Aramco Digital mulls $1bn stake in Mavenir

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The companies are also reportedly discussing the possibility of forming a $200 million joint venture

Anonymous sources speaking to Reuters suggest that the digital arm of Saudi Arabia oil company Aramco could be preparing to take a minority stake in US telecoms tech firm Mavenir.

The deal, which is not guaranteed to proceed, would see Aramco Digital take a $1 billion stake in the Open RAN specialist, valuing Mavenir at around $3 billion.

Additional funding cannot come soon enough for Mavenir. Last week, a report from Light Reading claimed Mavenir was at risk of defaulting in the face of maturing debts and poor cash flow. Financial analysts from S&P Global, quoted in the article, suggested that Mavenir would be forced to default or restructure if additional funding or an extension of debt maturities could be attained.

Part of the challenge for Mavenir has been the lacklustre adoption rate of Open RAN – a disaggregated, open approach to mobile infrastructure technology of which Mavenir has been a major proponent. Outside of a number of handful of greenfield developments – such as with Dish in the US, Rakuten Mobile in Japan, and 1&1 in Germany – Open RAN technology had gained little traction among major operators.

The global RAN market, which has itself been declining over the past two years, remains dominated by Nokia, Ericsson, and Huawei.

That is not to say, however, that the telecoms industry at large has completely given up on Open RAN. Indeed, Aramco Digital itself has already shown significant interest in the technology, having announced the creation of Saudi Arabia’s first Open RAN Development Centre in partnership with Intel at the start of this year.

Aramco Digital, headed by ex-CEO of Rakuten Mobile and Rakuten Symphony, Tareq Amin, was launched in January 2023 as a part of efforts to diversify the energy company, as well as to align with the Saudi Arabia government’s Vision 2030.

Both the Saudi Arabian government and China-averse President Donald Trump have been significant supporters of Open RAN, potentially offering a more positive environment for the struggling Open RAN market over the coming years.

In addition to taking a minority stake, the report suggests that Aramco Digital is separately discussing the formation of a $200 million joint venture with Mavenir focussed on regional technology development.

Reports suggest the deal could be finalise before the end of the year.

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