Digitalization, innovation and diversification underline Zain’s success
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The Business Year (TBY) talks to Vice Chairman & CEO of Zain Group, Bader N. Al-Kharafi about the company he leads and the successes it has achieved over the years in providing cutting-edge digital technologies and innovative solutions. The wide-ranging talks also cover Zain’s plans to forge ahead by bringing digital lifestyle communications to people and providing meaningful connectivity that empowers societies.
Zain Group reported a 10 percent increase in both revenues and profits in the year ending 2023. What were the key factors driving this growth, and how do you foresee these shaping Zain’s strategy in the coming years?
Our ongoing success and progress are rooted in our 4Sight corporate strategy, which embraces digital transformation, innovation, and diversification by entering new business verticals across our footprint. Our group-wide efforts in monetizing innovative digital services and enterprise solutions on the back of our fiber, 4G, and 5G state-of-the-art networks and technologies, combined with cost optimization initiatives and pioneering passive tower infrastructure sale and leaseback strategy, drove strong operational and financial performance for the year. We will continue to build on these solid grounds as a leading provider of innovative technologies and digital lifestyle communications and deliver meaningful connectivity that creates systemic change and empowers the societies we serve and beyond.
How has the shift toward 5G impacted Zain’s business operations, and how do you see it driving innovation and data revenue growth in the fintech and digital content services in the regions where Zain operates?
We are a pioneer in 5G services in the region, having been the first operator to commercialize the technology in Kuwait back in 2019. Since then, we have gone on to launch 5G in Saudi Arabia, Bahrain, and Jordan, and our leading-edge technology supports the revenue growth and expansion of our enterprise, digital, fintech, and other customer appealing services across these markets. Throughout 2023, Zain invested nearly USD1 billion, representing 16 percent of revenue, in CAPEX, mainly on network rollouts and spectrum license fees that bolstered group wide annual data revenue growth of 8 percent to reach USD2.4 billion and powered enterprise revenue growth of 20 percent. Fintech wise, our customers grew 40 percent and revenues grew 195 percent while digital services group-wide, including the Dizlee API platform, witnessed revenue growth of 9 percent. We will continue to innovate and foster these lucrative areas and focus on enhancing the customer experience.
Can you elaborate on Zain’s fintech aspirations in Kuwait and across the region?
We are keen to foster innovations within the fintech space and continue to innovate and expand mobile financial services across our operating markets, providing much needed services to the communities we serve and driving financial inclusion while contributing to the evolution of the region’s digital ecosystem. In 2023, group-wide, we saw total transaction volume tripling to USD 11 billion in fintech. Early in 2024, we launched the Bede fintech brand in Bahrain, which is set to be rolled out across our footprint. Bede stems from the Arabic meaning of ‘in my hand’. The operation aims to allow everything to be powered in the palm of one’s hand, catering to consumers’ lifestyles and emerging demands beyond basic telecom services. The impressive and profitable growth of TAMAM in Saudi Arabia, and ZainCash in Iraq and Jordan has firmly established these fintech entities as market leaders for the unbanked and underbanked in their respective markets. We will continue to foster their growth through innovation.
What partnerships and deals is Zain pursuing, and how do these align with the company’s overall growth objectives?
The company has pursued a series of acquisitions to deepen and widen its portfolio of cutting-edge and comprehensive products and solutions, cementing its position as the regional powerhouse for enterprise digital technology, advisory, and implementation. Three strategic acquisitions were completed during 2023, namely STS, Adfolks and BIOS that are success stories among the region’s dynamic ICT sector, as well as entering multiple partnerships that sees Zain offering services including Cloud, Cybersecurity, IoT, AI, Big Data, Smart Cities, Drones, Robotics, and other emerging technologies. Today, ZainTECH and our operations have partnered with an expansive list of the world’s leading technology innovators paving the way to becoming the digital transformation partner of choice for governments and enterprises across our markets, especially Kuwait, Saudi Arabia, the UAE, and beyond.
Zain’s commitment to ESG has been highlighted in various reports. How does this commitment shape Zain’s business decisions and operations, and what are the future goals in this area?
Zain’s corporate sustainability strategy is aligned to the basic premise that connectivity is a fundamental human right. It is part of the ethos of the organization that further pushes the company to ensure that its business decisions are just and inclusive. Zain has consistently gone above and beyond the compliance requirements. The business is run with a strong sense of values and ethics, carried out across all business operations.
More specifically, from a human rights perspective we are committed to addressing our salient human rights that include labor and children rights, public safety, customers rights to privacy, and digital inclusion. As a result of our commitment to human rights, our business decisions incorporate relevant human rights risks. The company continues to expand and scale its mechanisms and processes across all markets to address human rights impacts by ensuring its suppliers align to supplier code of conduct and human rights policy statement, complete Zain’s training material specifically tailored for suppliers, fulfill Zain’s suppliers’ self-assessment questionnaire, and complete a physical audit for high-risk suppliers.
In addition, the company continues to make concerted efforts to upskill its suppliers so that they can implement best practices. Zain is also a member of the GSMA Mobile Alliance Against Digital Child Sexual Exploitation, and in 2023 the company also became a member of the UN Global Compact initiative, a voluntary leadership platform for the development, implementation, and disclosure of responsible business practices. Its future goals in the area of human rights is to continue to work on the integration of human rights impact assessments for mergers and acquisitions and further develop the criteria of its human rights practices.
Zain was recently named Best Workplaces for Women in the region by a reputable ranking organization. What is the company doing in regard to gender equality?
Women are an integral part of the Zain success story. From increasing leadership positions, a revolutionary HR policy and other innovative talent development programs, Zain’s focus of integrating women fully into all aspects of the business is proving to be an enormous benefit to the culture and productivity of the company. Zain is proud of the serious stance taken on Diversity, Equity and Inclusion activities, and this award recognizes not only the impact on just women, but the impact on all the talented 8,000 people Zain employs. Our gender diversity women empowerment (WE) pillar was established in 2017, when only 14.5 percent of Zain’s leadership comprised of women, and a target was set to increase this percentage of women leadership to 25 percent by 2025. Today, three Zain operations have already achieved the WE leadership targets, Zain Kuwait at 26.9 percent, UAE based ZainTECH at 27.0 percent, and Zain Jordan at 27.3 percent.
