Zain

ZAIN HOMEPAGE

BOARD OF DIRECTORS

BOARD OF DIRECTORS
MESSAGE

2018 AT A GLANCE

KEY MILESTONES

VICE CHAIRMAN & GROUP
CEO STATEMENT

GROUP KEY PERFORMANCE
INDICATORS

OPERATIONS OVERVIEW

A YEAR IN REVIEW

THE WORLD OF ZAIN

OPERATIONS SNAPSHOT

REGULATORY LANDSCAPE

OUR STRATEGY

TOGETHER WE ARE ZAIN

TECHNOLOGY

ZAIN DRONE

COMMERCIAL

CORPORATE
SUSTAINABILITY

ANNUAL CORPORATE
GOVERNANCE REPORT

CONSOLIDATED ANNUAL
FINANCIAL STATEMENTS
AND INDEPENDENT
AUDITOR'S REPORT

Table of Contents

العربية

Zain aims to be the data provider of choice and continues to transform itself into a comprehensive platform that enables customers to enjoy a truly digital lifestyle.

In 2018, we maintained our focus on delivering a world class customer experience by providing reliable, innovative products and services. We continued to invest in our networks and IT infrastructure to further expand coverage to meet the strong demand for data. As a result, Zain continues to see positive NPS trends across all our markets.

COMMERCIAL

ZAIN LIFE

In March 2018, Zain Kuwait announced the launch of Zain Life, a new brand that offers customers a portfolio of innovative and flexible digital services in the areas of Smart Homes, health, and wearables. Zain Life showcases our strategic vision of becoming a digital lifestyle brand, offering a comprehensive portfolio of solutions.

DATA MONETIZATION

To satisfy the huge appetite for data connectivity from both consumer and enterprise customers, and to differentiate our services from competition, we aim to provide the leading mobile data experience in all our markets.

We continue to see strong demand for data; driven by increasing smartphone penetration, the growing use of social media, 4G adoption, and use of video applications

During 2018, Zain witnessed a 71% growth in data revenues in comparison with the same period in the previous year. The contribution made by data revenues to overall gross revenues increased from 25% to 33% during the year.

A core pillar of our Group commercial strategy is our data monetization program, geared at delivering sustainable growth in data revenues.

The program is localized in each market via specific initiatives:

KUWAIT

2018 saw the introduction of a new home Internet solution, Beam, which uses the most advanced wireless broadband technology to provide a fiber-like experience.

IRAQ

The operation continued to invest in its data network by expanding coverage and increasing speed and delivering increased reliability and enhancing customer experience. We also enriched the value propositions for smartphones, resulting in a strong uptake from the residential segment. As a result, data traffic increased significantly. In parallel, we successfully implemented several data traffic optimization initiatives that resulted in cost savings in the provision of data services.

JORDAN

The operator’s 079 Program accelerated its data uplift efforts through the offer of targeted “much more for more” data add-ons. We also expanded our fiber network to reach more homes, resulting in ARPU uplifts for customers migrating from mobile data.

SUDAN

Zain Sudan launched a new flex service, TakTik, which consists of units that can be consumed as data, voice or SMS. Additionally, revamps were introduced for both large screen and small screen data value propositions, resulting in increased usage and revenues.

SAUDI ARABIA (KSA)

During 2018, Zain KSA launched fiber-to-the-home (FTTH) services, providing high-speed data to households. Additionally, the entire data portfolio was revamped with a strong focus on customer experience. Daily, weekly and monthly packages were offered for social media; and real-time consumption triggers were introduced to give customers increased control over their usage and spend.

BAHRAIN

Zain Bahrain continued to imporve the TDD-LTE network in 2018 offering high speed home connectivity.

CUSTOMER VALUE MANAGEMENT

We continue to invest in our value management strategies and systems. Our approach is to offer tailored propositions to customers that reward for both tenure and spend as well encouraging customers to try new products and services. We aim to unlock more value by offering relevant offers that are presented in a timely manner employing techniques such as real-time triggers and next-best activities.

KUWAIT

Zain Kuwait focused on enhancing the scope of value management through the introduction of new digital communications channels, driving significant incremental revenues in their market.

IRAQ

The operator’s unique micro segmented customer value management campaign called “Know Your Offer” (KYO - *100#) was very successful in attracting new customers as well as generating incremental revenues. Moreover, Zain Iraq launched Imtiyaz (privilege) as the first digital loyalty platform in the country, providing the most extensive telecom benefits - giving special discounts through over 400 partner locations.

JORDAN

Value management activities were targeted by Zain Jordan to uplift ARPU and increase customer lifetime value. These campaigns were extended to include segmented offers to increase tenure of prepaid customers, upgrade customers to fiber, and attract additional smartphone postpaid users.

SUDAN

Zain Sudan’s focus on segmented customer value management and value development activities resulted in an uplift in ARPUs and migration of customers to 4G.

SAUDI ARABIA (KSA)

Zain KSA implemented several operational enhancements including targeted, timely and tenure-based offers; and the development of an in-house contact strategy module to optimize the communication frequency with customers in each of the value segments. These enhancements facilitated numerous segmented customer value management campaigns including destination-specific international bundles, rollout of a retention matrix linked to value, and a dynamic recharge offering.

BAHRAIN

Zain Bahrain implemented a new campaign management system and launched several initiatives to increase the frequency of recharge, increase customer base activity levels, and uplift data revenues. In 2018, the operator partnered with a leading value-added services aggregator to offer the latest digital content, entertainment and infotainment services.

B2B

Zain continues to strengthen its positioning as the operatorof-choice for connectivity services to governments and companies of all sizes across the Middle East.

Our continuous focus on developing innovative value propositions and offering a superior customer experience to enterprise customers delivered strong revenue growth in 2018.

Zain is addressing the ICT needs of governments and companies with a comprehensive mobile, fixed, IoT, IT security and cloud portfolio; building end-to-end solutions.

Our recently introduced fixed portfolio is a strong revenue growth lever. Zain currently offers fixed solutions in Jordan, Kuwait, Saudi Arabia and Bahrain.

We continue to invest in our customer-facing staff and capabilities. In 2018 we expanded the key account manager teams, the Zain B2B shop-in-shop locations and after-sales care teams.

Zain B2B 2018 milestones included:

Roll-out of Zain Business brand across all Zain markets

Zain booth at GITEX to showcase Zain smart cities, cloud and drone solutions

Successful implementation of the MEW project in Kuwait to connect 880,000 smart meters to a central IT platform and billing system

Smart meter projects in Jordan, Iraq and Bahrain

Expansion of our fixed, data and voice, offers to reach all B2B segments

Launch of IT security services in Jordan

Launch of dedicated B2B care self-service app in Saudi Arabia

CUSTOMER EXPERIENCE

Zain has invested a significant amount on improving customer experience and as a result our customers now have access to more digital channels than ever, enjoying greater accessibility, simplicity and freedom to manage their accounts, buy new services, pay bills and send digital gifts to loved ones.

Zain Kuwait and Bahrain launched multiple digital channels in 2018, with an artificial intelligence (AI)-driven chatbot solution to offer our customers instant service and support via our website, mobile applications and Facebook messenger.

Zain Jordan celebrated a key milestone with one million downloads of its mobile application. A new digital indirect sales application and a new corporate digital sales tool were also launched, providing faster service management and improved productivity.

Zain Saudi Arabia achieved significant enhancements in its digital channels by simplifying the customer journey with respect to new payment options such as credit card installments, recurring payments, other online payments. In 2018, we relocated contact centers onshore in the Kingdom creating employment opportunities for Saudi nationals.

Zain Bahrain introduced E-Signature across its retail and indirect sales channels, which helped in enhancing customer effort scores (CES), reducing handling time by approximately 50% and directly benefiting the environment.

Zain Sudan introduced new customer-friendly digital channels like Whatsapp and e-payments. Focus was placed on training and upskilling front-end staff.

touch in Lebanon worked on improving the customer experience by opening new service centers as well as two new retail outlets in August 2018.

DIGITAL

PIONEERING NEW DIGITAL CONTENT AND SERVICES

2018 saw several first-to-market digital products and content service offerings from Zain across its footprint.

Zain markets intensified their focus on content offerings, as exclusive regional and international content was made available to our customers. Notably, in Kuwait we introduced an exclusive Amazon Prime Video offer – a first in the market, whilst Zain Iraq launched WAVO by OSN and a new music subscription service. iFlix continued to be rolled out in Zain’s markets, providing unlimited entertainment anytime, anywhere.

We also invested in developing children’s entertainment and education offerings with the introduction of several child-friendly interactive applications in Sudan, Iraq, and Lebanon.

It was also a rewarding year for Zain customers who love to play games in Kuwait, Saudi Arabia, Iraq, Jordan and Lebanon, as a series of new partnerships with DoCoMo Digital and Gameloft presented customers with a large selection of branded games. The introduction of enhanced direct carrier billing functionalities via our Zain Group API platform was a significant step forward in simplifying how customers pay for these and other services.

Zain Cash, the online payment solution that enables Zain customers to purchase products and services in Jordan and Iraq, grew revenues through sales of digital products including iTunes and Google Play cards whilst also increasing merchant payments. In a first, Zain Iraq linked MasterCard to its mobile wallet, allowing customers to purchase online as well as when they are travelling abroad.

Zain Iraq also started to offer insurance services, diversifying its digital services portfolio in partnership with GlobeMed, providing Zain customers with innovative life and accident insurance policies.

In Kuwait, Zain Smart Branch was launched, a first by a local operator. The service allows customers to experience a new way of interacting with Zain with the help of latest technology touch screen do it yourself interface. With the innovative feature of the facial recognition, the Smart Branch can easily and rapidly match the customer's face with the picture on the civil ID. It allows Zain customers to issue SIM replacements and new prepaid simcards on the spot, pay bills, recharge eeZee lines, and subscribe or unsubscribe to the wide range of services.

BRANDING AND ADVERTISING

THE IMPORTANCE OF OUR BRAND

First introduced in 2007, the Zain brand is our most valuable asset, and is at the heart of everything we do, driving our promise to our customers, and defining our vision and focus within the company. Through the collaborative efforts of Zain employees and partners, Zain continues to build its brand every day.

From what the brand does, to the way it is projected, Zain aims to deliver consistency and individuality across all brand touchpoints and assets. The Zain brand identity is considered unique, recognizable, memorable, and reflective of what is expected from a dynamic brand.

In 2017, Brand Finance, a leading global independent brand valuation consultancy (headquartered in London) ranked Zain as the second most powerful home-grown brand in the region, with a brand Strength Index score of 81.8 and a Brand Rating of A++. In 2018, Brand Finance recognized Zain as one of the top 300 most valuable telecom brands in the world, ranking it 62nd.

Today, the Zain brand is worth over USD 2 billion. This brand equity is driven by tangible developments occurring within the company across its different markets; from talent development, to customer-centric programs, heavy investments in our network upgrades, and technology innovations to positively impact our customer experience efforts.

A REFRESHED LOGO AND NEW BRAND POSITIONING – OPPORTUNITY

We launched our refreshed logo and brand positioning in September 2017, marking Zain brand’s 10th anniversary. The new brand positioning strategy and the refreshed brand were developed after conducting extensive quantitative brand trigger research and qualitative customer empathy research across our markets.

Our refreshed logo and brand elements reflect the dynamism of the world around us and Zain’s own digital lifestyle strategy aspirations. Our brand has been designed to appeal to customers who are living a progressive digital lifestyle.

In November 2018, we hosted a brand strategy workshop to engage our operations and their key creative partners in putting our new brand positioning strategy into action. The workshop was designed to start building the new and exciting Zain Opportunities platform together. Around 100 great ideas were generated covering a variety of areas, from social media and retail to Zain’s internal culture and new products and services. In 2019, we will see these ideas come to life.

The new brand positioning strategy – Opportunity – focuses on empowering customers and connecting them to the new opportunities the world offers, as they grow, share and enjoy life.

AWARDS

Since its introduction in 2007, the Zain brand has been awarded numerous accolades across the MENA region for its marketing campaigns and television commercials. In 2018, fifth consecutive year, Zain was crowned “Best Telecom Brand” by the Telecoms World Middle East Awards.

SOCIAL MEDIA

Zain’s effort across its footprint to highlight its brand and activities through social media contributes to increasing customer loyalty and attracting new customers. Given the nature of today’s digital world, it is particularly pleasing to see significant growth in customer advocacy – demonstrated by the number of fans, comments and views on all our social media channels.

Every year, the region’s Ramadan audience keenly awaits Zain’s annual Ramadan campaign. In 2018, Zain’s Ramadan television commercial reached over 20 million organic views on YouTube, while the Eid television commercial reached over 30 million views on YouTube.

By the end of 2018, Zain Group and its local operations reached 10 million fans on Facebook (11% annual increase), more than 6.6 million followers on Twitter, and 1.5 million on Instagram (25% annual increase). During 2018, the YouTube channels of Zain Group and its operations had a remarkable 216 million views, predominantly due to the success of various Ramadan campaigns and product service launches. In addition, Zain Group also saw an increase in followers with LinkedIn reaching 142,000 (30% annual increase).