Aramco Digital’s Investment Is Said To Be Its First Major Transaction In The Telecom Industry As Part Of Saudi Arabia’s Vision 2030 Plan. Credit: Ayman Zaid / Shutterstock.

Aramco Digital is negotiating to invest $1bn to acquire a minority stake in US telecommunications software company Mavenir, Reuters reported.

The potential deal, likely to be signed before the end of the year, could value Mavenir at approximately $3bn.

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Texas-based Mavenir offers Open Radio Access Network (Open RAN) technology, which aims to reduce costs for telecom operators by using cloud-based software and equipment from multiple suppliers.

The company has so far raised at least $800m in funding rounds.

A subsidiary of Middle East energy giant Aramco, Aramco Digital’s investment is said to be its first major transaction in the telecom industry, aligning with Saudi Arabia’s Vision 2030 plan to focus on technological advancements and economic diversification.

The company is also discussing a separate $200m investment in a joint venture with Mavenir for regional technology development.

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The telecom equipment industry, traditionally dominated by Ericsson, Nokia, and Huawei, is said to see a limited US presence.

Mavenir’s Open RAN technology offers an alternative to traditional telecom solutions, although it has not been widely adopted.

A deal between Aramco and Mavenir would likely undergo a US national security review.

However, the US Government signed an agreement with Saudi Arabia in 2022 to collaborate on 5G and 6G network development.

Aramco Digital recently announced plans to build Saudi Arabia’s first Open RAN development centre in partnership with Intel.

A cash infusion from Aramco would enable Mavenir to enhance its 5G technology and prepare for the 6G rollout, amid a downturn in the telecom industry. Aramco Digital recently received a licence to provide wireless services in Saudi Arabia.