Zain aims for global dominance

Kuwait-based operator wants to join top ten companies by 2011

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By  Derek Francis Published  June 3, 2008

Zain Group CEO Dr Saad Al-Barrak has underlined the operator's ambition to become a major world player by 2011.

Speaking during his keynote address at the Arab Advisors Media & Telecoms Convergence Conference 2008 currently being held in Amman, Jordan, Al-Barrak said Zain was closely following its corporate strategy.

"We coined our vision ‘3x3x3' - which means we're going from being a regional company in the Middle East, then [three years later] to being a company in the Africa region. Then, we would like to be a global company," he told attendees.

"By the end of 2011, we want to join the top ten global companies, with 110 million customers," he added, while noting Zain is currently on track to achieve an EBITDA of $6 billion by 2011, up from $3 billion today. In terms of revenue, in 2002 the operator reported $459 million, compared to $7.5 billion in 2008.

In order to meet that objective, the operator has adopted a so-called ‘ACE' strategy - an acronym for a three-pronged approach of Accelerate, Consolidate and Expand. Al-Barrak also pointed to the acquisition of licences in Saudi Arabia and Iraq as particularly vital to Zain's future, given the significance of the countries in the regional market.

"For us, getting a licence in Iraq and Saudi Arabia was a matter of life and death for our future," he said.

Elsewhere, he stated the continuing potential of the emerging markets, despite the "gross assumptions" that have plagued the sector. According to him, as recently as 2005, industry perception was based on two major fallacies regarding the size of the addressable market and the equity of mobile calls in developing countries. For the latter, the lack of infrastructure is key.

"The equity of the telephone call plays to compensate for a lack in infrastructure to a big degree, hence people are willing to pay a bigger percentage of their disposable income for their calls," he explained.

Moving forward, he reiterated the importance of the growing segment of the youth population, calling the demographic crucial to finding success in the region.

"This is one area we want to leverage in tapping the emerging market. Look at the fertility rates of our region. The population of under 25s in Egypt and Saudi Arabia is around 60%, while in Japan it's 26% and in the U.S., it's around 35%.

"This [demographic] will come with totally different behavioural habits and a company that can address this in a comprehensive way will do well," he said.

Zain has 64 million customers worldwide and claims to be the fourth largest company in the world in terms of geographic footprint. With the launch of One Network - billed as the world's first borderless wireless network - its mobile subscribers across the Middle East and Africa can make seamless voice calls and SMSs, at local rates.

Several speakers at the Arab Advisors Conference have alluded to the One Network, taking the time to congratulate Al-Barrak and Zain for what is a "trend-setting" service.

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