We Turn No into Now - d364xagvl9owmk.cloudfront.net...dynamic environment, according to Scott Gegenheimer. The company’s adaptability to rapid and often drastic changes in socio-political

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We Turn No into Now

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Contents

2 New frontiers Asa’ad Al Banwan says Zain’s Board of Directors understands that it is likely to be the telcos that innovate and transform in line with the market’s evolution towards digital services that will stand a better chance of success into the future

4 Eyes on the horizonZain Group continues to operate in the midst of a highly complex and dynamic environment, according to Scott Gegenheimer. The company’s adaptability to rapid and often drastic changes in socio-political and economic conditions is based on its ability to solidify fundamentals and build future revenue streams

8 Digital transformationThe Zain Digital Frontier and Innovation (ZDFI) business unit is charged with expanding the reach of the Group into the digital space, and developing new, innovative businesses and income streams. Emre Gurkan highlights the progress the unit has achieved to date and the opportunities he believes still lie ahead

12 Making things happenZain’s strategy to create a digital lifestyle provider is premised on six transformational initiatives: Customer Experience, Operational Effectiveness, Value Management, B2B, Digital Frontier and Innovation, and Talent Development

14 A year of firstsIn December 2015 Zain Jordan marked the first anniversary of the establishment of the Zain Innovation Campus (ZINC) in Amman, which has since developed to become the central hub for all the operator’s modernisation efforts. It also attracts aspiring entrepreneurs who have gone on to commercialise several viable businesses from their ideas

16 Coordinated innovation The Zain Group is a sum of its various parts, and while there is significant Group support offered to the individual operating entities, there is also a keen understanding that the individual market dynamics the respective operations face can be quite varied

20 In search of greater gloryZain recently announced its participation, for the second consecutive year, in the sixth edition of the EFG Sailing Arabia-The Tour (SATT) 2016 competition. This event is the Gulf region’s leading offshore sailing race, and is organised by Oman SailPublished by

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Sailing Ahead in A Better Connected World

New frontiers

Zain prides itself on a track record of in-novation and a forward-looking mentality to market developments, which it believes is central to allowing it to remain relevant and effective in providing a superior customer experience. As one of the leading mobile telecom innovators in the Middle East and North Africa, the Board is working closely with management to seek opportunities to deliver new services in an ever more efficient and progressive manner, giving rise to such initiatives as our Zain Digital Frontier and Innovation (ZDFI) business unit.

The business unit is charged with identifying new business areas, entering value-adding strategic partnerships, and identifying and closing accretive acquisition opportunities and synergistic corporate venturing invest-ments. Already the unit has a track-record of success, and the Board will continue supporting ZDFI in adding to its portfolio of

The Board of Directors understands that it is likely to be the telcos that innovate and transform in line with the market’s evolution towards digital services that will stand a better chance of success into the future

investments and services to the benefit of Zain’s wider business activities.

Going forward Zain Group and its operating entities need to remain vigilant and agile to market opportunities, and an active knowledge transfer culture needs to be fostered, which we hope will occur between individuals from across the Group seeking information on digital developments occurring elsewhere within the company.

The Zain Board and management are also well aware that the telco industry is changing rapidly, and as one of the leading service providers in the region, we believe it is imperative for us to embrace these changes and be forward-looking in our approach to technology. These are exciting times for all stakeholders in the ICT value chain, traditional as well as new, and opportunities abound for the creation of significant value for all participants should they apply themselves.

Yours sincerely,

Asa’ad Al Banwan Zain Group Chairman

Sailing Ahead in A Better Connected World

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Eyes on the horizon

Zain Group continues to operate in the midst of a highly complex and dynamic environment. The company’s adaptability to rapid and often drastic changes in socio-political and economic conditions is based on its ability to solidify fundamentals and build future revenue streams

During the course of 2015 the Middle East and North Africa region witnessed the destabilisation and mass migration of huge populations of people to other geographies. The global economy also came under sustained pressure as economic output in key markets such as China slowed, and the price for commodities, primarily oil-based ones, decreased dramatically.

Local currencies in most countries across emerging markets weakened in comparison to the US dollar, making imports more expensive, and driving up inflation forecasts. Despite these macro-economic developments, Zain Group maintained a steady course in 2015, relying on its strong brand, human talent, impressive customer experience, and cutting edge technology innovations.

For the full-year 2015, Zain Group generated consolidated revenues of KD 1.14 billion (USD 3.78 billion), while consolidated EBITDA for the period reached KD 499 million (USD 1.66 billion), relatively stable year-on-year, and reflecting a healthy EBITDA margin of 44%. Consolidated net income reached KD 154 million (USD 513 million), with Bahrain, Jordan, Saudi Arabia and Sudan operations all reflecting robust growth for the year.

Zain served 45.6 million customers at the end of the period, reflecting a 3% increase year-on-year, with substantial investments in 3G and 4G LTE network expansion and upgrades continuing to pay off as Group data revenues (excluding SMS and VAS) surged by an impressive 15% during 2015, representing 20% of the Group’s consolidated revenues at the end of the year.

The Group outlined its focused five-year strategy to create a strong and sustainable platform for growth against a backdrop of higher mobile penetration, increasing competition, unique exter-

Scott Gegenheimer says Zain’s five-year strategy to build a sustainable digital communications company serving consumers and enterprises with a rich lifestyle experience is progressing well

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“Zain Group is gaining ground in its efforts to solidify fundamentals and build future revenue streams”

nalities, challenging operational performance, and accelerating adoption of over-the-top (OTT) solutions. Our five-year strategy has the vision to build a sustainable digital communications company serving consumers and enterprises with a rich lifestyle experience.”

During the course of the year Zain made significant progress in achieving its vision, having identified internally that it cannot do everything it wants to do in the digital space alone, so it is a big proponent of value-creating partnerships.

The strategic collaboration with NeXgen Group, a leading smart city advisory and consulting services provider based in the UAE, is an example of such. This cooperation enables Zain to advise gov-ernments and mega real estate developers facilitating the deploy-ment of smart city solutions across the region. The two companies have recognised the value the other brings in this respect and plans are afoot to solidify the relationship even further.

We also invested in three venture capital funds – MEVP, Wamda and Earlybird- that are focused on early-stage and growth-stage digital opportunities in Central and Eastern Europe, Turkey, the Middle East, and Africa.

Earlier in 2015, we announced the expansion of our existing Part-ner Market Agreement with Vodafone, to deliver M2M services to enterprise and government sectors across the region, with our operations in Kuwait, Bahrain, Jordan and Saudi Arabia at the forefront of this initiative.

More recently, Zain has tied up with leading technology and content companies including UBER and global games developer, Zeptolab, in order to bring to market a number of popular appli-cations, in many cases under some pretty unique and pioneering circumstances. Our efforts appear to be resonating as our agree-ment with UBER was recognised by global research company Ovum, as its most innovative service for November 2015, from a selection of 82 innovative services launched by network providers around the world.

We are pleased with the progress our data monetisation initiatives are making and are drawing much confidence from the growth in the uptake of data services. The Group will continue to foster and develop this key area of the business.

Additionally, our efficiency and optimisation initiatives are produc-

ing tangible positive results reflected in our improving EBITDA margin of 45% for the fourth quarter and 44% for the full-year.

In the year ahead, Zain Group is set to continue along its path of identifying oppor-tunities in the digital space, and partnering with or investing in strong and innovative technology players.

Overall Zain is focusing on future verticals, be that e-Commerce, education, next generation TV services or digital advertising, and our goal is to utilise our unique regional presence and common brand to push development of the digital economy and our position in the business environment of the future.

We will also focus on aligning our network investments to ensure we continue to lead our markets and enable future revenue streams.

We believe the richness of content being delivered over mobile devices will continue to increase and drive even more applica-tions to come to market, with commensu-rate investment in infrastructure required to support such.

Going forward Zain Group and its operating entities are looking to remain vigilant and agile to market opportunities. We are all well aware that the telco industry is chang-ing rapidly, and as one of the leading ser-vice providers in the region, we believe it is imperative for us to embrace these changes and be forward-looking in our approach to industry changes. These are exciting times for all stakeholders in the ICT value chain, traditional as well as new, and opportunities abound for the creation of significant value for all participants should they be agile enough to grasp them.

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A trusted partnerAs part of Zain Saudi Arabia’s extensive network transformation initiative announced in June 2014 and dubbed RELOAD, Nokia was entrusted to modernise Zain’s network around the culturally and religiously significant centre of Mecca. Given the swelling number of visitors to the city during the annual Hajj pilgrimage, network performance requirements in the area are highly changeable and specific, and Nokia has consistently been able to successfully deliver the highest quality performance possible

Numbers in the Mashaer area increased 25 per cent from 720,000 for the Hajj pilgrimage in 2014 to 900,000 in 2015

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The RELOAD initiative resulted in a selection of Zain Saudi Arabia’s most capable technical partners being awarded various network expansion and upgrade projects valued at USD 1.2 billion, with Nokia being part of the team tapped to improve the mobile network opera-tor’s infrastructure around Mecca.The city of Mecca is synonymous with the Hajj, which is the spiritual pilgrimage undertaken by religious followers, and sees up to five million pilgrims descending on the city for a concentrated period every year. The city needs to cope with the pressures such an influx of people poses on it, and the mobile telecom infrastructure is no exception. For the duration of the Hajj each year, communications networks become the most densely utilised in the world from the perspective of Erlang per square metre per Hz. Preparing for this surge in network traffic – on both voice and data channels – raises enormous chal-lenges, which Nokia has been navigating for a number of years as one of Zain’s trusted network partners in this region of the country.For Hajj in 2015, Nokia deployed its state-of-art Single Radio Ac-cess Network Advanced (Single RAN Advanced) solution and multi controllers, while also introducing LTE FDD in the 2100 MHz band for the area surrounding Mecca. In addition to the modernisation exercise, Nokia constructed full turnkey sites that were installed and integrated to cater for the continually increasing demands for mobile broadband services during the holy season, specifically demand for high throughput data.“What we did in Mecca for the Hajj season in 2015 involved pushing Physics to the limit,” commented Ali Jitawi, Head of Customer Team, Zain KSA at Nokia. “The fact that the area requiring upgrading is a concentrated one, and that for the majority of the time is considered as being within the Kingdom’s empty area means the great surge in usage and demand during the pilgrimage places tremendous stress on the network.”At periods outside of the pilgrimage timings there is virtually no traf-fic on the network other than the negligible levels generated by the workers in the area. Thus when the season begins, traffic explodes from nothing to tens of thousands of Erlangs and Gigabytes of data per hour in a very dynamic and changeable manner, moving from one area to another within the 10 x 5 kilometres that represents the total pilgrimage area.Despite the technical challenges and intensive network rollout required, Nokia was able to complete the upgrade to Zain’s network around Mecca ahead of schedule and tests were conducted in the lead-up to the pilgrimage season in order to ensure the network’s readiness for service. Preparations extended to core network elements, controllers and IP routers/switches health check and verifications, hardware issues detection and clean-up, software audits, parameter consistency checks, physical audits and tilt changes, spare parts dimensioning and distribution, amongst other activities. Nokia’s professionalism was further tested as a tragic event ahead of the commencement of the Hajj occurred due to bad weather, and teams from Zain and Nokia responded to restore a large number of outages that had been caused by the adverse weather conditions. The ultimate goal being to connect pilgrims to their beloved under the most difficult circumstances.2015 was not the first time Nokia has worked with Zain to boost network capacity around the holy site ahead of the Hajj, and the expe-

rience that has resulted has led to Nokia being able to provide an effective and professional solution for Zain’s requirements. For example, different scenarios were forecast and contin-gency plans devised to identify any situation that might arise.Nokia R&D and product line teams also worked round-the-clock to perform full network audits in a proactive manner, while global support teams joined local ones to provide the best possible technical back up in order to guarantee world-class performance throughout the event.“Network performance KPIs were outstand-ing to say the least,” says Sultan AlDeghaither Chief Technology Officer Zain KSA. “No major issues were observed during the Hajj in 2015, with the stability of network elements remain-ing rock solid. All major benchmarked KPIs improved year-on-year, with the call set up success rate improving from 96% to 99% in 2015, and the drop call rate improving from 1% to 0.5%.”Each passing year Nokia continues to dem-onstrate its leadership with respect to the development and delivery of the latest smart solutions, as well as in relation to advanced levels of competence, knowledge and dedica-tion its teams exhibit in delivering complex solutions.

Quick fActs regArding the hAjj 2015 Voice trafficIn Mecca, including Haram, voice traffic increased 205% year-on-year.

call setup success rate:Improved from 96% to 99%.

call drop rate: Improved from 1% to 0.5%.

Data trafficIn Mecca, including Haram, data traffic increased 400% year-on-year, and there was an equivalent dramatic increase in data traffic in the Mashaer area. 4G traffic was up 450% compared to Hajj in 2014.

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Digitaltransformation

The Zain Digital Frontier and Innovation (ZDFI) business unit is charged with expanding the reach of the Group into the digital space, and developing new, innovative businesses and income streams. Emre Gurkan highlights the progress the unit has achieved to date and the opportunities he believes still lie ahead

Emre Gurkan says Zain Group will continue to identify opportunities in the digital space, and partnering with strong and innovative technology companies

What does Zain mean when it says it would like to evolve to become a digital lifestyle provider?The telecommunications industry has been an incredibly success-ful one, and we believe it shall continue to be, but we do have to accept that it is changing, and we need to keep up with the pace of change, if not inspire it.

Today customers are using their mobile devices for much more than just voice calls, and value is being created through digital ser-vice offerings and applications. So while the business of providing communications connectivity has been our industry’s bread and butter, innovative telcos are also looking to deliver services beyond connectivity as this is where a growing amount of value is being created.

In which areas do you see digital services gaining the most traction in the traditional communications space?The convergent ICT space is vibrant, and Zain Group believes there are many natural advantages and opportunities in the smart cities space; the Internet of Things (IoT); and machine-to-machine (M2M) developments, and this is where we are focusing much of our efforts. However, we also see value in other digital areas including gaming and content development, and as such we have been proactive in collaborating with some of the best technology and content providers globally to develop cutting–edge, sticky services for our customers.

It was very pleasing, for example, that our partnership with UBER was recognised by Ovum in its Telco Services Innovation Radar monthly summary as its most innovative service for November 2015. The partnership was chosen from 82 services launched by service providers around the world.

How important is it for telcos to partner in order to achieve their digital aspirations?The reality of our sector is that data usage is growing at a much faster rate than we are able to monetise it. We believe the contri-bution of data to our overall revenues will continue to grow, and

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what we need to do is look to offer services that are desired by our customers and main-tain our relevance to the usage patterns that currently exist and will continue to emerge over time.

Any partnership, not only in the telecom sector, works when the parties identify the value that the other brings and can identify how cooperation generates greater benefits over going it alone. As long as these ele-ments are present in the partnerships we forge, we are confident that successful interactions will result, and we are looking forward to engaging in such and raising our customers’ satisfaction even further.

Much innovation across the Group ap-pears to be being pushed out from the Zain Innovation Campus in Jordan. Might you detail that?As part of supporting the company’s overall strategic direction, Zain Jordan launched a business unit focused on activating and boosting the entrepreneurial ecosystem in Jordan and across the MENA region through its Zain Innovation Campus (ZINC) initiative. Late last year ZINC celebrated its first year of operation, and continues to look to feed Zain’s internal innovation and build programmes in collaboration with the Human Resources department, which are aimed at boosting untapped employee innovation. The business unit’s mission is to build corporate culture practices that support and ignite innovation and creativity from within, and allows space, opportunity and development to emerge and help others grow. The success stories and viable businesses that have sprung out of ZINC are truly gratifying, justifying the resources invested in the initiative.

Late last year ZINC celebrated its first year of operation, and continues to look to feed Zain’s internal innovation and build sustainable programmes

ZTC 2015 was held in Bahrain in the presence and under the patronage of His Excellency Engineer Kamal Bin Ahmed, Minister of Transportation and Telecommunications for the Kingdom of Bahrain

Zain Group hosted its fifth annual Zain Technology Conference (ZTC), 30 November to 2 December, 2015 in the economic friendly city of Manama, Bahrain. The theme for the conference was ‘Transforming Our World’, reflecting Zain’s strategic aspirations of delivering on a compelling digital lifestyle to its customers.

ZTC 2015 was held in the presence and under the patronage of His Excellency Engineer Kamal Bin Ahmed, Minister of Transportation and Telecommunications for the Kingdom of Bahrain and attended by Zain Bahrain Chairman, Sheikh Ahmed Bin Ali Al Khalifa. Also present was Zain Group CEO Scott Gegenheimer, Zain Bahrain CEO Mohammed Zainalabedin, and Zain Group CTO Hisham Allam amongst a host of Zain employees who actively participated in the event.

Notably, the opening session of the three-day event saw a keynote presentation from Dr. Jean Pierre Scerri, Director of Legal Affairs from Bahrain’s Telecom Regulatory Authority.

For some time now, Zain has recognised the enormous growth opportunities available in the B2B, enterprise, and smart city spaces, and these sectors have become major areas of focus for the company, requiring the full support of all its partners to convert them into viable revenue streams. Demand for mobility, broadband, and cloud services are drivers for transformation in the modern ICT space, and Zain is on a perennial mission to deliver cutting-edge apps, services, and devices to support these mega-trends.

With over 60 technology providers and vendors having participated in and showcased their latest technologies at ZTC 2015, and with an attendance that exceeded 700, the conference concluded as being one of the company’s most impressive to date.

Zain Technology conference (ZTc) 2015

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Zain turns into a digital frontrunner powered by ericssonZain Group and Ericsson have partnered to deploy digital transformation; seven out of eight markets have deployed BSS

Ericsson is set to continue working with Zain Group to enhance its position in the market and support the needs that the transforming telecoms sector demands to become a regional frontrunner.During 2015, Ericsson worked with Zain Group and signed a number of deals that strengthened the organisations and their strategy throughout the year. Ericsson has partnered with Zain in seven markets to promote digital transformation and improve customers’ experience.Both companies announced the Middle East’s first demonstration of proof of concept for Network Functions Virtualisation (NFV) at the Zain Technology Conference, held in Bahrain November 30, 2015 - December 2, 2015.Zain Iraq and Ericsson signed a managed services deal for three ad-ditional years till the end of 2019. Ericsson is tasked with optimising and managing Zain Iraq’s IT operations and mobile network, which currently consists of more than 4,000 sites across the country. Both companies also entered into a network transformation agreement to upgrade Zain Iraq’s network from 2G to 3G, thereby providing users with better coverage, higher connection speeds and increased voice quality.Zain Bahrain deployed a new network, managed by Ericsson, provid-ing customers with a whole new realm of high-speed digital content capabilities to its increasingly technologically-savvy customer base. The operator recognised Ericsson with an award for ‘Best Network’ in 2015.Scott Gegenheimer, Zain Group CEO says: “Partnering with Ericsson enables us to achieve our strategic goals when it comes to enhanced operational effectiveness and customer experience.”Rafiah Ibrahim, President, Region Middle East and Africa, Ericsson,

says: “Ericsson believes in the Networked Society, which is fuelled by the digital trans-formation while creating positive change on people, business and society. Our partners are playing a major role enabling this transfor-mation, creating a positive change, and we see our role to support them with our latest innovations and technologies. The Networked Society is becoming a reality across the region and is now topping our partners’ agenda, such as Zain Group.”Patrik Melander, President Customer Unit GCC, Pakistan & Global Customer Unit Zain at Erics-son Middle East & Northern Africa, says: “Being a frontrunner takes a lot of focus and applying best practices to monetise data. We continue to share our global experience and bringing Erics-son’s insights with Growth Codes, Ericsson ConsumerLab reports and innovations to apply them to Zain’s strategy. Ericsson is fully com-mitted to powering Zain to become a global digital frontrunner.”

Rafiah Ibrahim, President, Region Middle East and Africa, Ericsson, says: “The Networked Society is becoming a reality across the region and is now topping our partners’ agenda, such as Zain Group”

Patrik Melander, President Customer Unit GCC, Pakistan & Global Customer Unit Zain at Ericsson Middle East & Northern Africa, says: “Being a frontrunner takes a lot of focus and applying best practices to monetise data”

“Partnering with Ericsson enables us to achieve our strategic goals when it comes to enhanced operational effectiveness and customer experience”

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Customer ExperienceDuring the course of 2015, Zain further enhanced customer experience across all touch points in the customer journey by utilising customer feedback, developing a thorough understand-ing of customer needs, and by linking frontline performance with rewards to drive relevance, simplification, and optimisation in all customer interactions.

Operational EffectivenessZain’s goal is to become one of the most cost efficient provid-ers globally. The company is focused on reducing total cost of ownership (TCO) through a broad range of OPEX and CAPEX optimisation initiatives combined with enhanced procurement processes. These will help to drive efficiencies and maintain healthy EBITDA margins, which were reflected in the impressive Group-wide 44% EBITDA margin reported for 2015. Optimising TCO is the main lever for net income sustainability: with service revenues under threat, and lower mobile data ROI, TCO optimisa-tion is the primary means of guaranteeing sustainable net income. In pursuit of operational effectiveness and excellence, in 2015 Zain drove several initiatives covering operational alignment, includ-ing revamping procurement processes, optimisation, as well as value-based CAPEX planning and cost optimisation in each of the operating companies.

Making things happen

Zain’s strategy to create a digital lifestyle provider is premised on six transformational initiatives:

Customer Experience – Putting the customer at the heart of everything the company does

Operational Effectiveness – Enhancing the bottom line through operational efficiency initiatives

Value Management – Establishing the building blocks to create more value

B2B – Leading the ICT market in the Middle East, delivering a world class enterprise service

Digital Frontier and Innovation – Become a regional trendsetter in the digital space

Talent Development – Inspiring employees to achieve excellence through engagement

Zain Group commenced its elite graduate programme called Zainers 2.0, which is aimed at infusing fresh new talent into the organisation at an early stage

These transformational initiatives are more relevant today – given the manner in which global and regional markets are evolving and the impact major trends are having on the ICT industry. In particular, Zain is focused on sustaining value in its core business of voice, messaging and mobile broadband and is looking to maximise new revenue streams in the lucrative, but regionally-fragmented B2B segment. In addition, Zain is looking to build scale in the emerging regional digital landscape, extending to areas such as e-Commerce, digital content, advertising, gaming and mobile application development.

2015 marked the ongoing transformation of the Group. As an organisation, it em-braced the strategic direction and the six transformational initiatives that lie at its core. Significant and encouraging progress was achieved across each of the initiatives, laying the foundations for continued success in the years to come.

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Initiatives at the operating company level included alignment of international connectivity costs, and network maintenance. Furthermore, Zain is investigating optimal approaches to divest passive infrastructure in Kuwait and Saudi Arabia.

Value ManagementAs mentioned earlier, Zain is looking to sustain its leadership position and to counter market erosion threats from over-the-top (OTT) players and aggressive competition from operators present in its markets. In order to achieve this, the company is utilising its business intelligence platforms to build a strong customer value management framework premised on well-defined customer seg-ments in each of its markets.

B2BThe market size for enterprise (B2B) services is estimated to be substantial across the region. Zain’s ambitions within the B2B space focuses on building scale in enterprise mobility, fixed-mobile convergence solutions, connectivity, machine-to-machine (M2M) as well as hosted and managed services including personal and corporate cloud services and applications.

Zain is also expanding its wholesale infrastructure to support content delivery networks. This portfolio of services and assets is to be offered to governmental customers and verticals including oil and gas companies, automotive, transportation and logistics businesses, utilities and banking. Through a strategic partnership with Vodafone, Zain deployed M2M services in Kuwait in 2015, with plans to launch similar services in Bahrain and Saudi Arabia in 2016. Applications include telemetry systems, smart metering, wireless security, cameras and fleet management.

Digital Frontier and InnovationZain’s Digital Frontier and Innovation unit (ZDFI) is tasked with cementing the Group’s position within the digital space. ZDFI focuses on the areas of innovation, digital services, corporate venturing and smart cities.

Zain sponsored the eighth Pan Arab MIT Enterprise Forum start-up competition in a bid to promote innovation and engage aspiring entrepreneurs in mentorship, networking and development

ZDFI’s mandate is to undertake the follow-ing:

• Determine innovative trends to lead regional implementation

• Exploit new digital opportunities in key verticals• Participate in regional ICT venture capitalist funds focused on early stage companies• Leverage venture capital capabilities to navigate the digital ecosystem• Capitalise on the smart cities eco-system and develop go-to-market approach

Ultimately, ZDFI aims to identify new busi-ness areas, value-adding strategic partner-ships, accretive acquisition opportunities and synergistic corporate venturing invest-ments which, collectively, will create new revenue streams to fully utilise the Group’s high-speed broadband networks, customer assets, network intelligence, and payment and billing infrastructure. Within the digital services and innovation space, ZDFI is focused on identifying opportunities in the m-advertising, m-health, OTT communica-tions m-payments and financial-technology services domains. The ultimate goal of ZDFI is to drive the organisation towards innova-tion, agility and adaptability, aiming at build-ing an innovation culture both within Zain and within the communities it serves. The company is also looking to be viewed as one of the leading trendsetters in the digital revolution engulfing the region.

In March 2015, Zain sponsored the eighth Pan Arab MIT Enterprise Forum start-up competition in a bid to promote innova-tion and engage aspiring entrepreneurs in mentorship, networking and development with an aim to capitalise on the most prom-ising innovative ideas in the regional digital space.

Talent DevelopmentZain launched initiatives focused on improv-ing employee engagement and empower-ment during 2015, as well as learning and development programmes to adapt to and encourage employee regional mobility. In 2016, Zain Group is set to continue strategic executions reinforced by employee engage-ment and empowerment to leverage its leading technology, presence and strong brand.

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ZINC continues to attract aspiring entrepreneurs, a number of whom have gone on to commercialise several viable businesses from their ideas

A year of firsts

In December 2015 Zain Jordan marked the first anniversary of the establishment of the Zain Innovation Campus (ZINC) in Amman, which has since developed to become the central hub for all the operator’s modernisation efforts. It also attracts aspiring entrepreneurs who have gone on to commercialise several viable businesses from their ideas

As the centre of many of Zain’s Group-wide innovations, the company’s operation in Jordan enjoyed an active period in 2015, as it continued to push boundaries and pioneer new user experiences that could be dupli-cated in other markets. At the end of 2014, Zain took the strategic decision to acquire 4G spectrum and top-up its 3G spectrum at a combined cost of USD 270 million. This made the operator the first 4G operator in the Kingdom when it launched the network commercially in Q1 2015. The move has proved to be a rewarding one, with data revenues (excluding SMS & VAS) represent-ing 29% of total revenues in 2015, up 18% year-on-year.

Zain Jordan continues to innovate and in October 2015 launched the Zain Jordan App, a self-care application allowing the manage-ment of mobile account transactions from the phone in real-time.

Another innovation Zain Jordan introduced during the course of the year was the launch of its in-vehicular Car-Fi Wireless Internet service, which was a first for the Kingdom. The service provides wireless 4G /LTE Inter-net coverage inside vehicles, with the aim of enriching the end-user experience anywhere and everywhere.

The service is provided in the form of various bundles of 4G/LTE technology that enable

customers to enjoy high-speed Internet at speeds of up to 150 Mbps, where the Car-Fi device can provide Internet connection to 10 devices at reasonable prices.

In line with Zain Jordan’s ongoing drive to improve customer experience and satisfaction, the operator partnered with Microsoft Jordan to enable its customers to purchase digital content, applica-tions and games from the Windows Phone Store, using Microsoft smartphones for the first time in the Kingdom. This was facilitated through the introduction of the Zain Pay service, which operates using Direct Operator Billing, powered by SLA Mobile, a global mobile solutions company.

Zain Pay enables Zain customers to buy the latest apps and games from the Windows Phone Store, available in Arabic and English, without a credit card, by charging the purchases directly to monthly post-paid bills or prepaid accounts.

Similarly, Zain announced the introduction of a facility permitting customers to purchase mobile applications and digital content from Samsung Galaxy Apps Store through Direct Operator Billing.

The delivery of solutions for enterprises is a strategic priority at the Group level, and in March 2015, Zain Jordan began to deploy the logistics required to execute the first phase of a system to monitor and track governmental vehicles, as per a governmental tender it was awarded in collaboration with its strategic partners “Tracklink” and General Computers & Electronics Co.

As per the tender, Zain activated the service for a fleet of 5,000 governmental vehicles to start, with the final phase set to include 20,000 vehicles.

It remains gratifying for the Zain Jordan team to continue to receive accolades for the innovation projects they initiated during the course of the year, with the company having received two awards at the prestigious 2015 Global Telecom Business (GTB) Innovation Awards held in London. ZINC was singled out as the “Business Service Innovation” award winner, while Zain Pay was awarded the “Consumer Service Innovation” prize.

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AdvertoriAlericsson and cisco to create the networks of the futureCustomers are now able to accelerate their business transformation by drawing on the parties’ complementary capabilities

In November 2015, Ericsson and Cisco announced a global business and technology partnership to create the networks of the future.The multi-faceted relationship will offer customers the best of both companies: routing, data centre, networking, cloud, mobility, man-agement and control, and global services capabilities. Together the companies plan to deliver customer value by:• Offering service provider customers an end-to-end product and services portfolio, and joint innovation that accelerates new business models,• Creating the mobile enterprise experience of the future through a highly secure technology architecture for seamless indoor/outdoor networks, and• Channelling the combined scale and innovation of both companies to accelerate the platforms and services needed to digitise countries and create the Internet of Things.In a world driven by mobility, cloud, and digitisation, the networks of the future require new design principles to ensure they are agile,

autonomous, and highly secure. Ericsson and Cisco will meet this challenge together by offering end-to-end leadership across network architectures including 5G, cloud, IP, and the Internet of Things - from devices and sensors to access and core networks to the enterprise IT cloud.Customers are now able to accelerate their business transformation by drawing on the parties’ complementary capabilities, including global services capabilities such as consulting, integration, and support to managed opera-tions across IT and networks.The strategic partnership will be a key driver of growth and value for the next decade, with each company benefiting from incremental revenue in calendar year 2016 and expected to ramp to US$1 billion or more for each by 2018.Hans Vestberg, President and Chief Execu-tive Officer at Ericsson, says: “I am excited to work with Cisco on continuing to shape the Networked Society. Foremost, we share the same vision of the network’s strategic role at the centre of every company’s and every industry’s digital transformation. Initially the partnership will focus on service providers, then on opportunities for the enterprise seg-ment and accelerating the scale and adoption of IoT services across industries. For Ericsson, this partnership also fortifies the IP strategy we have developed over the past several years, and it is a key move forward in our own transformation.”Chuck Robbins, Chief Executive Officer at Cisco, said: “With the pace the market is moving, the successful companies will be those who build the right strategic partner-ships to accelerate innovation, growth, and customer value. Today’s announcement brings together two visionary industry leaders, with complementary cultures and track records of innovation. We have worked with Ericsson during the last year on developing a strategy for future industry leadership, and can start executing together today. Our partnership will drive growth for both companies, unique value for our customers, and incredible innovation for the industry.”

Hans Vestberg, President and Chief Executive Officer at Ericsson

“I am excited to work with Cisco on continuing to shape the Networked Society”

16

Coordinated innovation

The Zain Group is a sum of its various parts, and while there is significant Group support offered to the individual operating entities, there is also a keen understanding that the individual market dynamics the respective operations face can be quite varied

Kuwait As the flagship operation of the Zain Group, Zain Kuwait continues to be held up as an example from which other country operations can learn and look to implement forward-looking strategies within their own territories.

At the end of 2015, the operator announced the successful testing of the Middle East’s first 4.5G mobile broadband technology on its advanced network. The test, achieved in strategic partnership with Huawei, saw the operator’s network reaching high-speeds of 1 gigabyte per second (1 Gbps).

The operator also enjoyed a strong year with respect to innovation with the Direct Payment Channel (DOB) platform it promoted during 2015 witnessing wide demand amongst its customers.

Zain Kuwait’s Anghami music application, which allows customers to listen to millions of Arabic and international tracks instantaneous-ly, proved to be extremely popular during the course of the year. Using the application, customers are able to share music with their friends on their favourite social networks, and are also able to download as many tracks as they want, and access them while offline via Android or iOS devices.

GO (OSN) gives Zain Kuwait customers the ability to watch the biggest Hollywood and Arabic movies, award-winning TV box sets,

Zain Kuwait’s Al Shuhoor application was offered to customers for free for the fourth Ramadan in a row, allowing them to check all Ramadan-related information easily

Zain Kuwait CEO, Eaman Al Roudhan honours Li Dafeng, President of Huawei Middle East and Africa, during his visit to Zain’s headquarters

and kids’ shows from around the world. The application is available on Android and iOS devices, while the Livin application permits the watching of live streaming TV channels in HD and comes with a huge library of movies (Arabic and English) accessible via a mobile or tablet.

Zain Kuwait enjoyed digital success through the delivery of other TV content, including IC Flex, as well as by offering an Alternate Reality Game (ARG) application in the form of Kabt Bin Saleh, which is an interactive game that is a combination of a puzzle and Kuwaiti cultural information.

BahrainZain Bahrain’s totally revamped 4G network, in which the opera-tor has invested in excess of USD 100 million, saw data revenues (excluding SMS & VAS) increase 11% in 2015, representing 33% of overall revenues for the year.

Initiatives such as Zain Pay, which allows customers to purchase apps for their Galaxy smartphones directly from the Samsung Galaxy Apps store helped Zain Bahrain drive the significant data revenues that it generates.

Earlier in 2015, the operator announced the launch of Zain Pay in partnership with Microsoft; to offer a direct mobile operator billing facility for the Windows Phone Store.

The first-of-its-kind initiative in Bahrain enabled Zain customers to charge their app purchases, including the latest applications and digital games from the store, without needing to resort to a credit card. Rather, customers can go about the purchase of apps by directly charging the amounts to their monthly post-paid bills or prepaid accounts.

17

Iraq

Despite facing significant ongoing socio-political challenges in the country, Zain Iraq was still able to report that with the launch of 3.9G services in the country at the beginning of 2015, data related revenue formed 7% of the total revenues, reflecting an annual growth of 34%.

The operator continues to find ways to differentiate itself, having introduced Zain Top Up, which is a unique free-of-charge applica-tion that allows customers to recharge their accounts through their mobile phones. What makes the application even more distinctive is that it was the first branded one to be introduced to the market along with the 3G launch. It now enjoys over 50,000 active users.

Zain Iraq also operates a Zain Chat service, which is an applica-tion that targets smartphone users. It was the first branded chat application to be introduced to the market, and counts more than 30,000 active users.

With increasing amounts of data being stored and accessed via the cloud, Zain Safe is a mobile application introduced by Zain Iraq to allow customers to securely backup/restore personal data on the cloud. It currently has more than 3,000 active users.

During the course of 2015 Zain Iraq hosted the Start-up Weekend, which is a workshop that gathers college students, graduates and young individuals from around the country. This pool of young Iraqis is provided with a creative space to pitch their ideas about potential start-ups, with a voting session conducted to decide which of those projects has the potential to be implemented.

Zain Iraq also hosted the Hakathon Erbil competition, which drew together Iraqi youth and technical personnel, such as system developers and programmers, to exchange knowledge and ideas regarding the latest technology. The operator also over-sees an innovation development project in partnership with the UNDP, holding three workshops in Baghdad, Erbil and Basra that included training about youth empowerment in Iraq and soft-skill building.

Customers are able to take advantage of first-of-its-kind developments such as the gaming partnership with Zeptolab that saw exclusive branding present throughout the new Cut the Rope: Magic game

Zain Iraq hosted a Start-up Weekend, which is a workshop that gathers college students, graduates and young individuals from around the country

Lebanon Touch, the leading mobile operator in Lebanon, which is managed by Zain Group, continues to introduce market firsts, helping it to maintain its leadership position. For example, the operator launched its Leb Keys application, which is a Latin Arabic keyboard on which customers can write all their Latin Arabic messages in a fun and easy way. Once downloaded, the Leb Keys keyboard becomes part of the pre-set keyboard menu and can be used across apps (WhatsApp, Email, Facebook, Twitter), making messag-ing much easier.

The application has gone on to win various awards at the Dubai Lynx Creativity Awards 2015, and the London Global Telecoms Business Innovation Awards 2015, amongst others, and was downloaded 70,000 times in a little over one month.

Touch’s Self-Care is another impressive app from the operator, topping regional ratings for such on Google Play, with 820,000 downloads already having been made.

The Lebanon operator also continues to benefit from the launch of ‘touch LAB,’ a pioneering concept store located in the heart of Beirut Central District area.

With innovative design and functionalities, the service centre enables customers to experience first-hand telco products and services via interactive service demos and tech installations. Users can test advanced technological equipment varying from high-speed data, including 4G coverage, speed test and a data calculator, mobile TV, roam-ing and other content applications, to online number booking, and self-care facilities such as activation and payment services.

18

Customer inactivity can plague mobile money

deployment, posing threats to the viability of

the service. Mobile money service providers

require the right tools to address the challenges

of encouraging subscription and increasing

usage. eServGlobal offers an Advanced

Customer Adoption (ACA) module as part of

its comprehensive mobile money solution.

Service providers can harness the potential of

user stimulation, promotions and segmentation

to ensure the ongoing usage of mobile money

services. Telecommunication operators in

particular are able to capitalise on the extensive

user data that exists within their network. By

taking a big-data approach to analysis, using

a tool such as the ACA module, it is possible

to build segmented lists of users for tailored

campaigns.

The self-service ACA module enables service

providers to deliver targeted, customised and

timely promotions, and rewards, each with a

quick turnaround time to market.

eServGlobal is offering interested service

providers a free trial access to the demo

platform. To register go to: eservglobal.com

Making

Mobile

IN MARKETS AROUND THE GLOBE, facilitating financial services through the mobile

is seen as the future of financial inclusion.

The number of live deployments has been

steadily increasing for several years. According

to the GSMA, there are now more than 260 live

mobile money deployments, however there

remains 2 billion working-age adults globally

who have no access to formal financial services.

eServGlobal believes the ubiquity of the mobile

represents an unparalleled opportunity to offer

forward-thinking financial services which

exceed subscribers’ expectations.

Zain Group shares eServGlobal’s vision of

facilitating financial inclusion through the mobile.

eServGlobal is working closely with the Zain

Group to roll out mobile money services across

several of their affiliates.

Earlier this year eServGlobal and Zain Iraq

launched the ‘Zain Cash’ service in Iraq.

Through Zain Cash, customers can have a

mobile wallet linked to their SIM card, enabling

customers to make financial transactions easily

and at any time (Cash-In/ Cash-out, transfer

money from wallet to another, recharge for

prepaid account & bill payment for postpaid

“eServGlobal believes the ubiquity of the mobile represents an unparalleled opportunity to offer

forward-thinking financial services which exceed subscribers’ expectations.”

account). The service is authorized by the

Central Bank of Iraq CBI).

Smartphone use in emerging markets is

expected to experience significant growth

in the coming years following the market-

entrance of low cost handsets. Industry

body, the GSMA, forecasts an increase of

3 billion smartphones users between 2013

and 2020. However, unlike the boom to now,

emerging markets will drive the next wave of

growth.

This will give users unprecedented access to

the mobile Internet, changing the shape of

mobile financial services. The inclusion of an

app as part of a mobile money deployment will

improve end-user experience, and address

usability barriers that have hampered service

uptake, helping to overcome potential

literacy and cultural barriers through features

such as a graphical user-interface.

The app could also offer the possibility to

combine mobile money with social network

use, thereby leveraging a user’s social network

to encourage mobile payments such as

domestic remittance or merchant payment.

The rise of smartphones

Financial Inclusion

Driving usage and adoption

Mobile Money RechargeRemittance

Saudi Arabia Zain’s operation in Saudi Arabia witnessed an impressive 58% rise in data revenues (excluding SMS & VAS) year-on-year in 2015, which represented 25% of total revenues as the company invested heavily and expand-ed its modern 4G LTE network.

Throughout the course of the year the op-erator introduced exciting new services and applications, including the Anghami applica-tion, which allows users to stream audio, and Shazam, which permits the identification of music and song lyrics.

Zain Saudi Arabia also entered landmark agreements with a series of technology gi-ants during the course of the year, including with Google, which gave Zain Saudi Arabia customers the ability to integrate their Zain mobile numbers with Google Wallet and be able to purchase digital goods via direct operator billing.

Similarly Zain Saudi Arabia collaborated with Microsoft in order to allow Zain Saudi customers to direct bill digital goods bought through Microsoft Wallet.

Given the demand for mobile video services in the Kingdom, Zain Saudi Arabia launched its Jahiz video service, which allows users to watch videos without consuming their Inter-net data plan and without buffering.

Zain Saudi Arabia also introduced Z-safe to enable customers to backup and store their mobile data on a protected cloud system.

Sudan Data revenues (excluding SMS and VAS) formed 11% of total rev-enues for Zain Sudan during the course of 2015, with an impres-sive annual growth of 102% (91% in USD terms). The operator has been developing innovative non-voice services, including a SMS advertisement offering, which disseminates material based on subscribers’ location. The app also considers other segmentation factors including demographics, and behaviour.

The SMS advertisement service has multiple objectives including to increase customer satisfaction by providing relevant mes-sages, while also offering retail companies an effective advertising platform.

Zain Sudan further bolstered its own mobile app in 2015 by tying up with Aptoide to provide a market place that offers access to more than 150,000 applications. Aptoide is a software company specialised in enabling developers, OEM, telcos, and enterprises to distribute their Android apps through their own stores. The Zain labelled application is offered without co-branding, and the customised layout is consistent with Zain branding.

The Zain Sudan app store was first launched in June 2014, and counted 88,000 application downloads as of April 1, 2015.

Zain Group’s partnership with UBER – the first of its kind in the region – is currently effective and operational in Saudi Arabia, amongst other Zain markets

Customer inactivity can plague mobile money

deployment, posing threats to the viability of

the service. Mobile money service providers

require the right tools to address the challenges

of encouraging subscription and increasing

usage. eServGlobal offers an Advanced

Customer Adoption (ACA) module as part of

its comprehensive mobile money solution.

Service providers can harness the potential of

user stimulation, promotions and segmentation

to ensure the ongoing usage of mobile money

services. Telecommunication operators in

particular are able to capitalise on the extensive

user data that exists within their network. By

taking a big-data approach to analysis, using

a tool such as the ACA module, it is possible

to build segmented lists of users for tailored

campaigns.

The self-service ACA module enables service

providers to deliver targeted, customised and

timely promotions, and rewards, each with a

quick turnaround time to market.

eServGlobal is offering interested service

providers a free trial access to the demo

platform. To register go to: eservglobal.com

Making

Mobile

IN MARKETS AROUND THE GLOBE, facilitating financial services through the mobile

is seen as the future of financial inclusion.

The number of live deployments has been

steadily increasing for several years. According

to the GSMA, there are now more than 260 live

mobile money deployments, however there

remains 2 billion working-age adults globally

who have no access to formal financial services.

eServGlobal believes the ubiquity of the mobile

represents an unparalleled opportunity to offer

forward-thinking financial services which

exceed subscribers’ expectations.

Zain Group shares eServGlobal’s vision of

facilitating financial inclusion through the mobile.

eServGlobal is working closely with the Zain

Group to roll out mobile money services across

several of their affiliates.

Earlier this year eServGlobal and Zain Iraq

launched the ‘Zain Cash’ service in Iraq.

Through Zain Cash, customers can have a

mobile wallet linked to their SIM card, enabling

customers to make financial transactions easily

and at any time (Cash-In/ Cash-out, transfer

money from wallet to another, recharge for

prepaid account & bill payment for postpaid

“eServGlobal believes the ubiquity of the mobile represents an unparalleled opportunity to offer

forward-thinking financial services which exceed subscribers’ expectations.”

account). The service is authorized by the

Central Bank of Iraq CBI).

Smartphone use in emerging markets is

expected to experience significant growth

in the coming years following the market-

entrance of low cost handsets. Industry

body, the GSMA, forecasts an increase of

3 billion smartphones users between 2013

and 2020. However, unlike the boom to now,

emerging markets will drive the next wave of

growth.

This will give users unprecedented access to

the mobile Internet, changing the shape of

mobile financial services. The inclusion of an

app as part of a mobile money deployment will

improve end-user experience, and address

usability barriers that have hampered service

uptake, helping to overcome potential

literacy and cultural barriers through features

such as a graphical user-interface.

The app could also offer the possibility to

combine mobile money with social network

use, thereby leveraging a user’s social network

to encourage mobile payments such as

domestic remittance or merchant payment.

The rise of smartphones

Financial Inclusion

Driving usage and adoption

Mobile Money RechargeRemittance

20

In search of greater glory

Zain recently announced its participation, for the second consecutive year, in the sixth edition of the EFG Sailing Arabia-The Tour (SATT) 2016 competition. This event is the Gulf region’s leading offshore race, and is organized by Oman Sail

The Zain team, which surprised many by finishing a sensational third in last year’s event and even winning one of the legs, has partnered again with global technology provider Huawei and global law firm Clifford Chance to race a high performance racing yacht - a Farr 30. The Zain team benefits from the close support and patronage of Zain Vice-Chairman, Bader Al Kharafi, who was a key part of the sailing crew last year.

The new 760 nautical-mile sailing route be-gan in Dubai, UAE on 15 February, passing through Abu Dhabi, Doha, Khasab, Sohar and ending in Muscat, Oman on 29 Febru-ary. EFG Sailing Arabia – The Tour (EFG SATT) delivers high level racing, attracting top amateur and professional sailors from four continents in one of the most beautiful sailing destinations. The Farr 30 is one of the most exciting vessels on the professional sailing circuit and as a one-design event, the focus is on the skills.

The new 760 nautical-mile sailing route began in Dubai, UAE on 15 February, passing through Abu Dhabi, Doha, Khasab, Sohar and ending in Muscat, Oman on 29 February

The eight-person crew includes sailing nov-ices from Zain and Huawei’s management ranks, together representing a very mixed level of sailing proficiency. They will be led by two sailing veterans, Cedric Pouligny, the skipper; and Gerald Veniard, the navigator, who are previous winners of the EFG SATT race. Between them these two veterans of the sport have competed in the sailing race in every year since its establishment, and they are both highly accomplished offshore sailors, with numerous Transat races, Tour de France a la Voile, and Route du Rhum achievements to their credit.

The 2016 EFG SATT race is expected to throw up a number of unique challenges for the Zain sailing team. As the traditional route has been redesigned to visit six of the region’s most prestigious sailing venues, it will create a more exacting test for the boat and crew in the form of strong and sustained headwinds in the early stages. In addition, the crew will have to overcome difficult currents along with other obstacles (fishing nets, unlit oil installations, and so forth), as well as all the shipping traffic in one of the world’s busiest waterways.

Supporting Zain’s participation in the sailing race are two key strategic business part-ners. Huawei, one of the world’s leading suppliers of mobile telecom equipment and smartphones, is marking its 16th year in the Middle East. The company is a major supporter of sport across the GCC, and has a strong interest in promoting sustain-able business around the world. Clifford Chance is a leading global law firm, which has worked with Zain for decades. This year Clifford Chance marks 41 years in the Middle East, having advised on many high-profile transactions including several large sporting events.

Sailing Ahead in A Better Connected World

BRINGING THE FUTURE CLOSER WITH

INNOVATION.PURSUING INNOVATION AS A MEANS TO OVERCOME CHALLENGES IN THE

MENA REGION

THE ZAIN 2016 THOUGHT LEADERSHIP REPORT

TLR 2015 19.5x26 E AW.indd 1 2/10/16 11:06 AM