Saudi Telecom Co's (STC) rising domestic revenue, halting a downward trend for the former monopoly, may lead it to slow its overseas push where it faces a tougher operating environment and limited buying opportunities. STC has won back domestic market share by aggressively pricing broadband bundle packages, while the firm – majority-owned by the government – has operations across the Muslim world from Turkey to Indonesia. “We are concentrating on ICT (information communication technology) in our local market as well as in other markets we operate in,” Saad Al-Qahtani, group chief executive for strategic operations, told reporters at a conference in Doha. “We are more worried about that than expansion.” In March 2011, STC upped its stake in Indonesia's Axis to 80 percent and it has a minority holding in Malaysia's Maxis. But the main jewel in STC's foreign portfolio is its 35 percent stake in Oger Telecom, which in turn owns 55 percent of Turk Telekom. When asked whether STC wanted to up its stake in Oger Telecom - majority owner the Hariri family is thought to be a willing seller - Qahtani said STC was talking internally about it, but no decision had been made. “STC, like other Gulf operators, wants management control of their foreign subsidiaries and so they either up their stakes to get a majority shareholding or sell out altogether – no company wants to hold a minority stake for 10 years,” said Marc Hammoud, Deutsche Bank telecoms analyst. International revenue rose 9.8 percent last year, but group annual profit fell 19 percent to 7.67 billion riyals ($2.05 billion), largely due to 1.1 billion riyals of foreign exchange losses from its international operations. “Other Saudi companies have been more successful in hedging against FX risk,” said Asim Bukhtiar, Riyad Capital head of research. “STC say this is because it's tied up with partners and can't force them to hedge one way or another, which is one reason STC has sought majority control of its foreign units.”
