a three-company basis: stc (7010), Mobily (7020) and Zain KSA (7030). Etihad Atheeb Telecom (GO, 7040) is excluded because it reports on a 31 March fiscal year end, which is not comparable to the 31 December year end used by the other three without restating its accounts. Any reference to a “sector median” here means the median of those three companies, not of the full Tadawul telecom index.