A major acquisition drive is on the cards for Saudi Telecom Company (STC), according to financial consultancy the Riyadh Capital Group.

STC’s future global operations will account for 50% of its total revenues, up from 34% at present, according to the new report. To facilitate this foreign expansion, the Saudi Arabian telco will invest in high growth markets, increase its stake in existing subsidiaries and seek attractive acquisition opportunities throughout the Middle East, the group forecasts.

The consultancy’s new report suggests the Saudi company is also to undergo reinvestment operations, according to the Saudi Gazette. However, credit is clearly available to STC. Only last month it announced Shariah-compliant financing to the tune of US$1.2 billion for subsidiary Axis and its ambitious broadband network expansion plans in Indonesia.

Riyadh Capital Group said STC’s buy rating of SR52 is currently under its fair price, and the cut in the distribution of dividends does not reflect reduction or diminishing profits. Rather it is a sound decision to achieve future growth. The Saudi telecommunications operator’s strategy to conserve cash will help facilitate this growth in the long term, said the report.