The telecommunications wholesale market has undergone a paradigm shift that few industry observers saw coming. What began as a defensive posture against hyperscaler market entry has evolved into one of the most significant strategic realignments in modern telecommunications history. This transformation is perhaps nowhere more evident than in Saudi Arabia’s telecom market, valued at $18.32 billion in 2025, which has catalysed a new model of telco-hyperscaler collaboration that is setting global precedents.
The traditional telecommunications operating model, centered on infrastructure ownership, bandwidth provisioning, and territorial market defense, has proven insufficient for the current digital economy’s demands. Historical competitive frameworks that positioned hyperscalers as direct market threats have given way to more sophisticated partnership strategies that recognise complementary value propositions.
Quantifying the Opportunity
The Middle East’s connectivity landscape is undergoing rapid expansion, driven by major investments in next-generation submarine cables and the growing adoption of content delivery networks (CDNs). Regionally, the subsea cable market is projected to reach $26.11billion in 2025, supported by extensive systems such as AAE1, EIG, TGN, FALCON, SEAMEWE routes, and the PEACE cable, which together carry the bulk of intercontinental traffic and position the Red Sea as a critical corridor linking Europe and Asia.
New initiatives such as the GCC-wide Fibre in Gulf (FIG) cable, connecting seven countries with up to 720 Tbps, are set to further boost intra‑regional digital capacity and support cloud, AI, and data‑center growth.
In Saudi Arabia, momentum is even stronger: the telecom sector currently operates 18 submarine cables, with an additional seven planned by 2030. This expansion will position the Kingdom as having the largest number of submarine cables in the region, reinforcing its strategic role as a hub connecting three continents.
The Saudi Arabia data center market, heavily driven by hyperscaler investments, is projected to reach $3.9 billion by 2030. Rather than watching this gold rush from the sidelines, telcos decided to redefine the game entirely. And here’s the kicker: through cooptation, it became a positive-sum equation where everyone wins.
Saudi’s cloud services market hit $4.77 billion in 2025, forecast to reach $5.52 billion in 2026, and racing toward $11.47 billion by 2031 at a 15.74% growth rate. Saudi telcos built their own cloud empires with the understanding that sometimes you compete, sometimes you cooperate, and sometimes you do both.
Riyadh, Jeddah, and Dammam have emerged as the triumvirate of cloud hubs, not by accident but by design. The telcos planted their flags in these cities long ago, and now they’re reaping the benefits as hyperscalers rush to establish presence in the same locations. It’s a perfect example of competitive positioning that enables cooperative partnerships, brilliant strategic chess played on a national scale.
From Service Delivery to Strategic Advisory
The enterprise customer relationship has evolved beyond traditional service provisioning models. Organisations across finance, healthcare, retail, and government sectors require integrated solutions that address complex regulatory requirements, data sovereignty concerns, and sector-specific compliance frameworks.
Saudi telecommunications providers have successfully leveraged this market shift to establish advisory relationships that extend beyond connectivity services. The ability to navigate local regulatory environments, understand cultural business practices, and provide continuity through organisational changes has proven to be a sustainable competitive advantage. This advisory positioning enables telcos to participate in upstream strategic decision-making processes, creating opportunities for expanded solution sets and deeper customer engagement that pure-play connectivity models cannot support.
Saudi Arabia’s major smart city and infrastructure projects serve as compelling case studies for joint go-to-market execution. The initiatives require synchronised deployment of IoT infrastructure, cloud computing platforms, 5G networks, AI systems, and edge computing capabilities at unprecedented scale and complexity.
No single organisation possesses the full range of capabilities necessary to deliver such comprehensive solutions independently. Joint go-to-market approaches enable both telcos and hyperscalers to address total addressable markets that would otherwise remain inaccessible.
Intelligence at the Edge
The emergence of AI as a primary enterprise technology driver has created new value creation opportunities that favor partnership models. AI workloads increasingly require low-latency processing capabilities, distributed computing architectures, and local data residency options that traditional centralised cloud models cannot efficiently provide.
This technological shift has elevated the strategic value of edge infrastructure and proximity to end users, capabilities where telecommunications providers maintain structural advantages. Partnerships now focus on distributed edge cloud architectures, AI-powered enterprise applications, mobile edge computing platforms, and joint innovation initiatives.
Foreign investment exceeding $21 billion has poured into Saudi data centres and cloud campuses, and the government has thrown another $1.5 billion into digital transformation initiatives. The result? A projected 30% surge in cloud usage is making everyone recalculate their strategies.
The telecommunications industry has reached an inflection point where partnership capabilities have become a primary source of competitive differentiation. Organisations that successfully navigate the transition from competitive to collaborative operating models will be positioned to capture disproportionate value from digital transformation trends. This transition is not only possible but profitable. The companies leading this transformation are actively shaping the future of digital infrastructure and enterprise services.
This opinion piece is authored by Eng. Amjad Arab, Chief Carriers & Wholesales Officer at Salam.
