Saudi Aramco unit in talks to invest $1bn in US software maker Mavenir
The deal by Aramco Digital would be its first major transaction in the telecommunications industry
November, 2024
Saudi Aramco’s digital arm is in talks to take a significant minority stake in Mavenir, in a deal that is likely to value the US telecommunications software maker at about $3bn.
Aramco Digital is in talks to invest about $1bn in Mavenir and a deal is likely to be signed before the end of the year, people familiar with the matter told Reuters, cautioning that a transaction is not guaranteed.
Mavenir is working with investment bank Evercore on its talks with Aramco Digital, the sources said, requesting anonymity as the discussions are confidential.
The deal by Aramco Digital, the wholly-owned technology subsidiary of the oil giant, would be its first major transaction in the telecommunications industry as part of Saudi Arabia’s Vision 2030 plan, which focuses on technological advancements and economic diversification.
Aramco and Evercore did not immediately respond to requests for comment. Mavenir declined to comment.
The telecom equipment industry, which has long been dominated by vendors such as Sweden’s Ericsson, Finland’s Nokia and China’s Huawei, is one of the few critical areas where US companies do not have a significant presence.
Richardson, Texas-based Mavenir is a pioneer in a technology called Open Radio Access Network that promises to radically cut costs for telecom operators building a mobile network. It uses cloud-based software and allows use of gear from many suppliers instead of relying on a handful of companies.
The company has so far raised at least $800m in various funding rounds.
As the Trump administration took actions to thwart Huawei’s US business, it also pushed for more adoption of Open RAN technologies, which could put more American companies in the mix.
The push to promote Open RAN continued under the Biden administration, but it was not widely adopted as the emerging technology could not always match all the features that traditional telecom vendors could provide.
Last year, AT&T signed a $14bn Open RAN deal with Ericsson for 70 per cent of its wireless network traffic by late 2026, giving a renewed boost to the sector. Sources said the incoming Trump administration may also prioritise development of the technology.
While a deal between Aramco and Mavenir is likely to go through a US national security review, the Biden administration signed a deal with the Saudis in 2022 to cooperate on the technology to build 5G and 6G networks in Saudi Arabia.
As part of the deal with Mavenir, Aramco Digital is in talks to separately invest $200m in a joint venture with the company for technology development in the region.
Aramco Digital in January announced its intent to build Saudi Arabia’s first Open RAN development centre in partnership with Intel. Last week, it received a license to provide wireless services in Saudi Arabia.
