STC

Executive summary

1.1 Background

The Saudi Telecom Company was foundon 1998, following by the Council of Ministers Decree No. 213 dated 23/12/1418 H, approving ofset upa Saudi Stock Company under the name of Saudi Telecom CompanyAccordingly, STC adopted a challenging program aiming to transform its business from government system to the recognized commercial business standards. The company has developed clear strategies focusing on internal re-organizationand development of its staff, enhancement of its internal processes and studying its customers needs and requirements while continuing carrying out its national and social duties and responsibilitiesSTC is the leading national provider of telecommunication services in the Kingdom of Saudi Arabia. The company is working continuously to fulfill and satisfy the market requirements, keeping pace with the emerging technologies in the telecommunications sector and satisfying its customer's needs. STC has put in its consideration that, this is the way to reinforce its place and identity in view of a changing world where the role and usage of telecommunications became more significant.The Saudi Telecommunication Group provides integrated mobile, fixed and broadband communications services to over 160 million customers globally.Headquartered in Riyadh, Saudi Arabia, Saudi Telecom Company (STC) is the largest telecommunications company by market capitalization, total revenue and number of employees in the Arab State region. In the last few years, STC has gone beyond its local borders to the international markets, forming a network of businesses and investments in a number of GCC countries, Asia and Africa. The company is now present in Kuwait, India, Indonesia, Malaysia, Turkey, South Africa and Bahrain which has enabled STC to serve a larger number of customers internationally. The STC services divided into three broad categories: Jawal (mobile network), Home (landline network), and Enterprise services. [Wekepidia Oct 19 & http;// ]1.2 Mission statementAs leaders in a world of constant change, we strive to exceed our customers expectations together we reach new horizons (stc.com,2013)1.3 Vision statementTo continue to lead in innovation and communications services to enrich the lives of the consumer

Body 2.1 index

2.2 Environmental analysis (PEST Analysis)

1 | INTRODUCTION

A PEST analysis is a useful strategic planning to revenue and analyse the impact of the macro- environment in which the organization operates .

2.1 Political analysisSaudi Telecom company (STC) Date: 25/10/2013Political Factor

Political lawsto establish atelecommunications companyin the Kingdomof Saudi Arabia:1 . Apply for the establishment of the company (model ) .2 . Book business name ( if desired commercial partners to use the name of the company ) .3 . Memorandum of Association - Summary of the Memorandum of Association (model) 4 . A copy of the national identity of the partners .5 . In the event of a foreign investor must obtain a license from the General Authority for Investment and submit an application to the body .6 . After approval of the application is referral to the virtue of a notary documentation .[Saudi Telecom Company Information , Dec 1 & http;//]Registration procedures the commercial register :1 . Provide a statement in the contract summary publication of the Official Gazette ( or villages ) and the ministry's website .2 . A certified copy of the Memorandum of Association.3 . Out of bank certificate (in case of cash capital ) .4 . Partners appointment of the Director 's decision if it is not set in the Memorandum of Association.)www.mci.gov.sa,2013)

Governmental fees:The Company assumesallgovernment feeswhichmustfactorthe contractorpaidbygovernment regulations(residence and work permitandrenovatedand the consequentdelayfromfinesifthe delay wasdue tothe company, thefeechangeprofession,feesexit visasandreturn) andunder the terms ofthe provisions ofthe contract between thecompanyand the worker.(stc.com.sa,2013) Annual fees (1,200 ) Real up to a maximum of five years . )www.mci.gov.sa,2013)

2.2 Economic analysis

Economic Factor

the general budget There has been a significant improvement on the company's assetssince 2001 to 2006 , raising the size of the total assets of the company to about 46.12billion riyals from 39.17 billion during the past five years , an increase of 6.95 billionriyals, ie the proportion of 17.74 per cent over the past five years , the equivalent ratio3.21 per cent per annum , and this good growth in the assets of any company giant ,especially since this growth in assets was reflected in the shareholders' equity , whichachieved a leap better than that , it has increased the total equity of 20.47 billion to 34.15billion , the proportion of 66.83 per cent over the past five years, or 10.78 per cent perannum , and this rate is excellent by any standards . [Saudi Telecom Company Information , Dec 1 & http;//] Notes that opponents of the companyor liabilities has shrunk so dramatically , while the volume of liabilities in 2001, nearly18.7 billion riyals reduced this amount to 11.97 billion in 2006 at a time when increasedthe size of the assets of 39.17 to 46.12 billion riyals , and this is a good sign , what putsthe company in a safe area of the financial aspects , with the support of the ongoingliquidity ratio of 126 per cent, flooding 88 per cent cash in 2) revenue and profit : Grownsales operational by 3.81 per cent last year , 2006, while not exceeding sales 45 billion in2005 , the volume of sales to 46.12 billion riyals last year, 2006, we must not forget thatthese sales jumped from 19.78 billion riyals in 2001, and is reflected in the net profitoperational , which increased by 2.81 per cent last year, rose from 12.45 billion to 12.80 billion Vertical analysis of financial statements Vertical analysis compares each item and before, for example , the ratio of cost of sales to sales, the ratio of operating expenses to sales , the ratio of liabilities to equity (Alriyadh website, Nov 12 & http:// )

2.3 Social analysis

Social Factor

STC offers different types of products that serve the members of the community to communicate

with each other and the services the company has a multi-serve all strata of society, whether with

the owners of the qualifications and experience of high or owners of qualifications and

experience, Ltd. and the company keep pace with all the advanced services in the world of

technology and communications to attract the largest number of customers, particularly with the

existence of rival companies, which all of them are keen to provide services with high quality

and competitive prices to capture the greatest market in the world of communication, which no

doubt be the cause of its financial resources in Entrepreneurship[Social Analysis and Research, Nov 15 2013& http;//]

and the Social responsibility programs towards our society, our company applied its social responsibility

Strategy by implementing many programs and initiatives:

First: The companys social responsibility initiatives that are applied through its products and services .since our company is the leader in telecommunication and information technology, it focused its capabilities and resource toward goodwill projects. That was achievedthrough:

launching a package for special needs Saudi telecom launched a package for people with special needs and the hard of hearing in order to meet their specific technical needs .

free services in emergency situations:to respond to certain emergency situation, we launched the free SMS Services

[STC, Nov 23& www]

2.4 Technology Factor

Technology Factor

STC has continually invested in a number of cables and partnerships to develop a unique international data network: Investments in two new cable systems: IMEWE recently launched; and upcoming EIG. Extensive capacity on existing cable systems notably SMW-4. Access to Africa via SAS-1 and planned SAS-2 cables allowing connection to EASSy cable Landing stations in 3 different cities on west/east coasts of KSA.MENA and GBI submarine cable consortiums land within STC landing station

3.1 SWOT analysis

Internal SWOT analysis:

Strength1- One of the largest telecommunication companies in the middle east

2- Has an experience in different types of communication

3- It is a strong competitors

Weakness1- late expansion in more countries

2- service quality and customer care is lagging behind competitors

3- Mismanagement and lack of expertise in certain sectors of the company

Opportunities

1- New technology

2- Develop infrastructure

3- New Product

Threats1- Lack of the necessary information

2- Fail to use all the new forms of communication

3- Distrust of the use of the revenue on the investment

Strength :

One of the largest telecommunications companies in the Middle East which is widespread on both local or international level , It has a wealth of experience in human resources or in the different types of communication ,It is competitor for global telecom companies that provide various types of communication technology.

Weaknesses :

An unconsidered expansion of STC communication in lucrative countries, where the potential of growth is high (like far east, India and china),which results in a substantial financial burden on the company's impact on the price of the shares. Service quality and customer care is lagging behind competitors, which results in negative image for the companys potential for attracting new customers. Mismanagement and lack of expertise in certain sectors of the company which results in a low level of some of the services provided by the company.

Opportunities :

Opportunities that available to the STC company could be in the form of new technology or develop infrastructure that could expand the customers base, and allow to build the company strength and create a new opportunities to reach for more customers , so this will increase the company's income and that is the base for the company's growth.Threats :

The threats that could threat the company is distrust of the use of the revenue on the investment , lack of necessary information to know what is more wanted in the market, lack of regularity clarity that concern the new structure and models for the market , fail to use all the new form of communication , weakness of the mergers and partnership strategies , fail to select new tools to measure the quality of the work privacy and secretariat, the lack of the structure flexibility.

[SWOT Analysis, Nov 25 & http;//]

External SWOT analysis

Zaincompany

Strength1- Strong management

2- Innovative culture

3- Brand name

Weakness1- High staff turnover

2- Online presence

3- Customer service

Opportunities

1- New services

2- Online market

3- New market

Threats1- Political risks

2- Bad economy

3- Matures markets

Strength :Strong management : It can help the company reach its potential by utilizing strengths and eliminating weakness, strong management has a significant impact , so an analysis should put more weight into it Innovative culture:An innovative culture helps Zain to produce unique products and services that meet their customers needs.- Brand name:A strong brand name is a major strength of Zain that gives the ability to charge higher prices for their products because consumers place additional value in the brand.

Weaknesses :

- High staff turnover :High staff turnover can hurt Zain s ability to compete, because replacing valuable staff is expenses- Online presence : The online market is essential for displaying information andselling products. A weak online presence can result in lost opportunities for Zain "Online Presence (Zain)"will have a long-term negative impact on this entity, which subtracts from the entity's value.- customer service Weak customer service hurts Zain s reputation and causes customers to flee to competitors, who are more respondent

Opportunities :

- New services :New services help Zain to better meet their customers needs. These services can expand Zain s business and diversify their customer base- online market :The online market offers Zain the ability to greatly expand their business. Zain can market to a much wider audience for relatively little expense-New markets: New markets allow Zain to expand their business and diversify their portfolio of products and services

Threats:- political risks :Politics can increase Zain risk factors because governments can quickly change business rules that negatively affect Zains business it will lead to a decrease in profits."Political Risk (Zain )"is a difficult qualitative factor to overcome, so the investment will have to spend a lot of time trying to overcome this issue.- Bad economy :A bad economy can hurt Zains businessby decreasing the number of potential customers, this threatwill have a long-term negative impacton this entity, which subtracts from the entity's value.- Matures markets:Mature markets are competitive. In order for Zain to grow in a mature market, it has to increase market share, which is difficult and expensive..[Zain SWOT Analysis NOV 19 & http;// ]

Mobily company

Strength1. Saudi fibre optic network.

2. value-added services and innovative products.

3. A solid expansion strategy.(mba skool.com,2010)

Weakness1. A price war with STC and Zain.

2. high net-worth.

3. Fixed broadband market share is dominated by Saudi Telecom Co. (mba skool.com,2010)

Opportunities

1. Mobile number portability (MNP)

2. expansion plans for its own network.

3. support from the Saudi government. (mba skool.com,2010)

Threats1. Competition in the market.

2. Mobile number portability (MNP).

3. Heightened competition stemming from the entrance of MTC (mba skool.com,2010)

Strength: Saudi fibre optic network:1- Development of a new Saudi fibre optic network to reduce the cost of services and enhance data revenues stream.

value-added services and innovative products:2- The development and focus on value-added services and innovative products, particularly data revenue, This is set to become the second largest contributor to revenues, following voice.

A solid expansion strategy:3- Mobily first adopted a solid expansion strategy based on direct and indirect sales channels, allowing it to quicklyexpand and establish its brand throughout Saudi Arabia. Its focus on brand recognition and market segmentation, supports its strong subscriber acquisition ability in the Saudi market.

Weakness: A price war with STC and Zain:1- The main concern is a price war with STC and Zain, which puts margins and ARPU levels under pressure.

high net-worth:2- Relatively low high net-worth postpaid subscribers in Mobilys subscriber mix.

Opportunities: Mobile number portability (MNP):1- Mobile number portability (MNP) enables mobile subscribers to keep their mobile telephone numbers when changing from one mobile network operator to another. The implementation of the MNP service will allow unsatisfied subscribers using a competitors network, to transfer to Mobilys network easily. Therefore, if Mobily manages to provide better services than its competitors, Mobily will be able to increase its market share easily.

expansion plans for its own network:2- Mobily has ambitious expansion plans for its own network of flagships. Also, a new franchise retail concept (Mini-FBO) will complement existing Mobily retail and channel partner outlets, cover more than 60 cities/towns and helpachieve its targets on sales and customer experience.

support from the Saudi government:3- Strong support from the Saudi government to attract foreign direct investment in the telecommunications sector through the liberalization and reforms in its information technology sectors.

Threats:

Competition in the market:1- Competition in the market remains fierce, with Zain making every effort to capture subscribers. Currently, Zain and Mobily's pricing and rates are the same. We believe the real differentiator will be the quality of service.

Mobile number portability (MNP):2- Mobile number portability (MNP) will lead to increased competition between operators, since itwill become easier for subscribers to transfer from one operator to another.

Heightened competition stemming from the entrance of MTC:3- Heightened competition stemming from the entrance of MTC by 2008, as the third mobileplayer, is likely to lead to decreases in ARPU.

Recommendations:

1. STC needs expansion in more lucrative market2. Better marketing research to determine costumer requirements and improve satisfaction3. Improving expertise either through taking over reputed well-known companies or recruit experts in these fields 4. Do not open any new branch of the company, or put Towers of the company that is being considered by the city and the site in general, in terms of need and expected success of the project by more than 60%.5. The development of a certain age at which an employee stops working when it becomes too old, to give other young people a chance to work, and the reduction of the difficult conditions for the job.6. The directors are chosen by certain conditions qualify them for the job, put bonuses for the perfect director, and zero tolerance with any director cause damage to the company's interest or the interest of the employees.7. The collection of information of interest to the company in all areas before you start the application, for example: take advantage of the competition companys to know what is the most demand on the market and develope it to attract the consumer.8. Not to risk the use of new forms of communication by the well-studied, and the study of the site and the city, which will be held in it and make sure the success rate significantly.9.

4.1 Conclusion

Saudi Telecom Company (STC) is the leading provider oftelecommunications services in the Kingdom of Saudi Arabia and it is amongthe largest operators in the Middle East. The company provides mobile and fixed telephone services, along withInternet and other data services, to residential and business customers.Operatingthe Jawal and Hatif networks, the company offers such brands as QUICKnet for mobile Internet service and the inVISION bundle of voice, broadband, and television.STC also operates a submarine communications cable system connecting Saudi Arabia and Sudan in Africathrough Arab Submarine Cables Company.Based in the pest analysis of STC, Changes in the comoanys environment can create great opportunities for the organization and cause significant threats.For example, opportunities can come from new technologies that helpsSTC to reach new customers, from new funding streams that allow to invest in better equipment, and from changed government policies that open up new markets.In addition, the SWOT Analysis helps the company carve a sustainable niche in the market. by looking at STC and the competitors of the company using the SWOT framework, STC can start to craft a strategy that helps to distinguish its company from its competitors (mobily and zain) , so that STC can compete successfully in the market.

Reference :

Alriyadh website www.alriyadh.com,30-10-2013,http://www.alriyadh.com/2007/03/31/article237760.html

Discover New Opportunities. Manage and Eliminate Threats. (2013) ,Retrieved November 25 2013, from http://www.mindtools.com/pages/article/newTMC_05.htm

Internet Ehow money (2012), Retrieved October 28 2013, from http://www.ehow.com/about_5349028_company-pest-analysis.html#ixzz2jrDiHrARI

Political Analysis 2013 Retrieved December42013 ,http://www.mci.gov.sa/Pages/Default.aspx

Saudi Telecom Company Information (2013), Retrieved December 1 2013, from http://www.hoovers.com/company-information/cs/company profile.Saudi_Telecom_Company.84780b45127f57e5.html ,

(Saudi Telecom Company Wekepidia,2012), Retrieved October 19 2013, from http://en.wikipedia.org/wiki/Saudi_Telecom_Company

Social Analysis and Research (2013), Retrieved November15 2013, fromhttp://bulletin.brown.edu/the-college/concentrations/sar/

Stc website, Retrieved November 23 2013, fromwww.STC.com

Zain SWOT Analysis 2013, Retrieved November 21 http://www.wikiwealth.com/swot-analysis:zain

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