Saudi Arabia's Telecommunication Services Market 2025–2029: Strategic Capital Allocation in a 5G-Driven Digital Transformation

The Saudi Arabia telecommunications market is undergoing a transformative phase, driven by Vision 2030's digital ambitions and the rapid adoption of 5G technology. With a market size of USD 19.04 billion in 2025, the sector is projected to grow at a compound annual growth rate (CAGR) of 3.92%, reaching USD 23.07 billion by 2030, according to a GlobeNewswire outlook. However, alternative forecasts suggest a more aggressive trajectory, with the market expanding to USD 37.19 billion by 2030 at a CAGR of 6.64%, fueled by 5G infrastructure and enterprise connectivity demand, as reported in a Mordor Intelligence report. This divergence underscores the sector's dynamic nature, shaped by government-led initiatives and operator-level investments.

Strategic Capital Allocation and 5G Leadership

The Communications, Space and Technology Commission (CST) has positioned 5G as a cornerstone of Saudi Arabia's digital economy. By 2030, the 5G segment is expected to contribute over USD 18 billion to GDP, up from USD 4.7 billion in 2024, according to the GlobeNewswire outlook. This growth is underpinned by spectrum auctions, such as the 2024 allocation of 310 MHz in the 600, 700, and 3800 MHz bands, which enabled operators to enhance network capacity and latency, as noted in the Mordor Intelligence report.

Saudi Telecom Company (STC), the market leader with over 40% share, has allocated significant resources to 5G expansion. The company has deployed 5G coverage across 22,000 towers and is investing in advanced solutions like network slicing and edge computing to serve enterprise clients, according to a ResearchAndMarkets report. STC's international diversification, including a 9.9% stake in Telefónica Group, further strengthens its capital resilience, as highlighted in the GlobeNewswire outlook. Meanwhile, Etihad Etisalat (Mobily), with 30% market share, is prioritizing fixed-wireless access (FWA) and urban 5G infrastructure, leveraging its 460MHz sub-6GHz spectrum acquisition to boost high-speed connectivity as noted in the CST announcement.

Zain KSA, holding 20% market share, is advancing 5G-Advanced (5G-A) deployment, aiming to cover 18 major cities by 2027–2030, according to the Mordor Intelligence report. The operator's SAR 1.6 billion investment-targeting 122 cities and governorates-includes 5G Standalone (5G-SA) technology in the 600 MHz band, enhancing coverage and performance for smart city applications, as reported by Mordor Intelligence. These strategic allocations highlight the operators' readiness to capitalize on Vision 2030's industrial and urban digitalization goals.

Competitive Positioning and Enterprise Opportunities

The market's competitive landscape is defined by innovation in enterprise services. STC leads in private 5G networks and industrial IoT platforms, supporting projects in NEOM and the Eastern Province, as described in the ResearchAndMarkets report. Mobily's focus on secure IoT and cloud-edge solutions targets smart city and BFSI clients, while Zain KSA's 5G-A trials in ultra-broadband networks position it to capture high-margin enterprise contracts, according to the Mordor Intelligence report.

Data services now account for 51.41% of the market, reflecting a shift from traditional voice/SMS revenue, per Mordor Intelligence. This trend is accelerating as operators bundle 5G with digital services, such as AI-driven healthcare and connected mobility solutions. However, challenges persist: a near-saturated subscriber base and rising infrastructure costs could temper growth, particularly as over-the-top (OTT) services erode voice/SMS margins, as highlighted in the CST announcement.

Risks and Resilience

Despite these headwinds, the sector's growth is resilient. The CST's fiber-optic expansion and government-led smart city projects-such as NEOM's cognitive city blueprint-ensure sustained demand for high-speed connectivity, as noted in the ResearchAndMarkets report. Moreover, 5G's role in industrial automation and e-government initiatives provides a buffer against consumer market saturation.

For investors, the key differentiator lies in operators' ability to monetize enterprise 5G. STC's early mover advantage in private networks, Mobily's urban FWA dominance, and Zain KSA's 5G-A innovation each present distinct opportunities. However, execution risks-such as spectrum underutilization or delayed enterprise adoption-require close monitoring.

Conclusion

Saudi Arabia's telecom sector is a compelling investment case, driven by Vision 2030's digital transformation agenda and the operators' aggressive 5G strategies. While STC's scale and enterprise focus position it as the market leader, Mobily and Zain KSA's targeted investments in urban and advanced 5G technologies offer high-growth potential. As the market navigates near-term challenges, the operators' capital allocation decisions will be critical to unlocking the Kingdom's USD 37.19 billion 2030 vision, according to the Mordor Intelligence report.