Zain highlights its ‘4Sight’ strategy and leadership in tower sharing
Zain participates in TowerXchange Meetup MENA event
KUWAIT: Zain Group, a leading mobile telecom innovator in seven markets across the Middle East and Africa, participated in the recently concluded TowerXchange Meetup MENA event where the company showcased best practices in managing Tower Infrastructure in a panel entitled ‘Finding value in passive infrastructure and delivering 5G’. Moreover, during the panel, Zain highlighted aspects of its ‘4Sight’ strategy that is focused on creating a Sustainable and Digital Future for the company and the region afar.
Commenting on the state of mobile tower arrangements in the region, Bader Al-Kharafi, Zain Vice-Chairman and Group CEO said: “Zain is a strong and early advocate for the extraction of value from our digital and passive infrastructure across our portfolio of markets. It makes sense to explore these opportunities as a long-term strategy of value creation, and as a company, it forms one of the strategic pillars - ‘Portfolio Optimization’ we are actively pursuing under our ‘4Sight’ strategy.”
Al-Kharafi also noted that, “Zain Group is at the forefront of mobile tower agreements in the region, having concluded the very first sale and leaseback of telecom towers by a licensed mobile operator in the Middle East region in February 2020.” The transaction saw Zain Kuwait transferring its passive physical infrastructure constituting a portfolio of 1,620 mobile towers in Kuwait to IHS Holding Limited for US$130 million (KD 40 million).
In the TowerXchange Meetup MENA panel discussion, Zain touched upon themes that included the operator’s immense success in rolling out 5G infrastructure in markets such as Kuwait, Saudi Arabia, and Bahrain, as well as providing insights on the most impactful strategies to derive the greatest value from a telco’s passive infrastructure.
Topics touched upon the progressive role that infrastructure sharing can play in reducing the total cost of network ownership for telcos, and whether the high CAPEX associated with 5G deployment necessitates the development of digital infrastructure companies or network as a service partners for effective rollout. The panel also tackled issues on the progression of 5G rollouts in the region and whether these investments are earning the desired returns; and how consumers, regulators or private networks will drive the next wave of 5G investment.
Kamil Hilali, Zain Group Chief Strategy Officer said, “Given the pace of digitization and the need for operators to continually reinvent themselves and seek new revenue streams, Zain believes in collaboration with a wide range of stakeholders to achieve this goal, including partnerships with competitors in certain markets and under certain conditions. We believe there is more to gain working together than in isolation, and we shall continue to seek opportunities to expand the tower ecosystem to every party’s benefit, particularly in light of additional 5G infrastructure investment.”
The benefits of infrastructure sharing are well understood by Zain Group, with the telco’s operation in Saudi Arabia together with fellow Saudi telco, Mobily, having announced plans to establish a consortium to acquire the telecom towers currently owned by the two entities and merge them under a new commercial entity, ‘Towers Company Saudi Arabia’.
To exploit the full potential of Zain’s infrastructure investments across its footprint, the Group plans to enter strategic partnerships with specialized tower operating entities with a focus on developing markets. With respect to its overarching strategy, Zain introduced ‘4Sight’ in 2019, centered on evolving the company’s core telecom business to maximize value and build on its many strengths through digitization, optimization and modernization to free up resources and to selectively invest in growth verticals beyond standard mobile services.
The strategic framework is divided into two interrelated themes (Evolution of Telco and Growth Verticals), each of which encompasses four strategic pillars that aim to diversify revenues, increase shareholder value, and generate sustainable growth for the communities that Zain serves and beyond. Moreover, the strategy aims to fully maximize Zain’s high-speed broadband networks, customer assets, network intelligence and payment and billing infrastructure.
‘Evolution of telco’ is premised on four pillars: Digital Transformation; Enterprise and Government; Fixed and Convergent Connectivity; and Portfolio Optimization, the last of which refers to Zain’s ongoing focus on establishing solutions based on greater collaboration with players within the industry to leverage shared resources. This encompasses the sale and lease back of its towers, allowing sharing of passive network infrastructure, which optimizes energy consumption.
The ‘Growth verticals’ aspect of ‘4Sight’ will see Zain go beyond the historical role of providing only telecom services and seek new opportunities in the lucrative ICT, Digital Infrastructure, Fintech and Digital Healthcare space. Innovation is part of Zain’s DNA, and historically it can be seen that over the decades, the company has always strived to bring the latest and best technologies to its markets as soon as practicable.
The execution of the ‘4Sight’ strategy in creating a Sustainable and Digital Future is on track and proving successful as evidenced by its resilient financial performances and other operational achievements in recent years, bolstering Zain’s vision of becoming a leading ICT and digital lifestyle provider and contributing to the region’s economic and technological evolution.