Zain’s gains are from investment in 4G, 5G and ESG
The Zain Group says its latest healthy growth across the Middle East is down to investment in three very different G forces: 4G, 5G and ESG. The first two built its infrastructure, while its environmental, social and governance (ESG), which has been recognised by regulators and consumers, have won the public’s trust.
The Zain Group’s financial results for the six months to June 30, 2022 show it served 51.7 million customers at the end of the period, a 7.1% increase year-on-year, with revenue at $2.7 billion.
The group’s key performance indicators, in Kuwait Dinar (K) and US Dollar ($) for the first six months (H1) of 2022 were revenues of KD 829 million ($ 2.7 billion), EBITDA of KD 320 million ($1.1 billion) with an EBITDA margin of 39%. The net income was KD98 million ($321 million). The figures for consolidated revenue of KD829 million ($2.7 billion), showed an increase of 10% year on year. The net income of KD 98 million ($ 321 million) was up 14%.
Group Chairman Mr Ahmed Al Tahous said the growth was down to: “good environmental, social and governance practices, diligent investments in 4G and 5G network upgrades and expansion and seeking new lucrative business verticals to drive growth.”
Over the six months, The Zain Group’s investments focused predominantly on expansion of its fibre-to-the-home (FTTH) infrastructure, spectrum fees, 4G upgrades and new network sites across its markets. There have been 5G rollouts in Kuwait, the Kingdom of Saudi Arabia (KSA) and Bahrain.
Zain Kuwait was the world’s first telecom operator to launch voice over 5G with nationwide coverage. It also completed the first live trial in the region for 4G/5G Open RAN and a Cloud Native Radio Access Network (cRAN). ZainTech, the Zain Group enterprise (B2B) arm, is growing at 21% year on year. Dizlee, the Zain Group application programme interface (API), is used in 26 digital partnerships, offering 51 live services, resulting in 5.5 million transactions per month and a 34% growth in revenue. Zain Esports and Zain KSA launched the Playhera MENA gaming tournament platform for the Middle East and North Africa, which targeted the region’s lucrative gaming market 100 million gamers.
The Zain Group won ‘Best Telco Operator’ and ZainTech scooped the ‘Best Digital Service’ category at the 2022 Telecom World Middle East Awards. Zain was also recognised with the World Finance Best Corporate Governance Award 2022 for Kuwait.
“We are delighted that our state-of-the-art technologies and services have enhanced our customer and revenue share across our markets,” said Mr. Bader Al-Kharafi, Zain Vice-Chairman and Group CEO. “The 5G network of our flagship operation in Kuwait is the driving force of profitable government and enterprise revenue, resulting in an 11% increase for all key financial indicators. The 5G network and data monetisation initiatives in both Saudi Arabia and Bahrain are driving growth on multiple levels. In Iraq, Jordan and Sudan, the operations are monetising their 4G networks profitably and we look forward to launching 5G services in those markets in the future, upon receipt of regulatory approvals.”
Zain recently applied for a digital banking license in Kuwait with Boubyan Bank in a bid to become a telco-led challenger bank in Kuwait. It is keen to capitalise on its fintech expertise, given its successes with Tamam in Saudi Arabia, Zain Cash in Iraq and Jordan and MGurush in South Sudan.
“Our all-digital-only operators Yaqoot in Saudi and oodi in Iraq both deliver healthy growth, through a simple mobile experience for customers all through an app,” said Al-Kharafi.
Highlights of Zain Goup’s performance in each region include Kuwait, where its customer base grew by 9% to 2.6 million customers and profits rose by 11% to reach KD173 million ($567 million). Zain has the largest 5G customer and revenue market share in the country.
In Saudi Arabia, where its revenue grew 14% to $1.2 billion, the operator’s 5G network now covers over 50 cities. In Iraq grew revenue grew 4% to $390 million. In Sudan revenue soared by 30% to reach $208 million with an EBITDA margin of 51%. Data revenue grew by 44% representing 31% of total revenue and the customers base now stands at 16.3million, maintaining its market leadership position.
In Jordan revenue grew 2% annually to reach $250 million. The continued expansion of FTTH and 4G services across the country should improve earnings from its current custom base of 3.7 million customers (up 4%) maintaining its market leadership. In Bahrain revenue grew by 3% to reach $89 million.