Man of the year

Recent CommsMEA lifetime achievement winner Zain CEO Dr Saad Al Barrak on the firm's regional aspirations.

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By  Ronan Shields Published  October 3, 2007

Be First, Be Daring, Be Different". That's the motto that has guided Zain from its comparatively humble beginnings as a small regional player to a major contender on the international stage.

In the course of five years, Zain has expanded from a one-country operator to a cellular network giant whose geographic coverage spans the Middle East and Africa.

You have two choices as a human being: to be a subject of history or a maker of history. As a company we have chosen to belong to the second category.

Today Zain ranks as the fourth largest mobile operator in terms of geographic coverage (21 countries) and boasts a subscriber base exceeding 32 million.

Zain's capitalisation has multiplied more than 10 times since Al Barrak's appointment exceeding US$28 billion, as of August 2007, with revenues reaching $4167 billion and profits of $1051 billion by the end of 2006, a five-fold increase since 2003. The company is on track to achieve a 30% rise in profit this year compared to last.

"You have two choices as a human being: to be a subject of history or a maker of history. We have chosen to belong to the second category," states Al Barrak.

He attributes the company's impressive growth to the efforts of its entire management team. He says 2007 has been a landmark year in the company's history, particularly given the recent revelation that Zain will relocate the headquarters of its international operations unit to Bahrain.

Zain expects to complete this process by May 2008 with sources citing a restriction on investment as its main motivation.

"In Kuwait, certain parties tried to dramatise things and turn it into a national issue of companies leaving the country but that is not the case, if you look at our overall strategy it should put things back into perspective," declares Al Barrak.

He backs this argument by referencing Qtel's takeover of Kuwait's second mobile operator Wataniya. Al Barrak claims this move effectively meant that Wataniya's headquarters were now located in Doha.

Another significant development to take place this year was the company's decision to rebrand under the Zain banner.

"Zain brings together all our operations under a single, strong and unique identity. It will propel the group towards becoming one of the top ten global mobile telecommunications companies in the next four years," asserts Al Barrak.

MTC-Vodafone operations in Kuwait and Bahrain, Fastlink in Jordan, and Mobitel in Sudan have been rebranded Zain.

The company also plans to rebrand its Iraqi division, MTC Atheer, to Zain in the near future. In addition the group will launch operations under the Zain brand in Saudi Arabia early next year.

He also notes that the company's ambition of becoming the first global Arabic teleco is far from achieved.

"By 2011, we hope to achieve a $6 billion EBITDA and 70 million customers," he says.

"We now have a stake in what are easily the two largest Arab markets and both acquisitions were significant milestones in the implementation of our ACE strategy."

The company has spent in excess of $7 billion on acquisitions this year alone for concessions in Iraq and Saudi Arabia. However, this has led to a degree of confusion as to the source of the financing of the company's recent expansion drive.

"There is no specific loan to finance the Saudi Arabia deal; we have our conventional $4 billion facility plus additional Islamic financing facilities. Both our acquisitions this year have been resourced from our already declared facilities," says Al Barrak.

Al Barrak also reveals that Zain hopes to fund its massive investment in Saudi Arabia by raising $1.5 billion after its mandatory IPO, although he says that a decision as to when this might occur hinges on the country's telecommunications authorities.

Al Barrak notes that Zain's position as Iraq's leading mobile operator, with a subscriber base of 3.7 million, can largely be attributed to the company's massive early investment in the market.

"Inside the next two years, we hope to have six million customers in Iraq, this will require another $500 million worth of investment," he says.

Despite such massive investments in the region, Al Barrak says the company is not seriously considering acquisitions further afield at this point in time.

"Ideally we'd like to be in every UN country but at the moment we are focused on the Middle East, Africa and Asia. You can't be a true international brand unless you have a dominant presence in your nearest regional markets," he concludes.

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