Where We Started

Establishment of Zain

Formerly known as MTC (Mobile Telecommunications Company), Zain was established by an Amiri Decree in 1983 with a capital of 25 million Kuwaiti Dinars. From inception, Zain’s aim was to pioneer the mobile telecommunications sector in the country, providing cellular services and connecting people through wireless communication. With a vision to expand beyond Kuwait to continue to foster development and create new opportunities for growth, Zain later embarked on a journey of regional and global expansion.

The company’s first mobile network Extended Total Access Communication (ETACS) also known as first-generation (1G) analog cellular technology,  allowed for basic voice communication. The introduction of 1G technology in Kuwait marked a significant leap forward in the way people communicated. 1G technology brought the concept of wireless cellular communication to the country. With 1G,  residents in Kuwait were able to make and receive mobile phone calls in addition to using a landline.  However, there were drawbacks to 1G as coverage was not available everywhere and the sound quality was still considered weak in addition to the high cost of the service acquisition This technology nonetheless was considered revolutionary as it allowed individuals to connect and communicate on the go, bringing a new level of convenience and mobility to their daily lives. While 1G mostly focused on voice communication, it laid the foundation for further advancements in mobile technology.

Governance of the Company

The company’s governance was founded on a robust establishment, grounded on solid corporate governance processes overlooked by the Kuwaiti Stock Exchange regulations for publicly listed companies. As the established market leader in Kuwait, the company seized the opportunity to construct an expansive infrastructure, introduce and engage Kuwaiti citizens in its workforce, foster enduring customer relationships and solidify its place as a top service provider.

In 1985,  MTC became a publicly listed company listing its shares on the Kuwaiti Stock Exchange allowing investors to buy and trade stocks in the public market. The move  brought forth several benefits including supporting the company's access to capital, increasing its visibility and drawing attention of investors  contributing to its exponential growth and success.

The Gulf War - Iraq’s Invasion of Kuwait

On the 2nd of August 1990, Iraq invaded Kuwait, creating havoc and causing mass destruction across the country.  The invasion highlighted the pivotal role mobile telephone systems play in a country’s infrastructure, whether it’s used for communications, logistics, supply, humanitarian assistance, or geolocation. Unfortunately, during the first week of the invasion, the occupying forces destroyed the mobile and paging networks by either looting equipment, switches or destroying communications infrastructure.

At the initial phase of the invasion, base stations, and energy systems along with important documents were destroyed. Several company’s employees who looked after the safety of the company’s assets within possible limits were able to secure some confidential documentation. The base stations were also exposed to bombardment by the Allied Forces as a result of being used by the Iraqi forces as communication centers.

The paging system was also destroyed as the main system was looted resulting in the inability to use the base stations that remained safe. The maintenance center suffered complete destruction, resulting in the loss of all its machinery, testing equipment, and spare parts.  The devastation and loses for the company were challenging and quite significant.

After the liberation of Kuwait, some of the company members including Board members and employees struggled to meet in Kuwait as there was no means of the communication which also included the cut-off of electrical current and water supply. The first meetings held were in Dubai and Manama to gain a better understanding of the total damage caused and discussions focused on how the company aimed to move forward. The main challenges faced in rehabilitating the infrastructure included the numerous mine fields and oil lakes spread around the base stations coupled with extremely high temperatures from burning oil wells. In addition, the pollution created by the burning oil wells left clouds of darkness across the country making it difficult to locate the base stations, increasing the risk of entering mine fields.

After the Kuwaiti Airport started to semi operate, the needed equipment to rebuild the systems were gradually shipped in with the paging system able to fully operate again on October 1991 and the mobile system later that year.

Because of the invasion, the company’s economical losses were estimated at 34.2 million Kuwaiti Dinars. The figure includes the expected economic activity during this time period, profit estimated to be realized, and present cost of replacing damaged assets. During that time, the company applied for compensation from the Kuwaiti government to help with covering the losses and obtained a loan from the National Bank of Kuwait to finance the purchase of equipment for mobile and paging systems and the construction of buildings and utilities.

The company was not only focusing on rebuilding infrastructure that was lost but also wanted to ensure it continued to advance and grow at the trajectory it was heading towards before the invasion. As such, the company established a contract with a specific vendor to provide the company with a new computer system to serve the administration and financial purposes. The company looked to purchase a new computer system for billing both the paging and mobile systems to be able to handle the increased capacity of customers.

The invasion also impacted the company’s employee mix.  Right before the invasion, the number of employees was at 155 of which 12% were Kuwaiti with a 50% concentration in the Technical Department. After the liberation the number of employees dropped to 97 out of which 32% were Kuwaitis due to the local manpower market being impacted by the circumstances after the liberation.

After the liberation, the company assessed the capacity required in the country for the paging system which was identified at 50 thousand customers. Due to the lack of access to needed equipment, the company struggled to set up the base stations. However, it was able to fulfill the needs of the market by June 1992 by setting up an addition of 8 base stations. The company slowly progressed to having over 35 base stations across the country by the end of 1992.

Due to the bravery of the employees that saved discrete and important company documentation, the company was able to preserve the rights of the company and its customers. After the company was able to operate the paging system it was able to reactivate the service for existing subscribers who still had their pagers in custody. After restoring existing pagers, the company started distributing the batches of pagers starting October 1991 and onwards, which consisted of 6,500 units including previous customers who needed their pagers to be replaced because they were either lost or damaged.

This time period highlighted the correlation between the availability of telecommunications services and protection of human rights. The company’s rapid response to rebuilding the needed infrastructure indicates the role the company played in upholding human rights by ensuring access to communication, which allowed the citizens to exercise their right to information and connect with their loved ones. It is important to also recognize that the re-establishment of the base stations also facilitated effective coordination and response efforts for humanitarian assistance.

Introduction of GSM/2G:

As mobile technology continued to advance, the development of GSM/2G was officially launched in Finland in 1991. Only four years after   the completion of the rehabilitation phase post the invasion, Zain introduced GSM technology in the Kuwaiti market. The GSM’s impact on the economy enabled improved call quality, messaging, and basic data services. This marked a significant milestone in the company's growth, as it opened new pathways for seamless communication. The introduction of 2G changed the landscape and created a cultural revolution by providing people for the first time the ability to send SMS messages, picture messages and multimedia messages.

During this time period, the company still considered its activities to be technologically driven and the focus was to roll out the latest technological advancement without really considering market segmentation, and affordability & accessibility. However, with the introduction of 2G and devices now becoming more affordable, the company had to rethink the way it positioned its products and services. It noticed that pagers were still being used predominately by the youth and that its devices were more accessible. With more individuals connected to the network, specific challenges started to arise such as Signal storm, a term used to describe a situation where a high volume of signaling messages overwhelm the network infrastructure causing congestion and cause potential service disruptions. During this time, the company leveraged its partnerships with global vendors to ensure the proper infrastructure was in place to accommodate the increased volume of subscribers.

Post invasion, the country’s efforts purely focused on reversing the damage caused by the war. The Iraqi invasion created widespread human suffering, basic infrastructure was destroyed, oil production capacity was disrupted, and government and private sector assets were damaged. During the mid-1990s, Kuwait moved quickly to rebuild lost infrastructure. The company had to work in symbiosis with the government where it focused on the rehabilitation and recovery aspect of rebuilding damaged infrastructure. The urgency to rebuild and ensure the latest technology is deployed prepared the company to also ensure it is one step ahead. This positioned the company to respond to future crises in an innovative and agile way.

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