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Telecoms & Networks South Africa

CompCom approves Saudi telecom deal to acquire CMC Networks

The proposed acquisition of CMC by Digital Centre has received approval from the Competition Commission, subject to certain conditions. The deal, which involves a two-tranche merger, brings together two major players in the technology and telecommunications sectors and broadens Saudi Arabia's telecommunications industry reach.
Saudi Arabia is making moves in the global telecoms industry
Saudi Arabia is making moves in the global telecoms industry

Digital Centre, a wholly owned subsidiary of Saudi Telecom Company (STC), is controlled by Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF). The acquiring croup, comprising PIF, STC, Digital Centre, and their subsidiaries, operates in various sectors in South Africa, including renewable energy, water production, and mining.

"This acquisition is a landmark moment for centre3," said Fahad Alhajeri, CEO at centre3 when the STC subsidiary first announced the deal in December 2023.

"CMC's enviable global footprint, high-value customer base and portfolio of capabilities is very complementary to centre3's digital infrastructure and connectivity assets."

CMC Networks operates in over 110 service locations, serving 51 out of 54 countries in Africa and 12 countries in the Middle East, along with regional hubs in key interconnect locations globally. The acquisition aligns with STC's strategic vision for growth and expansion in the Middle East and African markets.

"Joining forces with centre3 is a thrilling development for us," said Marisa Trisolino, group CEO of CMC Networks in the December announcement.

"We share a common vision of further expanding in the African market and together we will be able to achieve more, innovate further, and deliver enhanced value to our customers."

The acquisition is expected to enhance STC's market presence and expand its offerings in the rapidly growing African and Middle Eastern markets.

It also strengthens the Saudi company’s position in the telecommunications sector, complementing its existing digital infrastructure and connectivity assets with CMC Networks' global footprint and diverse capabilities.

Growing Saudi telecom presence

In April PIF acquired a 51% stake in Telecommunication Towers Company Limited (Tawal) from the STC Group. PIF and STC will then combine Tawal and GLIC to form the region’s largest telecom tower company and one of the largest such providers on the globe.

The CMC deal was also rubberstamped a month after CMC launched its Air Connect service in South Africa. This service promises to deliver robust broadband wireless connectivity to businesses in remote and challenging environments, including rural farmland, deserts, and rugged terrains, offering data speeds ranging from 5mbps to over 500mbps, depending on business needs.

Air Connect is positioned as a temporary solution for customers awaiting a fibre build, minimising network downtime. Once fibre connectivity is established, Air Connect can continue to serve as an active backup with an SD-WAN overlay deployment, enhancing network resilience, redundancy, and uptime.

The Commission's approval, subject to certain conditions addressing public interest concerns and promoting economic transformation in the region, paves the way for a potential merger that could reshape the landscape of the technology and telecommunications industries in Africa and the Middle East.

About Lindsey Schutters

Lindsey is the editor for ICT, Construction&Engineering and Energy&Mining at Bizcommunity
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