Scott Gegenheimer Scott Gegenheimer

A customer-first attitude, a holistic approach to digital transformation and the courage to do things differently came together for Zain Group to be the proud winner of the ‘overall operator of the year’ at the CommsMEA Awards 2016.

As the traditional revenue streams for telecom operators continue to dry up gradually, and the industry landscape is disrupted with the onset of data era, survival and sustenance has become quite a challenge for telcos worldwide.

In these troublesome circumstances, the organisations that still manage to retain and grow their market position are the ones who dare to take risks and do things differently. Zain Group happens to be amongst those few telcos in the region which dared to take digitisation in its stride as an opportunity rather than a threat to its legacy model of structuring and operations.

Over the three decades of its existence, the company has managed to build its own niche in the MEA marketplace. Though the winds of digitisation haven’t really left the company unaffected, it has managed to prevent huge losses with a combination of futuristic strategies and a holistic analysis of its existing infrastructure, business model, solutions and services. For the first nine months of 2016, Zain Group generated consolidated revenues of KD 826 million ($2.7 billion), down 3% YoY in KD terms, while consolidated EBITDA for the period reached KD 390 million ($1.3 billion), up 5% YoY, reflecting a healthy EBITDA margin of 47.2%. Consolidated net income reached KD 124 million ($413 million), reflecting a 5% YoY increase. Earnings per share amounted to KD 0.032 ($ 0.11) for the nine-month period. The results have been good especially considering the fact that in Iraq, continued civil instability and implementation of a 20% sales tax on mobile services, as well as wide-ranging tax increases on other sectors affect spending on mobile services, seriously impacting Zain Iraq’s operational results and consequently the Group’s overall key financial metrics.

Ahead of the digital curve

In order to retain its relevance with the changing times, the Group has devised a wise strategy so as to focus primarily on six areas. These are customer experience; cost optimisation; talent development; Zain Digital Frontier and Innovation (ZDFI); customer value management and enterprise.

So, which have been the biggest investments by Zain in terms of technology? In response, Scott Gegenheimer, the group CEO highlights the roll out of LTE in six markets (most recently 4G in Sudan and Jordan), investment in LTE Advanced in key markets such as Kuwait and KSA; and the introduction of a Big Data platform in Kuwait, Bahrain, and Jordan.

In full recognition of the enormous potential of new revenue streams coming from the digital space in the future, especially in the domains of M2M, IoT and smart cities, the company established the Zain Digital Frontier and Innovation [ZDFI] business unit in 2014 to launch Zain into the digital space. The unit focuses on innovation, digital services, corporate venturing and smart cities, with the ultimate aim of transforming Zain into a regional innovation trendsetter. Partnerships with Uber, Zeptolab and booking.com are exemplary of Zain’s strategy to offer innovative services to its customers and bring new business models to its markets.

Zain Group has further made a strategic investment in FOO, a successful Lebanon-based entity offering a full spectrum of innovative end-to-end mobility related services including digital strategic consultancy, user interface and experience (UI- UX) design, app and web development solutions, digital marketing and incubation of start-ups.

To make sure it doesn’t lag behind on the smart city revolution, the group has entered into a strategic collaboration with neXgen Group, a leading smart city advisory and consulting services provider. Zain has already identified substantial incremental revenue opportunities from the investment in smart city deployments in the Gulf region, and the strategic cooperation with neXgen Group will initially focus on smart city opportunities in key Zain operating markets. Zain Group CEO, Scott Gegenheimer believes that the pairing of Zain’s regional footprint and expertise as a communications provider with neXgen’s competence in smart city technology and services will fast-track Zain’s development and success in smart city revolution.