Zain 2012 Annual Report


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At Zain, we work hard every day to improve the lives of our customers by introducing them to a wonderful world. Since our reality at Zain couldn't have been possible if we didn't envision it, we are committed to inspiring our customers to follow their dreams and live their full potential. In our world, tomorrow is Zain. You can learn more on our performance in 2012 in our annual report here.

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Zain 2012 Annual Report

  1. 1. ANNUAL REPORT2012
  2. 2. ANNUAL REPORT2012
  9. 9. 803CHAIRMAN’S MESSAGEDEAR SHAREHOLDERS,On behalf of my fellow members of the Boardof Directors, it gives me great pleasure towelcome shareholders once again to theAnnual General Assembly, in which we reviewthe performance of the Zain Group during 2012.The twelve months of 2012 were one of themost difficult periods for our operations as thechallenging global economic outlook persisted,and industry competition in the markets in whichwe operate increased. Our financial indicatorsfor the year ended 31 December 2012 reflectedthose challenges – the evidence of such beingthe sharp currency translation impact that costthe Group’s bottom line around USD 109 million.However, the Group’s overall operationalperformance remained within expectationsthanks to our flexible business plans thathelped maintain a high level of operationaloptimization despite the challenges.In 2012, the IT and telecommunications industrywitnessed major changes that led to thewidespread convergence of the smartphone,tablet computer and telecommunications. Thenumber of smartphones and tablet computersare forecast to double within the coming coupleof years according to industry statistics.On the face of the aforementioned challengesand drivers, our operations continue to evolveand encompass new areas of growth in thefield of IT and telecommunication services,having already undergone a wide series ofdevelopment projects that aim to introduceimproved quality and efficiency levels to theGroup’s portfolio of services in its main markets,including Kuwait, Saudi Arabia and Iraq.In parallel with the development projects itimplemented in its networks in 2012, the Groupcontinued to adhere to its policy of reducing itsadministrative, operational and finance costs,having implemented innovative plans thathave managed to cut considerably the financeexpenses in 2012.Our journey of success and leadership was furtherdemonstrated by our operational results for 2012with Zain Group generating net income of USD902 million, earnings per share of USD 0.23,and consolidated revenues of USD 4.58 billion.ZAIN ANNUAL REPORT I 2012
  10. 10. 9EBITDA for 2012 amounted to USD 2.04 billion.Shareholders equity stood at USD 6.09 billion,while the Group’s consolidated customer basegrew by 6% to stand at 42.7 million activecustomers at the end of 2012, up from 40.2million at the end of 2011.These results reflect relative stability in theGroup’s key financial indicators for the year.As mentioned above, without the effects of thesharp currency translation impact, consolidatedrevenues would have amounted to USD 4.88billion, while EBITDA would have been USD2.15 billion, and net profits USD 1 billion.Zain Group entered a number of strategicpartnerships with global companies during thecourse of 2012 with the dual aim of reinforcingits operational position on the one hand andmaximizing its value proposition to customerson the other.During 2012, Zain Group inaugurated its firstLTE network in Saudi Arabia, followed by acommercial launch in Kuwait. This represented asignificant milestone in Zain’s strides to maintainits technology leadership.The launch of our LTE network in Kuwait wasanother certificate of leadership as Zain Kuwaitbecame the first local operator to offer cutting-edge LTE technology on a nationwide basis.Not only does this step represent a qualitativeleap, but it is set to further bolster Zain Groupscompetitive capabilities in two of its key marketsof operation.In Saudi Arabia, Zain KSA successfully completedits USD 1.6 billion rights issue with a full subscrip-tion during the summer; a development thatformed part of a wider plan to restructure thecompany’s capital. Zain Group continued toback its Saudi Arabia operation both administra-tively and financially, having taken the strategicdecision to increase its ownership in Zain KSAto 37% in the wake of the company’s rights issue.The administrative and financial support fromZain Group ensured that Zain KSA improved itsfinancial performance and results in 2012, whichsubsequently led to a reduction in the Saudioperators net loss by 9% year-on-year in 2012.We expect that the economic situation in Sudan and South Sudan toimprove, which will subsequently allow Zain to again benefit from thesubstantial growth of our operations in those countries, despite thefurther challenges presented by the heightened taxation, which hasdoubled from 15% to 30%, in addition to a hike in fuel costs in 2012.In 2012, our operation in Iraq continued to be the market leader withrespect to customer numbers and we expect further tangible growthopportunities there, especially on the back of the widespread expansion ofour network into the northern regions of the country. Zain Group is alsointensifying its efforts towards listing its Iraq operation on the Iraq StockExchange by 2013 as stipulated by the company’s license.Intent to honor and renew its corporate social responsibilities and duties,the Group has launched a series of initiatives and programs to enhance itspartnership with the communities in which it operates. One such initiativewas the successful launch of Zain Groups inaugural Sustainability Reportin which it offers an account of the socio-economic and environmentalimpact of its business operations. This report represented a strongverification of Zains serious efforts in becoming a corporate entity thattruly considers the wellbeing of the people of the region.Thanks to our wealth of highly qualified professional employees, we areconfident that Zain Group will continue to provide highly sophisticatedtelecommunications services to meet the aspirations of our customers.I would like to take this opportunity to express my deep appreciation forthe trust placed in all our strategic decisions by Zain’s shareholders.Thistrust has been a major factor in encouraging the management of the Groupto drive the company to its strong position. I would also like to extend mydeep thanks to my fellow Board Members and executive management fortheir outstanding efforts during 2012.In conclusion, on behalf of all my fellow members of the Board of Directorsand the executive management, as well as all employees of the Group, Iwould like to offer our deepest gratitude and appreciation to His Highnessthe Amir of Kuwait, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah; HisHighness the Crown Prince Sheikh Nawaf Al-Ahmad Al-Jaber Al- Sabah;His Highness the Prime Minister Sheikh Jaber Al-Mubarak Al-Sabah; andto the esteemed members of our government for their continued supportof Kuwait’s companies and organizations.May God the Almighty keep our country safe and prosperous.Asaad Ahmed Al-BanwanChairman, Board of Directorsnted to USD 2.04 billion.tood at USD 6.09 billion,onsolidated customer baseWe expect that the economic situation in Sudan and South Sudan toimprove, which will subsequently allow Zain to again benefit from thesubstantial growth of our operations in those countries, despite the
  11. 11. 1004CEO STATEMENT10"The TelecommunicationsIndustry in undergoing astructural and paradigm shiftand operators must evolve tomeet the new challenges posedby significant data explosion,the high capital expenditureand investment required forfrequency spectrum acquisitionand the construction of high-speed networks as well as themedium and long-term impactof over-the-top players onservice offerings. Furthermore,the role being played byservice providers, particularlythose operating in emergingmarkets, has become criticalto the continued growth anddevelopment of economiesand societies. Zain Group aimsto continue to profitably deploythe necessary infrastructureand services to fosterenhanced customer experienceacross our markets and to meetthe return objectives of ourshareholders."ZAIN ANNUAL REPORT I 2012
  12. 12. 11DEAR SHAREHOLDERS,Over the last 29 years, Zain Group has establisheditself as a formidable multinational telecommu-nications operator with an international bench-mark and track-record of deploying best-in-class and advanced telecommunicationsnetworks. As the recently appointed GroupCEO, I am pleased to have joined yet anotherorganization of experienced executives, andskilled personnel with a singular vision anda passion to create an enriching and inspir-ing experience and service for our customers;to transform the way we do business and tomaximize returns to shareholders. I would liketo thank the Board of Directors, the executivemanagement and over 6200 talented employ-ees who make up the rank-and-file of ZainGroup for the company’s achievements in 2012.The telecommunications industry is goingthrough a structural and paradigm shift andtelecommunications operators are evolving theirstrategies, business processes and productofferings to meet the ensuing developments.Worldwide, the accelerated deployment androllout of post-3G Long term Evolution (LTE)networks; the move towards an all IP-architectureand the high penetration of smartphones andtablets are expected to reflect a significantgrowth in mobile broadband data usage, withindustry experts predicting of up to 92%cumulative annual growth rates for mobile datain the run-up to 2015. However, telecommuni-cations operators also have to contend with theimpact and dominance of over-the-top("OTT") players who, with the move towardsall-IP infrastructure, are able to propose andlaunch IP-based services such as IP messaging,voice-over-IP or video-on-demand services whichclearly compete with offers from incumbentlicensed mobile telecommunicationsplayers. Whilst OTT players are not subjectto telecommunications regulations and donot have to pay telecommunications licencefees or invest in building broadband super-highways and infrastructure required todeliver services, they are able to act as directcompetitors and have unfettered access toreach customers.Traditional mobile operators are evolving their business models to embracestrategic partnerships with OTT players to ensure that the two groups ofindustry participants (traditional and OTT players) can provide complementaryand rich product offerings to meet customer demands, develop appropriateapproaches to the monetization of data services and still provide returnsto their respective shareholders.Tough political and macroeconomic conditions, including currency volatility,have also had a marked impact on our industry and have made revenuegrowth challenging.Zain Group is and will continue to adapt its systems, processes, and infra-structure and business models in a changing world and, as good corporatecitizens, to continue to contribute towards the macro and micro-economicdevelopments in the countries where we operate. Furthermore, theorganization is focusing on business transformation and optimization to realizeoperational efficiencies and group-wide synergies. We enjoy the advantagesof our extensive regional footprint with a commercial point of presence in8 countries, leading market share position in 5 markets, state-of-the-artnetworks including high-speed HPSA+ and LTE deployments, innovativeservices, and talented workforce.REVIEW OF 20122012 witnessed significant changes in market dynamics, in the competitivelandscape and consequential slower growth. Throughout the year, Zain Groupfocused on maintaining sustainable financial health and market leadershipas well as enriching its product portfolio and enhancing customer experience.These have been underpinned by entering into value-added strategicpartnerships and by modernizing its network infrastructure, information tech-nology systems and billing and customer relationship management platforms.Our 2012 consolidated revenues reached USD 4.58 billion, down 4.4% fromUSD 4.79 billion recorded in 2011. Earnings before interest, tax, depreciationand amortization (EBITDA) for the year amounted to USD 2.04 billioncompared to USD 2.18 billion in 2011, representing an attrition of 6.4%.Net income amounted to USD 902 million, with an earnings per share (EPS)of USD 0.23 compared with a net income of USD 1.033 billion, and anEPS of USD 0.27 in 2011. These financial metrics were recorded againstthe backdrop of adverse currency translation effects, largely in theRepublic of Sudan, which negatively impacted the group’s net incomeposition by USD 109 million.On the market leadership front, as of 31st December 2012, our customerbase reached 42.7 million reflecting a 6% growth in customers year-on-year.This growth has been driven by an increase in the customer base in fourof our operations: Jordan (26.8% growth), Bahrain (21.3% growth), Iraq(10.2% growth) and Lebanon (6.2% growth). We have also continued tosustain leadership in five markets: Kuwait, Jordan, Iraq, Republic of Sudanand South Sudan.In 2012, the strategic collaborations and corporate alliances, which ZainGroup entered into, provided very essential complementary customerproducts and services as well as technical know-how and best mobile operators are evolving their business models to embracec partnerships with OTT players to ensure that the two groups ofy participants (traditional and OTT players) can provide complementarych product offerings to meet customer demands, develop appropriateches to the monetization of data services and still provide returnsshareholders.i conditions, including currency volatility,and have made revenue
  13. 13. 121204CEO STATEMENTZAIN ANNUAL REPORT I 2012T I 2012refinancing efforts for the approximately SAR 9billion (USD 2.4 billion) Murabaha facility.We firmly believe in the potential for growthin the Saudi telecommunications market,particularly in the area of mobile broadband,managed enterprise offerings and enhancedcustomer services and Zain Group is committedto continue to bolster efforts to capture marketshare and to move towards profitability.Lastly, in line with its telecommunications licencerequirements, Zain Group’s Iraqi subsidiaryis preparing for a listing on the Iraq StockExchange (ISX). Zain Iraq has witnessed growthon all metrics – revenues (7% growth), EBITDA(3% growth), net income (6% growth) andcustomers (10% growth). We expect 2013 to bean exceptional year for Zain Iraq, with the operatorexpecting tangible growth opportunities drivenprimarily by its investments in the northern regionsof the country.LOOKING FORWARDThe telecommunications industry is experiencingone of the most prolific periods of change,disruption and innovation. Change is good butmust be effectively managed and Zain Groupis poised to capitalize on the opportunitiesfor innovation, business transformation andfinancial discipline.I am confident that in the years ahead thecompany will continue to deliver exceptionalvalue to its stakeholders.I extend my appreciation to the Zain team formaking Zain the admirable telecom company itis today. I am grateful also to the Boardof Directors, shareholders and our valuedcustomers for their unwavering support.M. Scott GegenheimerZain Group CEOIn March 2012, Zain Group partnered with Microsoft to bring WindowsPhones to MENA markets; Zain Group also entered into a strategic agreementwith iPass™ Open Exchange to support global roaming on Wi-Fi. The iPasspartnership has enabled Zain Group operators to offer high-quality andaffordable data connectivity to its roaming customers in 117 countriesaround the world.In September 2012, Zain Group signed a non-equity, Multi-Country PartnerMarket Agreement with Vodafone, providing complementary benefits toboth organizations and enhancing their respective abilities and reach to meetgrowing demand among multinational businesses for sophisticated voiceand data communications solutions as well as advanced roaming serviceswithin the Middle East. Through the partnership agreement, Zain Groupis able to secure greater access to Vodafone’s global footprint and to leverageVodafone’s commercial insights, technical expertise and procurementsynergies to improve operational efficiencies for the company in the shortto medium term. Zain will continue to leverage Vodafone’s Global Enterprisesolutions for multinational corporations and will work closely with Vodafoneon achieving harmonized roaming rates across multiple countries.In December 2012, as part of its strategy to enhance wholesale internationalconnectivity amongst its operations, Zain Saudi signed an international carrierinterconnect partner agreement with the Ministry of Communications in thestate of Kuwait, providing Zain KSA with an opportunity to secure a greatershare of the international carrier business to and from Kuwait.On the advanced network deployment front, Zain Kuwait continued the trendof innovation by deploying the first commercially available, nationwide,4G long term evolution (LTE) network in the state of Kuwait in the fourthquarter of 2012. We also strengthened and enhanced the network coverage- targeting 98% - 100% population coverage - in each of our markets byincreasing the number of sites deployed.In April 2012, Zain Group acquired an 802.16e WiMAX data services operator,Mada Jordan, with coverage in the major cities of Jordan. This has enabledus to complement our 3G and HSPA+ offerings to the Jordanian market and,similar to the approach we are taking with our business in Bahrain, launchintegrated fixed wireless access and mobile offerings to customers.We continue to demonstrate very strong commitment and resolve towardsour operation in the Kingdom of Saudi Arabia. In July 2012, Zain KSAsuccessfully completed its capital restructuring plan involving a 65.7%capital reduction (from SAR 14 billion or USD 3.733 billion to SAR 4.801billion or USD1.28 billion) followed by a SAR 6 billion (USD 1.6 billion)rights issue which saw the conversion of shareholder loans amountingto approximately SAR 2.5 billion (USD 679 million) into equity and theinjection of approximately SAR 3.5 billion (USD 921 million) in fresh capitalinto the company.Zain Group participated in the rights through debt conversion, equivalentto SAR 1.5 billion (USD 400 million), and through over-subscription in cashamounting to SAR 1.301 billion (USD 347 million), thereby increasing equityownership from 25% to 37.045%. Furthermore, we continue to support theZAIN ANNUAL REPORT I 2012
  14. 14. 131313313
  17. 17. 161606ZAIN ANNUAL REPORT I 2012ZAIN ANNUAL REPORT I 2012KEY PERFORMANCE INDICATORSZain Saudi Arabia is an associate company (not consolidated)ZAIN ANNUAL REPORT I 2012
  18. 18. 1717*Excluding capital gain of USD million 2,653 from the sale of Zain Africa in 2010.
  22. 22. 21Source: Thomson Reuters1/1/2010 - 1/1/2013 (RIY)
  23. 23. 09GROUP HIGHLIGHTSOPERATIONAL EVENTSFOR THE FULL YEAR OF 20121 JANUARYZain Group increases its stake in Zain Iraq to 76%.19 JANUARYZain Sudan connects the 1,000th city - Albeala - toits modern network, which happens to be thelargest in the country, enjoying population coverageof over 90%.27 FEBRUARYZain Group records a significant presence at the MobileWorld Congress 2012 in Barcelona.4 MARCHZain Group enters into an agreement with MicrosoftMiddle East and Africa to bring Windows Phone devicesto the Middle East and North Africa.7 MARCHZain Group selects Neustrings OptiPrizer software forpredictive analytics across seven Middle East marketsto improve the cost and quality of roaming services.14 MARCHZain Group signs an agreement with iPass which Zain will provide its mobile customerswith global Wi-Fi data roaming services.24 APRILZain Saudi Arabia is awarded the Customer360 ME Award at the "Customer Experienceand Service Excellence Summit and Awards2012" held in Dubai. Zain KSA was the winnerof the Best Technology category for its provencustomer experience improvements and thesuccessful implementation of its CRM program,dynamic systems and new measurement tools.30 APRILZain South Sudan pioneers the launch of highspeed Internet services and ranks as the bestmobile operator in the Republic of South Sudan.The companys Internet service also contributessignificantly to the social and economicdevelopment of the country.DREAM ASIF THEWORLD IS INTHE PALMOF YOURHANDS. YOURDREAMSARE ABLETO CHANGETHE WORLDAROUND YOU.22ZAIN ANNUAL REPORT I 2012
  24. 24. 2311 MAYZain Sudan celebrates its anniversary marking15 years of operation with a first of its kind showin the country. The event incorporated thelargest 3D projection screen, best surroundsound and the biggest display of the Sudanflag, in the presence of around 5,000 invitees.16 MAYZain Iraq, in cooperation with the KurdistanRegional Government, sponsors the "ImagineCup: Kurdistan," which is a student technologycompetition initiated by Microsoft to solve oneof the main problems listed within the eight UNMillennium Development Goals.MAY 27Zain South Sudan announces the expansionof voice and Internet services into rural areasand becomes the first operator with the widestnetwork coverage both in rural and urban settingsin the Republic of South Sudan.5 JUNETouch Lebanon launches a road safety campaign titled, "AvoidDistracted Driving" in collaboration with YASA (Youth Associationfor Safety Awareness).7 JUNEZain Bahrain introduces the "better than free" campaign, making the verylatest smartphones, such as the Apple iPhone5, the Samsung Galaxy S IIIand the Huawei Media Pad 10FHB, accessible and affordable.13 JUNEZain highlights a series of projects during the inaugural JP Morganinvestment conference.19 JUNETouch Lebanon unveils its new identity.11 May19 June 4 March16 May
  25. 25. ‫ﻛﺮﻳﻢ‬ ‫رﻣﻀﺎن‬.‫ﻧﺸﺮﻫﺎ‬ ‫ﺣﻘﻮق‬ ‫ﻟﻚ‬ٌ‫ﻓﻜﺮة‬ ‫اﻟﺴﻌﺎدة‬NP 35.5x52 A.indd 4 7/17/12 3:03 PM09GROUP HIGHLIGHTSOPERATIONAL EVENTSFOR THE FULL YEAR OF 2012ZAIN ANNUAL REPORT I 201210 JULYZain Sudan applies unprecedented per secondbilling to all customers and offers a 15% discounton voice calls as a "thank you" to its 13 million+loyal customers.25 JULYZain Group increases its shareholding in ZainSaudi Arabia to 37.045% through participationand oversubscription in Zain KSAs rights issue,which was completed on 17 July 2012. ZainGroup, which previously owned 25% of theSaudi Arabian mobile operator, subscribed toits full entitlement in the Zain KSA rights issuethrough the conversion of USD 400 millionof shareholder debt and oversubscribed byUSD 346.93 million, at the issue price of SAR10 per share.31 JULYZain Group enters a strategic partnership withPCCW Global, the Hong Kong-based providerof voice and data solutions, to cooperate inthe development and offering of internationaltelecommunications services.3 AUGUSTZain South Sudan introduces Me2u serviceas an answer to money transfer problems inthe Republic of South Sudan. The serviceattracts a wide range of customers.12 AUGUSTTasaweek, the specialized online marketingmagazine, ranks Zain Groups "Fikra" televisioncommercial first in Kuwait in competition with23 other television advertisements.3 SEPTEMBERZain Group and Vodafone announce a multi-country Partner Market agreement that providesZain with greater access to Vodafones globalfootprint and significantly expands Vodafonespresence in the Middle East. The agreement alsoadvances both Zain and Vodafones ability todeliver communications services to multinationalbusinesses both in and out of the region.10 July1 October3 September 12 August24
  26. 26. 7 SEPTEMBERIn cooperation with the South Korean governmentand the Iraqi Ministry of Higher Education andScientific Research, Zain Iraq sponsors the visitof a South Korean medical delegation from theUniversity of Wonkwang to discuss cooperationopportunities in the fields of education andtraining. The delegation also discusses ways inwhich to provide medical treatment to severalIraqi children in South Korea.17 SEPTEMBERZain Saudi Arabia announces the readinessof its network to support 4G services utilizingspectrum at GSM 1800. The company alsoannounces the availability of Nano SIMs.22 SEPTEMBERZain Bahrain announces a major investmentof $100 million over two years (2012/2013) toits network infrastructure, ensuring that it staysat the cutting-edge of technological innovation.24 SEPTEMBERZain Iraq sponsors the first Information andCommunications Technology fair in Iraq.GROWTH FORA WONDERFULWORLDSUSTAINABILITY REPORT 201130 SEPTEMBEREleven female executives from across Zain Group rank in the inauguralCommsMEA list of Top 50 female telecommunications professionalsacross the region.1 OCTOBERZain South Sudan becomes the first mobile operator in the Republic of SouthSudan to commercially launch a ring-back tone service (Zain MuZica).2 OCTOBERZain Jordan recognized as Best Network Operator, Best Operator withrespect to a VAS (value-added services), and Best E-wallet Service duringthe Telecoms World Middle East Awards in Dubai.22 OCTOBERZain Group launches its inaugural sustainability report, entitled "Growthfor a Wonderful World." Zain is one of the first operators in the region tooffer an account of the socio-economic and environmental impact of itsbusiness operations.4 NOVEMBERIn cooperation with the United Sports Company (GOAL), Zain Kuwait launchesa three-month long national football tournament.5 NOVEMBERZain Group holds its 2nd annual Zain Technology Conference in Dubai.22 October 4 November 17 September25
  27. 27. 09ZAIN ANNUAL REPORT I 201211 NOVEMBERZain Jordan and Airport International Group (AIG) sign an agreementby which Zain is to assume the management of the informationand communications network in the new terminal at Queen AliaInternational Airport. Zain will provide advanced infrastructure toaccommodate the large numbers of travelers in the airport terminal.20 NOVEMBERZain Kuwait launches its 4G LTE network, becoming the first operatorto provide the latest mobile Internet technology nationwide.26 NOVEMBERFor the first time in Lebanon, Touch launches MyPlan bundles with adiscount up to 45%, giving post-paid customers the choice to customizetheir lines.30 NOVEMBERTo meet the increasing demands of customers and to keep up with the vastgrowth in voice and data consumption rates, Zain Jordan expands its 2Gand 3G network across the Kingdom by another 482 sites.26 November30 NovemberGROUP HIGHLIGHTSOPERATIONAL EVENTSFOR THE FULL YEAR OF 201220 November26
  28. 28. 16 December5 December20 December2 December2 DECEMBERZain Group appoints Scott Gegenheimer as CEO.5 DECEMBERZain Groups corporate website ranks firstamongst listed companies in Kuwait for a thirdconsecutive year, while Zain KSAs websiteranks third amongst all listed companies inSaudi Arabia.16 DECEMBERZain is chosen as Kuwaits best CSR organizationby The Arab Organization for SocialResponsibility, based on its rich CSR program,which includes many activities and initiativessuch as the Taaleb E-Learning Project, theMicrosoft Imagine Cup 2012, Shoof Zain andthe Zain Hospital.20 DECEMBERZain Saudi Arabia signs an interconnect agreementwith Kuwaits Ministry of Communications.27
  30. 30. 29*Zain Saudi Arabia is an associate company (not consolidated)
  31. 31. 30OVER 42.7MILLION ACTIVECUSTOMERS IN 8COUNTRIES**Excluding Morocco, where Zain has a 15.5% ownership in the mobile operator "Inwi"THE NUMBERS SHOW ACTIVE CUSTOMERS YEAR END 201211THE WORLD OF ZAIN30ZAIN ANNUAL REPORT I 2012
  32. 32. 3131
  34. 34. 33
  35. 35. 34OPERATIONS SNAPSHOTSKUWAITZain Kuwait was able to improve its marketposition and boost its customer growth,expanding its base by 7% in 2012 to reach2.3 million and contributing 5% to the Groupstotal customer base. The growth in customerscame after the introduction of new offers,including the launch of smartphones such asthe iPhone 5 and the Samsung Galaxy family.The official launch of LTE, together with thesale of 4G devices and other promotions,such as the Wiyana portal, Zain Teen, PremierLeague and BlackBerry in the box, Hybrid VPN,8GB for KD 8 (USD 28), all also contributedto growth in the number of customers addedduring 2012.The postpaid segment accounted for 30%of Zain Kuwaits customers at the end of 2012,with prepaid users accounting for the remainder.The operator continues to have one of thehighest ARPU levels in the Groups portfolio,standing at USD 42, which in turn generatedtotal revenue of USD 1.2 billion and EBITDAUSD 584.1 million in 2012. Net profit forthe year reached USD 408.3 million, a YoYdecrease of 12%, mainly due to the increasein capex over the period, which was investedin the enhancement of the network andamounted to USD 161 million.The launch of LTE by Zain Kuwait in the fourthquarter of 2012 was a significant milestone,with the network covering the entire populationthrough 1,765 network sites. The decrease inthe number of sites compared to 2011 is dueto merging some sites after the LTE launch.Zain Kuwait customers also continue to enjoythe performance of the best call center inthe country with a remarkable response timeof just 3-4 seconds and resolution to theirinquiries in around two minutes.Looking forward, Zain Kuwait is following twomain strategic objectives: First, to consistentlyexceed customer expectations at all touchpoints; and second, to enhance its data networkhaving launched LTE nationwide with the viewto improving the user experience.Founded in 1983, Mobile TelecommunicationsCompany (MTC) was Kuwaits first mobileoperator. In 1994, it made history by becomingthe first telecom operator to launch a commercialGSM service in the region. The mother ship of allZains mobile operations across the Middle East,Zain is listed on the Kuwait Stock Exchange witha market capitalization of over USD 12 billion, asof December 2012.Despite the competition from rivals, Zaincontinues to be the market leader, commanding42% market share.VivaWataniyaZain42%37%21%MARKET SHAREPostpaidPrepaid1,581 1,4106946712,252 2,104PostpaidPrepaid20112012CUSTOMERS (000s)12ZAIN ANNUAL REPORT I 2012
  36. 36. 35Operational & Financial Performance 2012 2011 2010YOY Growth(12 vs 11)Customers (000s) 2,252 2,104 1,870 7%Revenues (USD m) 1,186.7 1,247.3 1,204.3 (5%)EBITDA (USD m) 584.1 607.9 569.5 (4%)EBITDA % 49% 49% 47% –Net Profit (USD m) 408.3 465.6 446.9 (12%)ARPU $42 $49 $52 –Capex (USD m) 161.2 105.7 70.7 53%Financials: P&L (USD m) 2012 2011 2010 CAGRGross Revenues 1,186.7 1,247.3 1,204.3 (1%)Cost of Sales 326.8 351.1 333.0 (1%)Gross Margin 859.9 896.2 871.3 (1%)Opex 275.8 288.3 301.8 (4%)EBITDA 584.1 607.9 569.5 1%Net Profit/(Loss) 408.3 465.6 446.9 (4%)Capex Breakdown (USD m) 20122012 20112011Capex 161.2 105.7Network 123.7 86.7IT 32.5 17.5Others 5.0 1.5NETWORK PERFORMANCENetwork Quality KPIs2G Network availability 99.9%3G Network availability 99.9%LTE Network availability 100%2G Call setup success rate 99.7%3G Call setup success rate 99.1%LTE ERAB setup success rate 100%2G Drop call rate 0.27%3G Drop call rate 0.25%LTE Drop call rate 0.8%2G and 3G drop call rates are less than 1% as per international standards ERAB: Evolved Radio Access BearerBroadband KPIsAverage daily data volume (TB) 62Service Availability KPIsContact center availability 100%
  37. 37. 36OPERATIONS SNAPSHOTSIRAQLeading the Iraqi mobile market, with a 50%market share, and counting a customer baseof over 13.7 million, Zain Iraq constitutesthe Groups largest overall customer base,accounting for 32% of the total base at theend of December 2012.Zain Iraqs prepaid segment accounted for 99%of its total customer base in 2012, with just 1%accounted for by the postpaid segment.The operators revenues for the year amountedto USD 1.7 billion, up by 7% YoY, while EBITDAincreased by 3% to USD 766 million. Zain Iraqsrevenue represented 38% of Zain Groups totalconsolidated revenues for 2012. Net profit forthe period showed YoY growth of 6%, risingto USD 369.1 million, with the ARPU levelstanding at USD 11 for the year.Zain Iraq continues to strengthen its marketposition by focusing on the northern Iraqregion of Kurdistan; by enhancing the voiceARPU generated; and by developing mobiledata and value added services. Moreover,specialized offers are being put in place toreduce churn. Zain Iraq is also actively workingtoward increasing regional presence as wellas coverage and capacity.The operator is currently preparing to launch aninitial public offering (IPO), with several regionaland international investment banks and otheradvisors engaged in the process. The IPO is inaccordance with Zain Iraqs license agreement,with the view to allowing Iraqi citizens to ownshares and benefit from the tremendous growthof the operator. The IPO process is set to occurduring the first half of 2013.The operator invested USD 152 million in capexduring the course of the year, mainly on networkmodernization that also enhanced mobile phoneservices in the northern Iraq region of Kurdistan.Zain Iraq counted 3,724 sites across Iraq, withpopulation coverage of 98%.Zain has been providing mobile services inIraq since December 2003. After securing a15-year license in August 2007, Zain acquiredIraqnas network, becoming the largestmobile operator in the country. Zain Groupsubsequently increased its ownership from30% to 76%, assuming majority control.50%36%14%KorekAsiaCellZainMARKET SHARE9613,6118012,35513,70712,435PostpaidPrepaid20112012CUSTOMERS (000s)12ZAIN ANNUAL REPORT I 2012
  38. 38. 37Operational & Financial Performance 2012 2011 2010YOY Growth(12 vs 11)Customers (000s) 13,707 12,435 12,074 10%Revenues (USD m) 1,732.6 1,617.6 1,500.4 7%EBITDA (USD m) 766.0 744.7 715.4 3%EBITDA % 44% 46% 48% –Net Profit (USD m) 369.1 348.1 320.1 6%ARPU $11 $11 $11 –Capex (USD m) 152 113.6 84.5 34%Financials: P&L (USD m) 2012 2011 2010 CAGRGross Revenues 1,732.6 1,617.6 1,500.5 7%Cost of Sales 551.6 485.2 443.7 12%Gross Margin 1,181.0 1,132.4 1,056.8 6%Opex 415.0 387.7 341.3 10%EBITDA 766.0 744.7 715.4 3%Net Profit/(Loss) 369.1 348.1 320.1 7%Capex Breakdown (USD m) 20122012 20112011Capex 152 113.6Network 147.5 101.1IT 2.4 9.1Others 2.1 3.4NETWORK PERFORMANCENetwork Quality KPIs2G Network availability 99.39%2G Call setup success rate 96.21%2G Drop call rate 0.66%2G drop call rate is less than 1% as per international standardsBroadband KPIsAverage daily data volume (TB) 1Service Availability KPIsContact center availability 99.3%
  39. 39. 38OPERATIONS SNAPSHOTSJORDANSignificant price competition and falling voiceprices characterize the telecom market in Jordan,though Zain Jordan was still able to increase itsmarket share to 38% at the end of 2012, up from37% in 2011. The operator counted 3.5 millioncustomers as of year-end 2012, representinga dramatic increase of 27% compared to 2011.This base accounted for 8% of Zains total customerbase at the end of 2012.Zain Jordan generated total revenue of USD509.3 million in 2012, up 0.7% YoY. Howevernet income for the year reached USD 121.6million, a decrease of 8% as compared to2011, and EBITDA was down by 2% to USD225.7 million due to the approximately 150%increase in electricity rates especially forthe telecommunication sector. Zain Jordancontributed 11% to the Groups consolidatedrevenues. Capex for the year saw an increaseof 34% to reach USD 32 million.During 2012 Zain Jordan launched a numberof promotions including Super Zain Al Kul andLayl & Nahar, targeting the prepaid segment; AlShahammeh, targeting the army; Mish Tabeei 2,targeting the youth, as well as the Twitty serviceand Roaming Plus.Going forward, Zain Jordan plans to focus onmaintaining its market leadership across varioussegments by retaining existing customers as wellas increasing its share in segments in which itcurrently has relatively low shares. The operatorintends to achieve this by offering products thatare based on the needs of the market, witha particular emphasis on broadband, wherepenetration remains relatively low.As of year-end 2012, Zain Jordan had achieved100% 2G coverage and 97% HSPA+ coveragefor the population area, increasing its totalnumber of sites to 1,597.In 1994, Zain Jordan revolutionized the telecomsector in the Kingdom by becoming the first tointroduce mobile services (as Fastlink). In 2003,the operator became the first to join ZainGroups Middle East portfolio and, despiteintense competition in this liberalized market,Zain Jordan has remained the leading telecomoperator in the country.2,3522,997492399PostpaidPrepaid201120123,4892,751CUSTOMERS (000s)38%37%25%UmniahOrangeZainMARKET SHARE12ZAIN ANNUAL REPORT I 2012
  40. 40. 39Operational & Financial Performance 2012 2011 2010YOY Growth(12 vs 11)Customers (000s) 3,489 2,751 2,488 27%Revenues (USD m) 509.3 505.8 514.2 1%EBITDA (USD m) 225.7 231.5 228.5 (3%)EBITDA % 44% 46% 44% –Net Profit (USD m) 121.6 131.6 143.9 (8%)ARPU $12 $15 $16 –Capex (USD m) 31.8 23.8 70.9 34%Financials: P&L (USD m) 2012 2011 2010 CAGRGross Revenues 509.3 505.8 514.2 (0.5%)Cost of Sales 140.2 141.7 150.2 (3%)Gross Margin 369.1 364.1 364.0 1%Opex 143.3 132.5 135.4 3%EBITDA 225.7 231.5 228.5 (1%)Net Profit/(Loss) 121.6 131.6 143.9 (8%)Capex Breakdown (USD m) 20122012 20112011Capex 31.8 23.8Network 34.6 17.2IT – –Others (2.8) 6.6NETWORK PERFORMANCENetwork Quality KPIs2G Network availability 99.6%3G Network availability 99.8%2G Call setup success rate 97.4%3G Call setup success rate 98.0%2G Drop call rate 0.37%3G Drop call rate 0.60%2G and 3G drop call rates are less than 1% as per international standardsBroadband KPIsAverage daily data volume (TB) 38Service Availability KPIsContact center availability 100%2012 2011 2010YOY3,489 2,751 2,48809.3 505.8 514.2231.5 228.546% 44%131.6 1435
  41. 41. 40OPERATIONS SNAPSHOTSREPUBLIC OF SUDANAlong with the political unrest in the regionduring 2012, Sudan has also experiencedeconomic turmoil, where the currency hasdevalued by up to 65% during the periodthat led to a new exchange rate for USD/SDG,which increased from 2.7 to 5.9 and wasadopted by the Central Bank of Sudan.Most of Zain Sudans customer growth isdriven by the robust prepaid segment, whichcontributed 99% to the operators overallcustomer base. The postpaid base remainsflat, representing just 1% of the overall base.Increasing competition in the Sudanesetelecom market and the separation into twodifferent countries, which occurred by the endof 2011, have contributed to a falling ARPU,which stood at USD 6 at the end of 2012.On the regulatory front, the NationalTelecommunications Corporation issuedseveral regulatory updates during the courseof the year, including raising the income tax to30% as of the beginning of 2012, and settingthe sales tax (VAT) at 30%.During 2012, Zain Sudan revamped pricing inthe prepaid and postpaid segments, launchednew products and offers and incorporated persecond billing. Omra and pay-as-you-go tariffswere introduced together with a range of handsetsand the"Zain Aalin" mobile advertising campaignthat allows companies to advertise their products,services and promotions through a system ofnotification footers.Zain Sudan added 146 new sites during 2012,bringing the total number to 2,179 at the endof the year with 87% population coverage and35% geographical coverage.In February 2006, Zain acquired the remaining61% stake of Mobitel in a deal valued atUSD 1.332 billion. Mobitel is Sudans firstmobile operator, which became wholly ownedby Zain Group. The company was rebrandedto Zain in September 2007 and subsequentlyrenewed its license for a period of 20 years.Although aggressive competitive campaignsand price cuts are a factor within the Sudanesemobile market, Zain has continued to be thedominant mobile operator in the country,garnering 52% market share. The operatorscustomer base is the second largest amongthe Group, accounting for more than 12.5million at the end of 2012. This represented29% of Zain Groups total customer base,while Zain Sudan contributed 19% of theGroups overall revenues in 2012.12,444PostpaidPrepaid20129112,535CUSTOMERS (000s)52%24%24%MTN SudaniZainMARKET SHARE12ZAIN ANNUAL REPORT I 2012
  42. 42. 41Operational & Financial Performance 2012 *2011YOY Growth(12 vs 11)Customers (000s) 12,535 13,060 (4%)Revenues (USD m) 864.2 1,091.1 (21%)EBITDA (USD m) 355.6 532.5 (33%)EBITDA % 41% 49% –Net Profit (USD m) 48.8 275.0 (82%)ARPU $6 $8 –Capex (USD m) 200.7 295.0 (32%)*2011 figures include both Republic of Sudan and South SudanFinancials: P&L (USD m) 2012 2011 CAGRGross Revenues 864.2 1,091.1 (21%)Cost of Sales 204.1 218.4 (7%)Gross Margin 660.1 872.8 (24%)Opex 304.5 340.3 (11%)EBITDA 355.6 532.5 (33%)Net Profit/(Loss) 48.8 275.0 (82%)Capex Breakdown (USD m) 20122012 20112011Capex 200.7 295.0Network 190.6 266.9IT 4.9 12.4Others 5.2 15.7NETWORK PERFORMANCENetwork Quality KPIs2G Network availability 97.8%3G Network availability 97.1%2G Call setup success rate 96.7%3G Call setup success rate 97.3%2G Drop call rate 0.97%3G Drop call rate 0.45%2G and 3G drop call rates are less than 1% as per international standardsBroadband KPIsAverage daily data volume (TB) 20.5Service Availability KPIsContact center availability 100%Y Growth11)ce
  43. 43. 42OPERATIONS SNAPSHOTSBAHRAINAs of 31 December 2012, Zain Bahrain had a totalof 616,000 customers, representing an impressive21% rise from the 508,000 customers at the endof 2011. Zain Bahrains customer base at the endof 2012 accounted for some 1% of the Groupstotal customer base.Zain Bahrain successfully upgraded its networkto the latest version of nationwide WiMAX,which offers state-of-the-art technology to anincreasingly technologically-savvy customerbase. Capex decreased by 37% comparedto 2011. The operators network currentlycovers 100% of the population, with a totalof 334 sites.To stave-off increased competition, Zain Bahrain hasintroduced a range of tailored services that includefree laptops (for the broadband segment); theintroduction of new smart plan offers (iPhone 5,the Galaxy family and Nokia Lumia); 50% bonuson recharge for nine days (9th anniversaryoccasion); and the Samsung Smart TV (for thebroadband segment).Zain Bahrain began commercial operationsin the Kingdom in December 2003 as MTC-Vodafone and became the first operator tooffer 2G and 3G services from the outset.With its historic introduction of 3.5G, andWiMAX, Zain has tapped into a rich seamof telecommunication records, placing itand Bahrain on the global telecom map.With competition on the rise in this dynamicmobile sector, coupled with value-destroyingprice promotions, Zain Bahrain is workinghard to preserve its ARPU level, which reachedUSD 27 for the year-end 2012, down fromUSD 28 in the previous year.ZAIN ANNUAL REPORT I 2012366198418142PostpaidPrepaid20112012616508CUSTOMERS (000s)12
  44. 44. 43NETWORK PERFORMANCENetwork Quality KPIs 201220122G Network availability 99.9%3G Network availability 99.9%2G Call setup success rate 98.9%3G Call setup success rate 99.6%2G Drop call rate 0.55%3G Drop call rate 0.24%2G and 3G drop call rates are less than 1% as per international standardsBroadband KPIsAverage Daily Total Data Volume (TB) 39.7Service Availability KPIsContact center availability 99.7%
  45. 45. 44OPERATIONS SNAPSHOTSSOUTH SUDANDespite aggressive competition in South Sudanamong four major operators, Zain has managedto secure 38% market share, counting over 667,000active customers. The increase in customersin 2012 was aided by the fact that sites alongthe border that had been shut down by thegovernment for more than six months werere-activated, and this also contributed positivelyto the operators financial performance in 2012.Zain is able to operate in South Sudan as perthe Memorandum of Understanding (MOU)signed between the Republic of Sudan andSouth Sudan until South Sudan issues its ownlicense requirements.Political unrest between South Sudan andthe Republic of Sudan continues to affect thecountrys economy, and the unavailabilityof proper infrastructure has impacted theoperating cost of Zain South Sudan.To date, the operation in South Sudan issupported by 220 sites.In June 2011, the Republic of Sudan and SouthSudan successfully completed their separationprocess. Accordingly, Zain Group commencedseparating its operations into two entitiesby having different financial statements andorganizational structures.Prepaid customers dominate the market inSouth Sudan with Zains prepaid customersaccounting for 99% of its overall base atthe end of 2012.In the fourth quarter of 2012, Zain South Sudanlaunched a ring back tone service, which had apositive reaction in the local market.ZAIN ANNUAL REPORT I 2012664PostpaidPrepaid20126673CUSTOMERS (000s)36%22%4%MTNGemtellVivacell38%ZainMARKET SHARE12
  46. 46. 45NETWORK PERFORMANCENetwork Quality KPIs 201220122G Network availability 92.9%3G Network availability 97.6%2G Call setup success rate 95.8%3G Call setup success rate 99.7%2G Drop call rate 1.1%3G Drop call rate 0.3%Broadband KPIsAverage daily data volume (TB) 0.38Service Availability KPIsContact center availability 100%
  47. 47. 46OPERATIONS SNAPSHOTSKINGDOM OF SAUDI ARABIAThe operators customer base represents 18%of the Groups overall base. Prepaid customersaccounted for 94% of Zain KSAs overall base atthe end of 2012, while ARPU stood at USD 18.Zain KSA successfully completed its capitalrestructuring in July 2012, through reducing itscapital by 65% and subsequently increasing itthrough a USD 1.6 billion rights issue. As a resultof these transactions, Zain Group increased itsstake in the Saudi operator to 37%.For the year ending 31 December, 2012, ZainKSA managed to reduce its net losses by 9%YoY, with a 2% decrease in EBITDA. Theoperators EBITDA margin stood at 14%,up from 13% in 2011.Saudi Arabia continues to be a growth marketdriven by the large youth population, expatsand data products. The market is becomingincreasingly competitive, and Zain KSA willcontinue to focus on VAS, a superior network andoptimized financial and operational structures.In June 2012, Zain contracted Nokia SiemensNetworks (NSN) to be its 4G LTE mobilebroadband infrastructure and services vendorfor Jeddah. The operator catered to the risingdemand for mobile broadband and smartphonedata services by reframing its 1,800MHz GSMfrequency band to provide 4G services.To date, the operation in Saudi Arabia has 91%population coverage supported by 4,652 sites.Zain launched commercial operations in theKingdom of Saudi Arabia on August 26, 2008,a year after it was awarded its mobile license.The Group holds a 37% ownership stake inthe operation, while the remaining equity isdistributed between a Saudi consortium, whichowns 12%, and 51% that is floated on thestock exchange.Zain KSA counted 7.5 million customers at theend of 2012, a 1% decrease compared to theprevious year. The decrease in customer numbersis a result of a management policy to eliminateinactive customers in order to align its reportingwith industry standards and avoid distortionsresulting from transitory mobile phones users.ZAIN ANNUAL REPORT I 20126,2774677,0271,290PostpaidPrepaid201120127,4957,567CUSTOMERS (000s)45%40%Mobily STC15%ZainMARKET SHARE12467 1,2907,4957,5676,2777,0277,4957,567
  48. 48. 47Operational & Financial Performance 2012 2011 2010YOY Growth(12 vs 11)Customers (000s) 7,495 7,567 8,393 (1%)Revenues (USD m) 1,707.8 1,786.6 1,582.3 (4%)EBITDA (USD m) 234.3 239.8 88.4 (2%)EBITDA % 14% 13% 6% –Net Profit (USD m) (466.5) (513.4) (628.9) 9%ARPU $18 $18 $19 –Capex (USD m) 314.5 293.0 255.3 7%Capex Breakdown (USD m) 2012 2011Capex 314.5 293Network 288.6 257.4IT 14.9 21.7Others 11.0 13.9NETWORK PERFORMANCENetwork Quality KPIs2G Network availability 99.5%3G Network availability 99.6%LTE Network availability 99.7%2G Call setup success rate 98.7%3G Call setup success rate 99.2%LTE ERAB setup success rate 99.5%2G Drop call rate 0.45%3G Drop call rate 0.29%LTE Drop rate 0.70%2G and 3G drop call rates are less than 1% as per international standardsBroadband KPIsAverage Daily Total Data Volume (TB) 30.4Service Availability KPIsContact center availability 100%al Performance 2012 2011 2010YOY Growth(12 vs 11)7,495 7,567 8,393 (1%)
  49. 49. 48OPERATIONS SNAPSHOTSLEBANONAt the end of 2012, touch counted 1.9 millioncustomers – an increase of 6% YoY andaccounting for 5% of the Groups totalcustomer base.Important strategic objectives were undertakenand completed in 2012, including the develop-ment of national roaming and the rebrandingof the operation from "mtc touch" to "touch".The operations strategy is to consistentlyexceed customers" expectations by deliveringattractive products, capitalizing on mobilebroadband, as well as offering attractivebundles and mobile phones packages.To date, the operation in Lebanon has 97%geographical coverage, representing 99%population coverage with 739 sites. touch is inthe process of implementing LTE sites and willcontinue to do so during the course of 2013.In June 2004, Zain Group won a four-yearmanagement contract to operate one ofLebanons two GSM networks. This agreementhas been renewed several times since, mostrecently on 1 February 2012 for a 12-monthperiod ending 31 January, 2013. The operationis branded "touch", and Zain has developedthe Lebanese operation to its full potential byproviding unprecedented world-class services.ZAIN ANNUAL REPORT I 20121,6722621,577PostpaidPrepaid201120122811,9531,839CUSTOMERS (000s)12
  52. 52. 51The Zain brand idea revolves around "Live Your Dreams," which is a trueexpression of our brand personality in being larger than life, adventurous andpersonal. It represents a keenness to connect to peoples aspirations andgoals. The brand essence can be described as follows:We are our dreams as they separate us from the crowd. They are ours, andno one can take them away from us. They comfort us in hard times. Theyopen our mind to lifes possibilities, and they are the best expression of ourcreativity. They are the single thing most likely to drive us to succeed. In ourdreams, we are our own heroes…. Believe in your potential. Be who youwant to be.Besides its unique values and brand idea, the Zain logo with its distinctiveshape and colors has gained wide recognition and awareness.These company values and brand ideas are communicated through manytargeted campaigns and advertisements both at Zain Group and countryoperational levels. Here you will find a review of the major campaignsundertaken that were extensively promoted across the region during 2012.ZAIN GROUPMOTHERS DAYNo matter how old we get, we are children in the eyes of our mothers.Zain Group touched upon this view in the Mothers Day TV commercialwith Kuwaiti star Shooji. Telling her story through song, Shooji seemsto be recalling special moments with her mother where we see her asa child. It is only at the end that we realize these memories are actuallytaking place in the present and that her mother still views her as a littlegirl, regardless of her being an adult woman in her own right. After all,a mothers role is never done.51Mothers DayZain previously operatedunder six different iconicbrand names in severalcountries until the decisionwas taken to merge all theseidentities under a unique brandname and new philosophy.Thus the Zain brand was bornin 2007.Zain is simple, memorable andeasy to pronounce across theglobal marketplace.The brand name has theadded benefit of being richin positive connotationsin several languages. Forexample, in Arabic, Zainmeans "beautiful, good andwonderful," in Latin it means"dark horse" (of good breed;meaning cheval de race).Zains brand values are detailed below andmake the operator stand apart from othertelecommunications brands in the region:• Heart: Live your life with courage and resolve,engage your spirit, touch your emotions andconnect to your soul.• Radiance: Leading the way with imaginationand vision, bringing joy, color and richnessto your life.• Belonging: Bringing fellowship andcommunity to all, transcending culturaland geographical boundaries.
  53. 53. 5213THE BRANDLONELY SPORTSThis campaign was produced in tandem withthe Euro Cup 2012 and the frenzy that takesplace around the most popular sport on theplanet. The TV commercial takes a comical lookat what happens if you let the football fun passyou by.The campaign was promoted purely online,and included takeovers and banners on sportswebsites as well as Yahoo, ads on Facebook, aspecial "sports ball" personality test application,and resulted in considerable engagement acrossall our social media channels.• Dream On: Hold on to your dreams… This is what Zain called for in thisTV commercial, which told the story of a boy who drew his strength andmotivation from his passion for tap dancing. With Kuwaiti star Shoojishelp, he realizes that obstacles are nothing in the face of perseverance…Perseverance in the pursuit of dreams.• Eid: Zain told the story of Eid in a book that summarizes it in a powerfulsentence: "Eid is all about you." Shot entirely on Chroma, the TVcommercial required the illustrations of talented artists who transformedlandmarks and images into paintings. It took over 35 dancers and castmembers flown in from various countries and five weeks of animation forthe commercial to come to life. Almost every background element wasdrawn as a separate layer and used by the animators to integrate as popouts, which were all developed in post-production 3D.RAMADANZain audiences have become accustomed tothe companys creative energy during the HolyMonth of Ramadan, and Zain Groups activitiesin 2012 generated a great deal of excitement,enjoyment and family fun as the company bidto build further inroads into the communityduring this special time of year.The 2012 Ramadan campaign included threeTV commercials, a TV show, a theatrical playand online activities.TV COMMERCIALS• Fikra: Zains Fikra commercial described howhappiness is an ideal that can be achieved shouldone put their mind to it. In a survey conducted byTasaweek, the specialized online marketingmagazine, Zain Groups Fikra TV commercialranked first in competition with 23 other TVadvertisements produced by companies andinstitutions in Kuwait, by an overwhelmingmajority of 65% of the people surveyed.Lonely SportsDream OnEidFikraScreen Shot FromTVCScreen Shot FromTVCZAIN ANNUAL REPORT I 2012
  54. 54. 53TV SHOW: ZAIN BRINGS "YA HALA B SHOOJWIYANA" TO MBCZain was heavily featured on the MBC 1 TV channelduring the Holy Month of Ramadan through the"Ya Hala B Shooj Wiyana" family entertainmentshow, which was produced by Zain Group.Inspiring community spirit has always beenone of Zains core values and "Ya Hala B ShoojWiyana" offered a perfect opportunity forthe company to interact with customers andaudiences across the region. The TV showfeatured the popular star "Shooji," who is afamiliar face in Zains well-received advertisingand promotional campaigns."Ya Hala B Shooj Wiyana" aired for the 30 daysof Ramadan and followed the format of a light-hearted quiz show favored by many viewersduring this period. The show included 30songs presented as riddles, and viewers inthe Arab region were able to send answers tothe riddles via text message. Viewers were alsoable to interact with daily episodes of the showthrough Zains social networking platforms,including Instagram, Facebook and Twitter.THEATRICAL PLAY: ZAIN LAMPZain celebrated the Holy Eid al-Fitr with atheatrical play for children. Entitled "ZainsLamp", the piece was produced by Zain Group forthe second year in a row, following the phenomenalsuccess of the companys first theatrical endeavor,which was entitled "Zain to a Wonderful World",and was performed during Eid al-Fitr in 2011."Zains Lamp," which was performed in Kuwait,was a continuation of the successful experienceZain Group has enjoyed in the production oftheatrical pieces for the youth, which have provedextremely popular with children and their parents.Such productions represent another opportunityfor Zain to interact and build bridges within thecommunities in which it operates.The premise of the play was simple, that each of ushas a magical lamp within us, and we can chooseto ignite it and go on to achieve great things.The performance starred popular actors includingShooji, Fatima Al-Saffi, Abdullah Bahman, HamadAshkanani and Talal Bassim; the music wascomposed by Jad Rahbani; and the play alsofeatured many Lebanese Rahbanist theatricaltechniques that added further artistic dimensions.Zain LampZain LampYa Hala B Shooj Wiyana
  55. 55. 5413THE BRANDZAIN KUWAITeeZee CONNECTThis campaign was designed to communicate the revamped prepaidInternet plans. The main objectives were to communicate: the devicesplans, the launch of the data management portal and the differentInternet bundles.LTE REFRESH CAMPAIGNAfter the successful launch of 4G LTE, Zain Kuwait followed up with thiscampaign, which highlighted different usages to clearly communicate theimpressive speed of the LTE network.ZAIN JORDANMY LINE"My Line" is a postpaid offer that Zain Jordanlaunched allowing customers to personalize theirbenefits according to their behavior and usage.This campaign was aimed at communicatingthe promotion of the doubling of all "My Line"capacity and minutes from the initial productlaunch campaign.The revamped "My Line" campaign aimed tocapture the younger market and change theirattitude about postpaid plans.IM WITH ZAINZain Jordan sought to create a campaign thatassured customers that we appreciate theirloyalty, we share their beliefs and that ourpurposes are aligned with theirs. The campaignwas not about selling a product or a service. Itwas about reaching out to our customer baseto show our appreciation to them for making usthe market leader and reminding them of whythey are with us. Hence we had a number ofthird-party individuals declare, "Im with Zain."Im with ZainMy LineIm with ZainLTE RefresheeZee Connectd prepaide: the devicesd the differentin Kuwait followed up with thusages to clearly communicate theork.ZAIN ANNUAL REPORT I 2012
  56. 56. 55Enjoy the best Tablets with ZainI amtheangry birdsaddict**And undefeated championMohammed Janahi30 yearsDreams to be successfulat what he doesZAIN IRAQMUMEIZ PLUSZain Iraq heavily promoted "Mumeiz Plus," a postpaid product targetingindividuals as well as small and medium enterprises with competitivetariffs plans for calls and SMS. "Mumeiz Plus" also offered customers theconvenience of settling their bills through recharge cards.WEEK END OFFERZain Iraq also introduced an exclusive offer to all its prepaid customerswhere they were able to enjoy discounts on an hour of calls every Friday.To benefit from this offer, customers had to send "5" by SMS to 2020.ZAIN BAHRAINI AM CAMPAIGNBefore launching this campaign, Zain Bahrain introduced an onlineteaser promotion asking Facebook followers several questions. Thiscampaign lasted for two weeks after which 11 candidates were shortlistedas Brand Ambassadors. The ambassadors generated a lot of interest andmade our followers interact and vote for them. They also appeared atseveral activations, with the whole campaign reinforcing that Zain Bahrainis a social brand that interacts with its customers.IPHONE 5 CAMPAIGNThe aim of the campaign was to communicate that Zain Bahrain had theiPhone 5 ready for sale, offering the best deals and driving up demandfor the device. We also merged the iPhone 5 campaign with the "I am" brandcampaign, which centered on expressing oneself through ones device. Wetook features of the iPhone 5 and developed them into identity statementssuch as I am lighter, I am brighter, I am faster and I am thinner.I Phone 530 yearsDreams to be successfulat what he doesI am CampaignWeek End Offer Mumeiz Plused "Mumeiz Plus," a postpaid product targetingall and medium enterprises with competitiveS S l l ff d hcampaign,took features of the iPhone 5 andsuch as I am lighter, I am brighter, I am faster and I am
  57. 57. 5613THE BRANDZAIN SUDANTHANK YOU2012 marked the 15-year anniversary of Zain Sudan, and to mark thismilestone the operator launched a huge "Thank You" campaign inappreciation of its 13 million customers who helped maintain Zainsleading position in the market.LIFE IS A JOURNEY OF CONNECTIONSThis campaign portrayed Zain Sudans close connections to the Sudanesesociety and showed people from all walks of life connecting throughdifferent ways in a very touching TV commercial and print campaign.ZAIN SAUDI ARABIASPEED4GAfter the launch of the 4G (LTE) service in 2011, Zain KSA introduced itsnew broadband platform under the name of "Speed4G" in early 2012.This platform included both mobile connectivity with the latest devicesthat support 4G, together with home connections through modemsand USB dongles, raising Internet experience in Saudi Arabia to newheights. The campaign focused on the heightened experience 4G willgive the customer.HALA QUSAI IIFor the launch of the new youth platform in 2012, Zain KSA worked withthe ever-inspirational Saudi rapper Qusai on a campaign directly targetingthe youth. The platform consists of the latest prepaid packages, whichoffer customers the best value for money, where they can enjoy freecalls, SMS and Internet browsing on the Zain network around the clock.Thank YouSpeed 4GHala Qusai II56JourneyZAIN ANNUAL REPORT I 2012
  60. 60. 3G COVERAGE (POP%)Kuwait 95% (3G), 95% (LTE)Jordan 98%Bahrain 100%Sudan 45.15%South Sudan 11.07%Iraq NASaudi Arabia 80% (3G), 36.5% (LTE)LTE: DEPLOYMENT IN KUWAIT AND PROGRESSIN SAUDI ARABIAAs part of Zains ongoing innovation journey, in 2012 the companymanaged to launch LTE in two of its key operations, Kuwait and KSA.LTE or 4G is the latest innovation in mobile wireless data services. It isa technology that opens endless possibilities for service providers andcustomers to benefit from high-speed services reaching theoreticalpeaks of up to 100 Mbps.Zain KSA was aggressive in deploying its 4G LTE network using FDDtechnology to capture market share given the existing strong competitionand rollout challenges. In a very short period of time Zain KSA managedto deploy approximately 650 LTE Evolved Node Bs (eNB), leading tothe offer of the service in all major cities including Riyadh, Jeddah andDammam. Zain KSA also deployed its 4G LTE service in remote areassuch as Sharorah, Fifa and Bisha as part of its strategy to reach all cornersof the Kingdom. This aggressive deployment plan was instrumental inZain KSA achieving 124 TB of data download for the month of November2012. The operator now counts 50,000 LTE customers.In 2013 Zain KSA has an ambitious plan to deploy a further 750 4G LTE eNBin order to expand its LTE coverage and reach new customers in remoteareas that are unaccustomed to high speed mobile Internet service such asHaql, Safwa, Qrayyat and Dawadmy.59With respect to technology,Zain focuses on optimizingthe cost of service deliverythrough different enablersand initiatives.This includesproviding the right group-opcogovernance and maximizingvalue from partnershipsthrough optimized framework(FWAs) and service layeragreements (SLAs). Zain alsolooks to captilize on betterresource utilization of differenttechnology layers such asaccess and backhaul.To achieve the above Zain has defined keyareas of focus such as harmonized deliveryinfrastructure by introducing masterplans andblueprints for different network/IT functions.These masterplans represent Zains standardguidelines, optimal design and best practicesthat are fully compliant with 3GPP and eTOMstandards, while also defining the technologyroadmap for each of its operations goingforward. The guidelines cover all areas oftechnology from access, core and backhaul,to OSS and BSS areas of the network. Thisapproach enables a more informed decisionmaking process for new investment, ensuring fullalignment with business plans and operations.Another key area of focus is partnerharmonization through defining innovativeand flexible FWAs and SLAs thereby enablingbetter CAPEX and OPEX optimization. ZainGroup also looks to align its technology roadmapwith those of its partners through an annualtechnology conference. At this annual event,Zain details its strategic direction from atechnology perspective; opcos share theirexperiences and best practices and technologypartners present their plans as they apply toZains strategy. Zain KSA
  61. 61. 6014GROUP TECHNOLOGYZAIN ANNUAL REPORT I 2012Zain Kuwait is proud to be characterized as the distinctive operatorto achieve the fastest nationwide 4G coverage in the region using4G LTE FDD technology. This impressive achievement came aboutthrough Zain Kuwaits continuous network upgrades that were aimed atimproving the customer experience.In early 2012, Zain Kuwait decided to swap and upgrade its 2G networkand simultaneously started to deploy a blanket of LTE sites. This wasdone to ensure that LTE network coverage was extended across the wholeof Kuwait. Zain Kuwait took a bold move to deploy its LTE network at1800 MHz despite being uncertain towards LTE regulatory guidelines andspectrum allocation.By the end of 2012, Zain Kuwait had deployed 1,464 eNB in Kuwait making itthe fastest nationwide LTE network deployment in the region. There is a planto add 90 more eNB in 2013 and this rapid deployment has positioned ZainKuwait as a market leader, with a six-month head start on its competitors.The network is carrying approximately 4 TB daily of downlink data on itsLTE network.ZAIN TECHNOLOGY CONFERENCEZain Group held its second annual Zain Technology Conference in Dubaifrom 5 to 7 November 2012.The conference brought Zain Group and its operating companies togetherwith the Groups 39-plus leading technology providers and partners for threedays of interactive discussions, presentations, technical solution demos andinformation exchange, in a bid to align technological outlooks. Zain KuwaitZain Technology Conference Group Photo
  62. 62. 61The conference presented a fantastic opportunity for Zain and its partners to brainstorm, look ahead and focus on what needsto be done in order to achieve even greater results in the future. Mobile broadband and the huge rise in broadband trafficover telecom networks was a central theme of discussion at the conference.Other pressing topics included the role of OTT (over the top) players in the telecom ecosystem, the need to further optimizeradio and core networks for the dramatic increase in data traffic that is forecast, the monetization of data applications, as wellas ways in which to attract the customers and improve the customer experience further.Zain has established well-defined partnerships with leading telecom vendors; the aim of which is for them to support Zain in theimplementation of its compelling strategic initiatives. At the center of all of Zains efforts is continually improving its customerservice and exceeding the expectations of its customer base at every contact point.The Zain Technology Conference 2012 also hosted an exhibition for Zain partners in which they were able to showcase theirlatest services and solutions. Among the most prominent partners present at the exhibition were Ericsson, Huawei and NokiaSiemens Networks.Year Bahrain* Iraq Jordan KuwaitSaudiArabiaSudanSouthSudanDaily TotalData Volume (TB)2010 7.5 0.32 0.27 24.3 3.05 6.1 02011 26.1 0.8 17.9 36.2 9.28 10.1 02012 55 1 32.4 60 30.39 20.5 0.38*Bahrain: Data volume includes Fixed Wireless i.e. WiMaxCONVERGENCE IN ZAINTelecommunication convergence is a broad term used to describe emerging technology and network architecture used tomigrate communication services into a single integrated network. Previously separate technologies such as voice, video, dataand Internet are now sharing a common pool of resources and seamlessly interacting with each other.Convergent solutions covering charging, billing and CRM enable common management of the entire user base and servicesprovided by operators.The focus of convergent solutions is not just on customer service but also on business process improvements and the strategicuse of technology that supports business model transformation. Every interaction must be managed across each part of thebusiness where the customer evaluates, orders, uses and pays for the product/service. Convergent solutions provide the tools,methodology and processes to ensure a dynamic, personalized customer experience where all interaction channels workseamlessly together to seize every revenue opportunity while delivering consistent service anywhere, anytime.Zain is at the forefront of this new revolution and has always been quick to adopt and embrace new enhanced technologyand communication trends. To help support our new multi-connected, multimedia world, Zain has embarked on a full-scaleoverhaul of its charging, billing and CRM systems across all its operations, incorporating a state-of–the-art charging, billingand CRM platform that offers innovative, attractive and customized services to all profiles of customers. For example, Zain is nowin the position to be able to launch customer-segment-based, targeted campaigns or promotions in an acceptable time-frame,which deliver an improved customer experience, utilizing existing resources. Such an implementation enhances revenue,and all these activities can be executed within the unified convergent solution platform by actual business users, with minimumsupport from technical teams in operations.Today convergent solutions partially exist within Zain opcos, with the aim of achieving full convergence across all operations in duecourse. Jordan and Sudan, for example, are pioneering Zain markets in which full convergent charging, billing and CRM solutionsare ready and should be available by early 2013. All other Zain operations are in the process of finalizing their rollout plans.
  63. 63. 62GROUP TECHNOLOGYZAIN ANNUAL REPORT I 201214ENERGY EFFICIENCY AND ENVIRONMENTAL IMPACT REDUCTIONAt Zain we understand that our move toward energy efficiency is directly correlated to the reduction of our networks" impacton the environment. The below diagram represents Zains efforts in 2012 to achieve energy efficiency and to become moreenvironmentally friendly.There will be more detailed information including CO2 emissions and savings values for all our operations in the Zain 2012sustainability report.
  64. 64. 63ZAIN IRAQ OUTSOURCING PERFORMANCEIn less than a year, Zain Iraq has achieved an outstanding improvement in its operational efficiency following the implementionof its network/IT outsource model. Zain Iraq, along with its partners (the outsource manager and the other operating vendors),managed successfully the paradigm shift of moving from operational management to vendor management. The achievementswere clearly reflected in the OPEX savings and control, network performance KPIs and aggressive rollout of 2012 planned projects.Despite the challenges in Iraq, in less than eight months the operator successfully managed to modernize 3,050 RAN sitesin the network including its supplying power systems and the transmission network. Zain Iraq was also able to undertake thismodernization program while maintaining the quality of service throughout.In most cases the deployed modernization program improved the network availability, which exceeded 99%, and improvedthe call success rate to more than 97%. In addition, as part of the outsource process, Zain Iraq developed and advanced thequalifications of its Iraqi team who worked within the operation as well as those who worked as part of the outsource manager.This was achieved through well-defined training programs by which staff gained additional experience by working along withthe outsource manager infield.AcronymsFWA Frame Work AgreementSLA Service Level AgreementLTE Long Term EvolutionFDD Frequency Division DuplexTB TerabyteeNB Evolved Node BCRM Customer Relationship Management3GPP 3rd Generation Partnership ProjecteTOM enhanced Telecom Operations MapRAN Radio Access NetworkBSS Business Support SystemsOSS Operational Support SystemsRCING PERFORMANCEraq has achieved an outstanding improvement in its operational efficiency following the implementionce model. Zain Iraq, along with its partners (the outsource manager and the other operating vendors),e paradigm shift of moving from operational management to vendor management. The achievements
  65. 65. 6415PRODUCTS AND SERVICESAn operator’s effectiveness can often be judgedby the range of products and services it offers,and the relationship it is able to establish with itscustomers. From its very inception, Zain Grouphas placed technology leadership and productand service innovation at the top of its operationalpriority list, and each year reinforces this positionwith product developments and launches.MOBILE DATA AND MOBILEBROADBANDZain has come a long way in the evolutionof digital services, specifically in the growthof mobile data and the increased push ofsmartphones and non-voice plans. 2012witnessed higher than average growth in thearea of digital services and mobile broadband,and the expectation is that growth shallcontinue for years to come.As the leader and innovator in the market,Zain Kuwait was the first operator to rollout 4G LTE, the latest mobile Internettechnology nationwide.The 4G LTE service in Kuwait was supportedby a bold campaign, which provided a clearmessage about service delivery speed in acolorful and humorous manner. The campaignpromised the fastest mobile access speeds inthe market, and invited customers to try it forthemselves at the numerous Zain branches andpromotional booths.4G services will also be provided to Kuwait’sprepaid customers for the first time in the nearfuture, making "eeZee" easier than ever. Zaincontinues to optimize and evolve its Internetservices to ensure that it remains an innovatorwell into the future.Zain Bahrain launched several bundledpropositions in home broadband, includingSmart TV, laptops, unlimited calls, andInternet access. The mobile broadband andhome broadband family bundle, offers homebroadband customers multiple discountedtablets and mobile data connections. With thisbundle, home broadband customers receive upto four mobile data SIM cards and subsidizeddevices (tablets, dongles, Mi-Fi) for their familyat an effective bundled discount of up to 20%.64Zain Bahrain Family Offer Zain Kuwait 4G LTEZAIN ANNUAL REPORT I 2012
  66. 66. 65DEVICESZain continues to offer the latest smartphones and tablets for customersacross all of its operations. These include devices from Apple, Samsung,Nokia, Blackberry, HTC, and Huawei.Through valuable and trusted OEM relationships, Zain Kuwait continues tobe the best place to buy and experience the latest smartphones. Recentdevices launched in Kuwait include, but are not limited to the following:• Sony Xperia Ion• Samsung Galaxy Note 2 / SIII LTE• Nokia Lumia 920• BlackBerry Z10• Apple iPhone 5Zain Bahrain introduced the ‘Better than Free’ campaign, making the verylatest smartphones, including the Apple iPhone 5, the Samsung GalaxyS III, and the Huawei Media Pad 10FHB, accessible at affordable prices.‘Better than Free’ was launched with the aim of incentivizing customersto longer-term contracts by giving bill discounts to customers opting fortwo-year contracts, thus making high-end smartphones more appealing.The campaign also manages to reduce the costs associated to the multi-screen requirements of certain customers.WI-FI ROAMING AND ENTERPRISE SOLUTIONSInternet roaming has become crucial, with smartphones essentiallyfunctioning as handheld computers.Zain Kuwait launched the Zain Pass service and app during 2012, and fora low fixed monthly fee, Zain Pass gives the customer unlimited Internetaccess in over one million locations worldwide. Post-paid customers usingiOS and Android devices can stay connected to their loved ones whileroaming, accessing Wi-Fi hotspots all over the world, making Internetroaming charges transparent and predictable.Zain’s enterprise solutions focus on corporate products and solutionsacross all operations through the provision of cloud computing andmanaged telecommunication services.Zain Bahrain introduced a complete portfolio of enterprise products andsolutions, including PABX, DIAs, point-to-point, leased lines, and hostingsolutions during the year.In 2012, Zain Jordan and Airport International Group (AIG) signed anagreement by which Zain is to assume the management of the informationand communications network in the new terminal at Queen Alia InternationalAirport. Zain Jordan is to provide advanced infrastructure to accommodatethe large number of travelers in the airport terminal. The arrangementfalls under the smart cities/buildings portfolio, where Zain Jordan hasbeen appointed as the exclusive telecommunications infrastructure andfacilities operator.Through this arrangement, Zain Jordan will commercialize the entireinformation and telecommunications network at the new airport, and will laterbecome the incumbent operator responsible for the operational (day-to-day)issues spanning support, maintenance, and expansion of the infrastructure.Zain Bahrain "Better Than Free" CampaignZain Kuwait Galaxy Note II offerZain Jordan and AIG Sign Agreement
  67. 67. 66PARTNER RELATIONSZain is committed to providing customers with market-leading andinnovative products and services.In this regard, Zain Group has entered into strategic arrangements withseveral key partners in order to cooperate in the marketing of regionalproducts and services.This strategy enables Zain to implement value-added products andprovide customers with high-quality communications services.ZAIN AND VODAFONEIn September 2012, Zain Group entered into a Partner Market agreementwith Vodafone Group that will provide Zain customers access to Vodafoneservices while significantly expanding Vodafone’s Partner Market presencein the Middle East.Under the non-equity partnership agreement, Vodafone will work withZain companies in Saudi Arabia, Bahrain, Kuwait, Jordan and Iraq toprovide customers with high quality communications services. Themove will enhance both Zain and Vodafone’s ability to meet growingdemand among multinational businesses for sophisticated voice and datacommunications solutions as well as advanced roaming services within theMiddle East. This will complement Vodafone’s own regional operations inEgypt and Qatar and increase the number of countries in which Vodafonehas Partner Market agreements to more than 50.Zain will have access to Vodafone’s devices and services in its homemarkets and become the preferred partner of Vodafone in respect of theagreed areas of cooperation. Vodafone and Zain will work together toprovide customers with enhanced network coverage, and harmonizedroaming rates across multiple countries with greater cost efficiencies.Zain will also be able to use the Vodafone brand.Vodafone’s multinational customers served by Vodafone Global Enterprisewill benefit by being able to add Zain countries to their existing contractsfor international managed services, while continuing to be serviced via asingle point of contact. Zain will similarly benefit from Vodafone’s footprint.In addition, Vodafone plans to support multinational corporations byproviding communications expenditure tracking and procurementservices while introducing innovative mobile price plans across the twoorganizations’ shared areas of operations.15PRODUCTS AND SERVICESZAIN AND IPASSIn March 2012, Zain Group signed anagreement with iPass Inc., a leading providerof mobility services for enterprises and telecomservice providers, enabling Zain to provideits mobile customers with global Wi-Fi dataroaming services.The Zain Group offering will leverage the iPassOpen Mobile Exchange (iPass OMX) to providecustomers with a global Wi-Fi roaming offeringand access to the iPass Mobile Network, theworld’s largest commercial Wi-Fi network atlocal rates.The iPass Open Mobile Exchange enablesmobile network operators to maximize theimpact of their roaming offer with minimumeffort. The service provides the largest Wi-Firoaming footprint in the world: customerscan seamlessly connect to over one millionpremium Wi-Fi hotspots worldwide forsmartphone and tablet connectivity in 117countries, in key locations such as airports,hotels, convention centers, coffee shops andother locations.Following this agreement the Zain Pass servicewas launched in Kuwait in September 2012offering mobile customers that have Androidor iOS devices an attractive, reduced-cost, dataroaming solution when travelling abroad. Byleveraging lower-cost Wi-Fi networks, Zain isable to extend data roaming services beyond3G and 4G networks to provide affordabledata connectivity along with bolstering indoorcoverage capabilities.The launch of the Zain Pass Wi-Fi data roamingservice was a first for Kuwait and the MiddleEast. Zain Kuwait was the first Zain Groupoperation to launch Zain Pass in the region,with other operational companies set to followsuit in due course.ZAIN ANNUAL REPORT I 2012
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  70. 70. 69In 2012, Zain Grouplaunched its first consolidatedSustainability Report, entitled"Growth for a WonderfulWorld", highlighting thevarious socio-economic andenvironmental impacts acrossour group of companies.The report represents a majorstep in the companys evolutionand a significant milestone inour sustainability journey.Like everything we do, wecontinue to be passionateabout our communities,our customers, and ourenvironment. Throughoutall our operations, greateffort and dedication is givento capacity building, as it isone of the most significantchallenges that we face inour region.Programs such as the Mobile Application Competition in Saudi Arabia,the Zain Excellence initiative for Iraq, and the PIN2 (Promote, Inspire andInnovate) business plan competition for selected high school studentsin partnership with PricewaterhouseCoopers (PwC) in Kuwait, and theImagine Cup in Iraq, are perfect examples of the companys commitmenttowards facilitating young people with life-transforming skills.Realizing that it is fundamental to provide our communities with the necessarytools for development, we embarked on various initiatives such as the YouthPeacemakers Network (YPN) project led by the Peace Earth Foundation inpartnership with UNESCO, and Ericsson in South Sudan.The initiative will help members of the network to become leadersin peacemaking, conflict resolution and reconciliation. They will alsoreceive basic ICT and social media training.In line with the 2nd goal of the Millennium Development Goals, which aims"to ensure that by 2015, children everywhere will be able to complete a fullcourse of primary education", all of Zains operating companies continueto focus on educational initiatives ranging from back-to-school programs inBahrain, e-learning projects in Kuwait, scholarship funds in Jordan, to DailyMeals programs for children in Sudan.In 2013 we will continue to forge ahead with meaningful communityoutreach programs; thus continuing with our commitment to socio-economic development.69GROWTH FORA WONDERFULWORLDSUSTAINABILITY REPORT 2011Sustainability Report: Growth for a Wonderful World
  71. 71. 7016CORPORATE SOCIAL RESPONSIBILITYBAHRAINZain Bahrain has remained a committed corporatecitizen, displaying innovation and vision inplanning and executing its CSR programs.While the core focus of empowering youththrough sport and education, and working withthe community on environmental and specialprojects remain the same, every aspect of ZainBahrains CSR program has been re-engineeredto illuminate the present and the future.One of Zain Bahrains longest-running CSRactivities, the Back-To-School initiative, ensuresthat deserving school children throughout Bahrainreceive sturdy schoolbags and stationery to helpthem tackle the challenges of a new academicyear with confidence.To date, over 270,000 children have received Zainschool supplies. The project is so effective thatSheikh Nasser bin Hamad Al Khalifa, son of HisMajesty King Hamad, who heads the Royal Charityorganization, has extended his patronage to it.Zain Bahrain has also assumed the leadership rolewith respect to its Future University Network (FUN)Program, which is aimed at offering young peoplehands-on work experience in the company. TheFUN project envisages preparing young Bahrainiuniversity students for the job market of the future,either with Zain or externally. The selection of thefirst intake of FUN team members has alreadytaken place, with participants inducted into theZain Bahrain team and mentored by experiencedstaff; thus allowing the students to "live the workexperience" in a real corporate environment.The Zain e-learning Center in Bahrain is anongoing commitment. The highly advancedtechnological facility was originally developedin coordination with the University of Bahrainin 2004 at a cost of more than BD 310,000(USD 822,000) donated by Zain Bahrain. Thecenter caters to nearly 17,000 students andfaculty on an annual basis. Zain Bahraincontinues to maintain the center, payingBD 26,000 (USD 66,000) on an annual basisto maintain facilities.Since 2008, Zain Bahrain has been a keensupporter of basketball in Bahrain, drivingthe sport forward through focused sponsorshipand innovative strategies to develop the gameamong young Bahrainis.The company has spent over BD 80,000(USD 212,000) in establishing the properE-waste initiative extends to schools and universitiesGo Green, nurturing environmental mindset in schoolsTo support young talents in Basketball E-learning centerZAIN ANNUAL REPORT I 2012
  72. 72. 71infrastructure for the Bahrain BasketballAssociations training efforts, creating newchampions with an inspiring "best player"award each week of the tournament andwinning new fans with interactive ticket salesvia mobile phones.Zain Bahrain has expanded the scope of itsenvironmental CSR initiatives to promote greaterawareness amongst school students and youth.The company launched e-waste in 2011 andextended it to schools and universities in 2012.Another eco-friendly move was the offeringof e-invoice services where invoices are sent tocustomers in electronic format. Zains e-invoiceproject promises to contribute towards savingenergy resources and is part of a wider set ofgreen initiatives such as Zains electronic billingservice, which helps save energy and customertime. Zain also offers paper top-up vouchers thatreduce the production and circulation of plasticcards, as well as the "Go Green" initiative, whichfocuses on the need to reduce, re-use,and recycle in school zones.IRAQZain Iraq has been involved in a wide scaleprogram of engagement to cover educationaland health programs. This aligns with ZainGroups strategic vision to undertake corporateactivities that focus on education and health.The Imagine Cup is a cooperation projectbetween Zain Iraq and Microsoft, and was heldin the Kurdistan region of Iraq in 2012. TheImagine Cup is the worlds premier studenttechnology competition that brings youngtechnologists and students together to usetheir imagination and passion to create atechnology solution that helps solve thetoughest problems through the power of IT.On the health front, a far-reaching medicalcooperation between Zain Iraq, South Koreandoctors, and the Higher Education Ministryresulted in a successful visit of doctors to thecountry, ending a 20-year boycott. The Koreandelegation represented Wong Wang MedicalUniversity and Zain supported the Koreandelegation as it gave lectures in neurology andbrain surgery to medical students. Zain Iraq alsofinanced and facilitated a bilateral agreementto send some difficult medical cases to betreated in Korea.South Korean doctors visit IraqImagine Cup, imagination to create technology solutions
  73. 73. 7216CORPORATE SOCIAL RESPONSIBILITYJORDANAt Zain Jordan, we take our expertise in building networks, partnerships andsuccessful businesses seriously and use it to positively impact society acrossJordan. Corporate Social Responsibility is built on the foundation of havingan active participation and contribution to the communities.Our sustainable CSR Programs aim at integrating Zain values and localcommunity needs and have generally been a pragmatic response toconsumer and civil society pressures. Zain Jordan pioneered in furtherconsolidating the concept of CSR.CSR in Zain Jordan goes beyond philanthropy as it addresses how thecompany manages the economic, social and environmental impacts aswell as our relationships in all key spheres of influence.Zain Jordans CSR focus areas include: education, health, sports, philanthropyand the environment.In 2012, as a sudden rise in fuel prices, Zain Jordan launched a philanthropicinitiative to provide underprivileged families with fuel coupons, aimed atsupporting them during the cold winter season.Zain Mobile clinic has treated 120,000 children since its inception in2002. In contrast, aiming at promoting innovation and supportingyouth, the "Shabab Zain" initiative resulted in the development of sixprojects in Zarqaa and Balqaa governorates. Furthermore, Zain Jordanestablished its second Mobile Maintenance Training Center in Al Tafeilahgovernorate, aiming at qualifying youth and creating more job opportunitiesfor them.The company is also involved with Jordans Childrens Museum, providinga bus in order to bring children from across the Kingdom to differentlearning locations.Zain Jordan also supported the blind athlete Suhail Al Nashash who hasachieved great things at the local, regional and international levels andthe company has further employed Al Nashash as a member of its staff.andsMobile Maintenance Training CenterZain Mobile Clinic: treated 120,000 children since 2002Zain Jordan supports the champ Suhail Al NashashZAIN ANNUAL REPORT I 2012