‘Drive2011’: Zain restructures global operations to reach growth targets

Bahrain: May 4, 2009

• Vital phase of 3x3x3 vision will see company increase focus on customer facing services to improve operating margins
  
• Centralizing and outsourcing will see workforce streamlined by 13%
  

At a strategic meeting with senior Zain executives from all 22 African and Middle East operations, Zain Group CEO Dr Saad Al Barrak announced a new program to propel the company towards its 2011 target of being a top ten global mobile telecommunications operator. ‘Drive2011’ will focus on customer facing services and commercial activities while centralizing or outsourcing some back office/non-core functions to strategic partners.

This program, which comes at a vital stage of the company’s 3x3x3 vision that commenced in 2003, will maximize economies of scale and realize significant efficiencies, allowing Zain to provide communication services such as voice, SMS and data at an optimum cost structure. Drive2011 is expected to improve Zain’s operating margin by 5% within 12 months and provide the company the necessary thrust to capture the future growth potential of the markets in which it operates.

The Zain Group will align its head office and operations structures in accordance with the new operating model. This will result in Zain reducing its current 15,500 global workforce by 2,000 - a 13% reduction across the board. Zain operations in Iraq, Jordan, Kenya, Kuwait, Malawi and Sierra Leone have already begun the process.

“Drive2011 is a natural consequence of Zain’s evolutionary journey. It was planned soon after the launch of our ACE strategy in 2007 and is a structured and timetabled approach to maximizing efficiency,” declared Dr Al Barrak. “We will create genuine market differentiation through our services and deliver on our Zain brand promise of ‘A wonderful world’. This will be achieved through a combination of managed outsourcing, centralization and leveraging capabilities, as well as training and development for our personnel, all of which will improve our operating efficiencies.”

In a move aimed at tackling the challenges ahead and attaining other 2011 targets of 150 million customers and a US$6 billion EBITDA, Dr Al Barrak also announced several senior management changes at both Group and country operation level.

Drive2011 comes hot on the heels of a string of firsts for Zain, particularly the groundbreaking mobile commerce solution, launched in East Africa in February 2009, and which has already attracted several hundred thousand customers. The service is operational in Kenya and Tanzania and will shortly be launched in Uganda before being rolled out across all Zain operations. The service is the most comprehensive mobile banking solution in the world, offering among other things, access to full banking services, the ability to pay utility bills, including electricity, money transfer services, and the facility to buy airtime top -up. It has also proved popular with major international companies drawn its cost-effective and efficient way of paying vendors across these two vast countries.

Finally, Zain Create, the popular music and video download service, launched in partnership with Rotana, has proved an instant hit among the youth segment. Currently available to Zain customers in Kuwait and Sudan, it will eventually be rolled-out across all operations.