Zain Saudi Arabia Sustainability Report 2010

Zain Saudi Arabia
Sustainability Report 2010

Zain Saudi Arabia Sustainability Report 2010
Zain Saudi Arabia Corporate Office
King Fahad Highway, PO Box 295814, Riyadh 11351
Kingdom of Saudi Arabia
Interact with us on:
Tel: +966 59 0000 959
csr@sa.zain.com
www.sa.zain.com A Wonderful World

Contents
2 CEO Message 46 Appendix A : Scope of the Report
4 Zain Saudi Arabia Corporate Profile 47 Appendix B : Acronyms
6 Our Stakeholders Appendix C : Glossary
8 Our Sustainability Framework 48 Appendix D : GRI Index
10 Our 2010 Sustainability Performance 49 Appendix E : RI Statement and
G
12 Delighting Customers GRI Application Level Check
18 Pioneering Networks
22 Creating a Dynamic Team
28 Building Partnerships
32 Developing Communities
36 Improving the Environment
40 Adopting Best Practice
44 Our 2011 Sustainability Commitments

Zain Saudi Arabia Corporate Office
King Fahad Highway, PO Box 295814, Riyadh 11351
Kingdom of Saudi Arabia
Interact with us on:
Tel: +966 59 0000 959
csr@sa.zain.com
www.sa.zain.com

At Zain Saudi Arabia we have made the commitment to implement sustainability
management and transparent reporting. With this baseline Sustainability Report
for 2010, we aim to open a constructive and engaging dialogue with all our
stakeholders on the subject of our sustainability ambitions, performance, and the
overall sustainable development of the Kingdom of Saudi Arabia.
This report sets out what sustainability means to us and presents our framework
and baseline performance since establishment, from an environmental, social
and economic perspective. Comparable data is provided for 2008, 2009 and
2010 as available.
This report has been prepared using the most internationally recognized and
comprehensive sustainability reporting guidelines – the Global Reporting
Initiative (GRI) G3.We have self-declared this report to have achieved a GRI
Level B, demonstrating the level of disclosure achieved. The GRI has checked
and approved our declaration level.
As one of our valued stakeholders, we hope that you will join our dialogue by
providing your comments on our sustainability webpage, or by contacting our
sustainability team at the Zain Saudi Arabia corporate office in Riyadh.

CEO Message

Integrity, Trust, Innovation
We believe that mobile communications is one of the most This baseline report is the first step to reaching a new level of management
transformative and enabling technologies of our lifetime. It holds vast excellence by embedding sustainability management into our core
potential to support, and in some cases accelerate, economic, social business operations. As a summary of our performance to date, this
and environmental development through the provision of unique report will provide a platform for annual reporting to you, our stakeholders,
solutions across all sectors of society. on the development and successful implementation of our sustainability
strategy and action plan.
With the world facing a new and shifting reality, the concept of
sustainable development is rapidly being identified as a new model I offer sincere gratitude to the Custodian of the Two Holy Mosques,
for long-term prosperity and growth. King Abdullah Bin Abdulaziz Al-Saud, HRH Prince Sultan Bin Abdulaziz
Al-Saud, HRH Prince Naif Bin Abdulaziz Al-Saud, and all Government
Zain has a unique opportunity in its early development as the third Ministers. Their enlightened leadership has made an invaluable
entrant to the Saudi market to help contribute to the sustainable contribution to the economic and social development of the Kingdom
development of the nation, in line with King Abdullah’s vision. of Saudi Arabia.
By driving market innovation, we hope to enable more people and Finally, I take this opportunity to praise the good work of all our
organizations to harness and benefit from the power of mobile employees and partners for the achievements of 2010. We hope you
telecommunications. With the ongoing fulfillment of our stakeholders’ enjoy this report and we look forward to engaging with you on its
expectations, and through continuous open communication, we aim to
content and delivery of our commitments.
demonstrate the highest levels of integrity and build a new level of trust
in the delivery of a better future.
For this reason, we view sustainability as synonymous with our brand
promise ‘A Wonderful World’. As we come to better understand the
needs of all our stakeholders, we will be able to deliver greater value
to them and build further value for our shareholders. Dr. Saad Al Barrak

2 | Zain Saudi Arabia

3 | Sustainability Report 2010

Corporate profile

Saudi Arabia’s Newest Operator
Saudi Arabia’s Telecommunications Market
Mobile Telecommunications Company Saudi Arabia
Saudi Arabia is the largest telecommunications market (Zain Saudi Arabia) launched its commercial operations
in the Gulf Cooperation Council (GCC) region, with
SR 52.5 billion total revenues in 2009, out of which on August 26, 2008, a year after it was awarded its license
up to 74% was attributable to mobile services. as the Kingdom’s third mobile voice and data operator.
SIM penetration as reported by the Communication
and Information Technology Commission (CITC) The company has been one of the most successful new
stood at 167% on 31st December 2010, with mobile
subscriptions increasing approximately 23% to 45.3 entrants in the global telecommunications market and
million in 2010. has developed a strong customer base against the
Mobile Service Market Growth
backdrop of a highly penetrated market.
(Subscriptions 2001-2010)
In 2010, Zain Saudi Arabia’s share capital consisted of
2010

2009
6.3 45.3 51.6 186
1.4 billion shares distributed amongst 10 organizations
6.1 38.7 44.8
2008 5.5 30.5 36.0
167
and a public shareholding of 630 million shares. Further
138
2007 4.8 23.6 28.4 113
details are available in the Zain Saudi Arabia Annual
2006 Financial Report on the website www.sa.zain.com.
2005

2004

2003

2002

2001 12

Pre-paid subscriptions Post-paid subscriptions
Total subscriptions Mobile penetration (%)

Source: Figures reported by mobile service providers


2007 2008 2008 2009 2010 2010
January August October December January December

Mobile Zain Over Over Commences Over
licence Saudi Arabia 1 million 5 million Largest LTE 8 million
awarded launches subscribers subscribers trail in the subscribers
region

Mission Zain Saudi Arabia in 2010
To become the telecommunications operator of choice in Saudi Arabia with an approach Market Voice SMS Broadband Multimedia SMS short
based on market segmentation and innovation. share Customers traffic messages subscribers downloads code requests
18% 8.3 million 9 billion 632 million 250,000 1.3 million 3.6 million
Vision
A Wonderful World. Our Economic Impact
Values Zain Saudi Arabia has achieved sustainable positive growth as evidence in the financial and
Radiance: leading the way with imagination and vision, bringing joy, color, and richness to our commercial indicators of 2010. However, the breakeven point is yet to be accomplished and
business environment. is expected to be achieved in the year 2014, demonstrating the long-term commitment and
continued investment in the Kingdom by the company’s shareholders.
Heart: living our lives with courage and resolve, engaging our spirit and touching emotions.
2009 2010
Belonging: leveraging the fellowship and community spirit that knows no territorial boundaries.
Revenue (USD) 801,080,533 1,582,498,667
Principles Benefits to employees (USD) 25,832,000 26,853,067
Zain Saudi Arabia has a clear set of ten principles upon which the business operates: Trust, Contribution to Governmental fee (USD) 54,493,600 157,015,200
Openness, Fairness, Quality, Speed, Devolution, Innovation, Tolerance, Leadership Nurturing Distribution to the community (USD) 1,951,629 5,083,461
and Teamwork.
Cost of revenue (USD) 567,206,933 907,712,533
Services
Zain Saudi Arabia offers a number of core telecommunications services to individuals, Association and Memberships
business and government. These include: Zain Saudi Arabia is a member of the Arab Sustainability Leadership Group (ASLG) – the
region’s foremost network of sustainability management and reporting leaders.
Voice, SMS and MMS – The foundation of mobile communications that can be accessed
through a mobile handset. Zain as a group has also joined and shown support for the:

Broadband – High-speed mobile broadband that can be accessed on a mobile handset, • GSMA Mobile Alliance Against Child Sexual Abuse Content
computer or any other internet enabled technology, through a USB dongle or Wi-Fi device. • GSMA Mobile Privacy Principles
Value Added Services – Such as mobile downloads (Islamic content, news, sports, music
and videos), mobile TV, ring-back tones and SMS short codes.


Our

Stakeholders
How We Approach Sustainability

Mapping out Zain Saudi Arabia’s stakeholders and
their expectations has informed our approach to
sustainability and development of a longer-term
sustainability strategy.


Stakeholders How we engage Stakeholders’ expectations
Customers • Call centre operators • Affordable prices and tariffs that also demonstrate Zain values
• 24/7 interactive Voice Response (IVR) • Nationwide coverage
• In-person shop assistants available during opening hours • Availability and high quality of network service
• Alternative communication channels including the website, social media, • Continued development and innovation in services including high speed internet
email, fax and SMS • Ease and clarity of billing
• Our online customer self service portal available 24/7 to all customers • Information security and data protection
• Fast and efficient complaint resolution and high quality customer care

Employees • ASK HR function and employee call center available during office hours • Stable and secure employment
• Employee self service section and intranet available 24/7 • Living the Zain values
• E-mail • Competitive remuneration package
• SMS • Ongoing training and development
• Post and Fax • Clear career progression
• Dynamic, safe and inclusive working environment

Business Partners • Contracts and agreements • Long-term, secure and financially rewarding contracts and relationships
• HR Business Partners (HR BP) program • Prompt payment upon delivery
• Quarterly engagement surveys

Community • Daily direct marketing • Digital inclusion, additional choice and innovation in the mobile marketplace
• Zain Saudi Arabia website: www.sa.zain.com • Increased competitiveness of the telecommunications sector
• Ongoing community investment programs (including Mashroee Zain • Integrity, trustworthiness and a growing economic contribution
and Shabab Tahmouh) • The health and safety of mobile technology, especially electromagnetic fields
• Sponsorship of sports and events • Little or no noise and visual pollution from mobile masts and base stations
• Investment in the local community

The Environment • Building and maintaining the network • Ongoing reductions of GHG emissions
• Energy, material, and resource consumption • Minimum use of finite resources
• Protection of ecological systems

Investors • Quarterly investor reports • Strong economic performance and return on investment
• Annual Financial Reports • Strong corporate governance and compliance with all rules and regulations
• Ongoing investor meetings and road shows • Ongoing demonstration of business and management excellence

Government and • Mandatory quarterly reporting • Ongoing sector development and innovation, advancing services to society
Regulatory Bodies • Ongoing sector meetings • An open, fair and competitive telecommunications sector
• Daily interaction with CITC and other government /regulatory representatives • Compliance with national laws


Our Sustainability

Framework
Our commitment to sustainability is based on three central outcomes: The three central outcomes are surrounded by seven sustainability focus areas, which
create the framework for reporting, as well as our internal sustainability strategy.
Integrity Delighting Customers
Holding true to our values and ethics as a company, Provide the most advanced platform, together with next generation mobile technology to
enable individual, business and government customers to live, conduct business, and provide
conducting business as a fair competitor that brings services in a secure and supportive environment, within Saudi Arabia and overseas.
choice, innovation, improved pricing and great quality
Pioneering Networks
to the market. Maintain and constantly develop our network, offering the most advanced technology to
customers across Saudi Arabia in a responsible and sustainable manner.
Trust
Creating a Dynamic Team
Building mutually beneficial relationships and confidence Be recognized as an employer of choice in Saudi Arabia through the creation of a dynamic,
vibrant, safe and engaging work environment that is aligned to the ten principles of Zain,
based on safe, responsible, reliable and on-time reflecting our corporate values.
operational performance, earning a high level of
Building Partnerships
trust from all our stakeholders. Create long-term business relationships that deliver mutual growth and prosperity based
on the Zain values.
Innovation
Developing Communities
Leading the deployment of innovative products and Harness the power of our products and services to create both direct and indirect positive
impacts on the communities we serve.
services that add significant value to individuals,
businesses and government alike. Improving the Environment
Reduce our own environmental impact, while providing advanced solutions to help
reduce our suppliers’ and customers’ impact, and the impact of the ICT sector as a whole,
by pioneering solutions for a low carbon society.

Adopting Best Practice
Conduct business in a responsible and transparent manner, holding ourselves accountable
to our investors and the wider group of stakeholders as a way of improving performance.


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Our 2010 Sustainability

Performance
Sustainability Management

The creation of this baseline report and development of an internal sustainability strategy has been driven by the
Corporate Social Responsibility (CSR) department within Zain Saudi Arabia. This will evolve in 2011 as we work to
embed sustainability management across the organization and further engage with stakeholders on the subject of
creating a more sustainable Saudi Arabia.
In 2011, Zain Saudi Arabia commits to the creation of a sustainability function that will work to implement the
sustainability strategy across all areas of the organization.
Delighting Customers (Key Perfomance Indicators) 2008 2009 2010
Number of customers 2,000,000 5,232,000 8,393,000
Number of mobile broadband customers – 91,000 250,000
Maximum speed of broadband (Mbps) – 7.2 14.4
Number of innovative M2M connections – – New Indicator
Mobile TV accessed – 328,330 337,005
Ring-back tones downloads – 1,045,876 1,288,503
Ring-back tones subscriptions – 1,100,345 2,234,639
Short code requests – 2,903,186 3,634,315
First call resolution (%) – 97% 98%

Pioneering Networks (Key Perfomance Indicators) 2008 2009 2010
Number of sites 1,590 2,480 3,367
Number of LTE enabled sites – – 300
CITC 3G population coverage obligation (%) 50.95% 61.07% 65.00%
3G population coverage (%) 59.30% 69.04% 71.45%
Number of sites shared 144 396 483
Number of reduced noise generators 500 900 1300


Creating a Dynamic Team (Key Perfomance Indicators) 2008 2009 2010
Number of employees 375 420 626
Employee engagement index (out of 5) – – 3.87
Employee turnover rate (%) 6.9% 12.6% 7.2%
Saudization rate (%) 56.6% 56.0% 61.3%
Average hours of training per employee 20 48 49
Female employment rate (%) – – New Indicator

Building Partnerships (Key Perfomance Indicators) 2008 2009 2010
Number of strategic business partners 10 11 12
Combined number of employees within strategic business partners 180 986 918
Strategic business partner employees somewhat engaged (%) (*Q4 of 2009, **Q2 of 2010) – 59%* 64%**

Developing Communities (Key Perfomance Indicators) 2008 2009 2010
Community investment expenditure (SAR) – 1,951,629 5,083,461
Number of CSR initiatives aligned to core services – – 2
Number of women involved in Mashroee Zain 10 33 40
Number of youth involved in Shabab Tamouh – – 36

Improving the Environment (Key Perfomance Indicators) 2008 2009 2010
Total electricity usage (KwH) – 70,647 87,891
Electricity per employee (KwH) – 172 140
Total water usage (liters) – 5,571,000 13,619,000
Water per employee (liters) – 13,588 21,756
Emissions from electricity usage (kg) – 57,648 71,719
Emissions per employee (kg) – 140 114
Mobile recharges through electronic methods (%) – 5% 22%
Customers using e–billing – – New Indicator

Adopting Best Practice (Key Perfomance Indicators) 2008 2009 2010
GRI level of sustainability report – – B
Sustainability report commitments achieved (%) – – New Indicator
Number of formal stakeholder sustainability engagements – – New Indicator


Delighting

Customers
Our Ambition: Provide the most advanced platform, together
with next generation mobile technology to enable individual,
business and government customers to live, conduct business,
and provide services in a secure and supportive environment,
within Saudi Arabia and overseas.
Customers
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Delighting Rapid Expansion (customer numbers)
Customers 2011 target 10 million
2010 8.3 million
2009 5.2 million
2008 2 million

Connecting People
Launch Package (1+1) Weekend Package
One month paid by the customer, Offers 2 Riyals for every Riyal The most powerful way to enable customers is through facilitating connections between
the next month paid by Zain. consumed over the weekend. individuals, families, friends and businesses in a tailored and cost-effective manner within
the Kingdom and internationally.

Greater Choice and Innovation for Consumers
Zain Time Package 10/10 Package As the third entrant to Saudi Arabia’s mobile voice and data market, Zain has adopted a strategy
35% discount during your favorite 10 Riyal day-long bonus credit to offer innovative and value-for-money packages that target previously underserved segments
time: morning, evening or night. if customer consumes 10 Riyals and to offer greater choice and value.
that day.
Leveraging extensive regional experience and significant brand value from its Saudi launch in
2008, Zain has offered many innovative packages for the first time in the Kingdom. The focus
Mazaya Package International Package on service innovation has helped the company to rapidly establish a solid base of customers
A post paid plan with Up to 50% permanent discount that continues to expand and achieve the corporate targets set for the next five years.
tailored benefits on two international numbers and
additional services. In 2011, Zain Saudi Arabia commits to launching five new innovative packages that increase
access to mobile telecommunications and enable more connections. These will include:
Zain Super – the only package offering customers their choice of discount on local and
international calling.
Toon Package – the only package introduced specifically for children ensuring use of mobile
telecommunications services in a safe and secure manner, with a full range of parental control.
It is the only line in the Kingdom to provide free Spacetoon content including videos, sounds,
ring tones and edutainment.

Roaming
Zain Saudi Arabia’s aim is to ensure customers are not only enabled within the Kingdom, but
overseas, allowing them to connect with family, friends, and do business while traveling. The
company has rapidly established international partnerships with over 440 operators world-wide
that ensure customers may use their mobile phones while traveling overseas to over 160 countries.
Zain also provides customers with a large range of in-air roaming options covering 11 airlines,
and counting, allowing them to remain in contact while flying.


Zain Add-ons This service allows businesses The range of add-ons currently includes:
to start with Zain’s competitive basic package, Business Private Network – for communicating between employees
customize it by selecting only the relevant Business to Business Private Network – for employees and five
add-ons and features according to their selected companies
business needs, adapted to their employees’ Global Advantage – 30% discount on international calls
use. This provides greater choice and helps Business Best – monthly commitment, no fees and free Global Advantage
companies to eliminate unnecessary costs. On-Net SMS – 350 texts for a low monthly fee

The ONE Network – World’s First Borderless Network New Smart Office Products in Association with Google
Launched in 2008, the ONE Network is the world’s first borderless mobile service, offering In 2011, Zain Saudi Arabia commits to launching a new smart office product for business
excellent rates without high roaming charges while traveling in any ONE Network country. customers offering a unique bundle of Google applications, voice, SMS, and mobile broadband.
Benefits include the facility to receive calls with the most attractive rates, make calls at local With this ‘office in a box’, business customers will gain all the functionality of Google Apps,
rates, recharge with local recharge cards, and call their home country’s Customer Care center together with the best prices from Zain increase productivity, collaboration, communication
free of charge. This excellent product is another way in which Zain enables customers to and effectiveness, while reducing IT and telecommunications costs. A regional first, this
connect across borders. Countries included are Jordan, Bahrain, Iraq, Sudan, Nigeria, Uganda, product is another illustration of Zain’s commitment to providing greater choice and innovation
Burkina Faso, the Republic of Congo, the Democratic Republic of Congo, Gabon, Chad, to the Saudi market.
Tanzania, Kenya, and Malawi.
M2M Innovation
Machine-to-Machine (M2M) data transfer services are growing rapidly in application and usage
Enabling Business and Government
as more and more hardware devices and software applications are developed worldwide. At
Zain Saudi Arabia provides solutions that enable businesses and government to perform and present, Zain Saudi Arabia offers data SIM Card Solutions for businesses to manage their fleet
innovate within their sectors. or team, track logistics and stock, conduct security surveillance, and conduct on-site data
collection.
Greater Choice and Innovation for Businesses
In line with its vision and values, the company provides a set of standard packages for business M2M data transfer has the potential to transform whole sectors – in particular the utilities
customers, and aims to build innovative, tailored and customizable solutions that suit the sector – with the emergence of smart grids, as well as the security, healthcare, government
needs of enterprises, of all sizes and in all sectors. and retail sectors.
Zain Saudi Arabia brought greater choice to the market by allowing business owners to benefit The emergence of M2M highlights the need for stakeholder collaboration for large-scale
from a range of features that include: sector-based innovations. In 2011, Zain Saudi Arabia commits to conduct a series of pilot
programs with organizations and government entities to develop new solutions for the way
• Dedicated customer care – business call center, service specialist and self-service portal.
we work, deliver education and healthcare, conduct commerce, and tackle climate change.
• The ONE Network – connection to the world’s first borderless network.
• BlackBerry – voice and data offers for BlackBerry users to help create a mobile office solution. The Power of Mobile Broadband
• Private numbering and short codes – private company numbering plans and short code The rapid development and deployment of wireless broadband technology is allowing more
dialing systems. people across the world to gain access to the internet, enabling them to connect, interact,
• Hybrid lines – post-paid and prepaid hybrid SIM cards. collaborate, engage, transact, be informed and inform in new and innovative ways through
• Cost control – spending limits, calling rates, split calls and ‘on your time features’. their mobile phones or other mobile internet devices.

Zain Gate
An innovative solution that helps businesses save up to 40% on their fixed-to-mobile calls.
Customers’ fixed-to-fixed calls are still carried by their fixed service provider, while fixed-to-mobile
calls are ‘converted’ into Zain mobile-to-mobile calls at a lower tariff. Zain Gate is helping
businesses reduce costs, while allowing Zain to access a proportion of the fixed market.


Mobile Broadband Content and Entertainment 2009 2010 2011 Target

1,000,000 Entertainment downloads 158,116 41,392 53,170
2011 Target
75 Mobile TV accessed 328,330 337,005 457,978
Ring-back tone downloads 1,045,876 1,288,503 2,670,704
250,000
2010 Ring-back tone subscriptions 1,100,345 2,234,639 2,508,174
14.4
Information channel subscriptions 77,378 158,288 155,319
91,000 Mobile broadband customers Short code requests 2,903,186 3,634,315 5,459,556
2009
7.2 Maximum speed of broadband (Mbps)

The Kingdom’s Broadband Potential Zain Delight
Broadband penetration in Saudi Arabia stood at around 16% of the population in 2010, with In 2011, Zain Saudi Arabia commits to launching Zain Delight, the world’s first mobile
broadband house penetration at 41.6%. Overall internet penetration is expected to reach 41% broadband prepaid internet service. Consumers will gain access to high-speed mobile
of the population by the end of 2010. (Source: CITC ICT Indicators in KSA 2010. www.citc.gov. broadband with no package expiry, no renewal charge, no monthly bills and no long-term
sa.) Wireless broadband has seen the greatest growth as the easiest, fastest and cheapest commitment – just internet charged per MB. This unique service will help bring mobile
technology to deploy, used on mobile phones, computers and through mobile broadband broadband to everyone, providing customers with unbeatable prices per MB, together with
devices such as USB dongles or 3G routers. freedom and control over their internet expenses.
It is predicted that the Kingdom will become a regional leader in the provision of mobile Pioneering Long Term Evolution (LTE)
broadband services, as mobile phone penetration exceeded 180% in 2010, and as operators Zain Saudi Arabia is conducting the largest LTE network trail in the world, with the aim of
compete to provide the fastest, widest reaching coverage in the Arab World’s largest country, creating one of the largest wireless broadband internet networks in the region with speeds
in terms of geographical size, with the largest population in the GCC region. of up to 100 Mbps. This initiative will help to rapidly increase internet penetration, while
providing more customers access to faster and more reliable wireless internet service. Further
Zain Saudi Arabia Mobile Broadband
information regarding our LTE ambitions is available in the ‘Pioneering Networks’ section on
Zain recognizes the power that mobile broadband has to enable customers, be they
page 22.
individuals, organizations or government. Mobile broadband will help revolutionize multiple
sectors such as entertainment, education, health and energy, while acting as a foundation
for rapidly growing business norms such as cloud computing and teleconferencing. More
Content and Entertainment
information regarding the company’s commitment to innovation is available in the ‘Enabling Zain offers a range of online content and entertainment that can be received or subscribed
Business and Government’ section on page 15. to by text message, downloaded online or downloaded directly through handsets.
For the individual, the company offers a range of value-for-money mobile broadband Content and entertainment is grouped into themes such as sport, children, religion, world, and
packages, as well as innovative mobile broadband devices such as USB dongles and Zain-Fi, lifestyle. It currently includes downloads (music, games, themes, wallpaper, greetings tones
enabling customers to access high speed internet on their mobile phones and computers and screen savers), mobile TV (news, series and movies), ring-back tones (download and
anywhere, without the need for an ADSL fixed line. subscription available), information channel subscriptions (news, events and information
directly to your handset), and short codes (text 2 TV, Facebook, Twitter, etc).
Zain-Fi – A Personal Wireless Broadband Network
Zain Saudi Arabia is the first operator to introduce the concept of pocket-sized devices that The company will continue to offer a wide range of unique and value-added content and
allow individuals to create a wireless broadband internet network anytime and anywhere, at entertainment. Also, in 2011, Zain Saudi Arabia commits to research the feasibility and
the cost of only one mobile subscription. A minimum of five people are able connect to the demand for ‘green’ content, raising environmental awareness and empowering people to take
internet simultaneously through the device, with speeds of up to 7.2 mega bits per second action on the environment.
(Mbps), providing easy access to broadband on the move.
As a major area of focus, Zain Saudi Arabia has made significant investments in its mobile
broadband network and services. This investment has yielded rapid growth in the number of
broadband subscribers in 2010, with forecasts for significant growth in 2011, helping to tackle
the Kingdom’s low internet penetration.


Call Center in Numbers 2008 2009 2010 2011 Target
Number of call center calls 19,055,851 77,821,434 86,163,039 –
Average speed of answer (sec) 106.00 52.25 50.42 30
First call resolution – 97% 98% 98%

Customer Care Information Security
Within a short period of time, the company built a reputation for high standards of customer Information security is one of the most important factors in building trust and demonstrating
care and a dedication to ensuring a positive Zain experience for every customer. integrity. To ensure the protection of data and information, the company has created an
Information Security Policy and ensures its enforcement on a day-to-day basis across the
Zain Saudi Arabia interacts with customers through traditional channels such as call centers
organization.
and shops. In 2010, the company also launched a range of alternative channels that proved
popular with customers. These include web (self-care portal, Facebook, YouTube, Twitter), SMS Information Security Policy
(balance enquiry, enquiry about complaints, increasing limit, etc), IVR (detailed bill, roaming Zain Saudi Arabia is committed to serve as a leading provider of telecommunications services
prices, increasing limit etc), and email. to its stakeholders inside and outside the Kingdom. The company approved its policy
statement to set a clear corporate direction and commitment to information security
In addition to these features, Zain’s Network Department has a customer care function that
throughout the organization, ensuring business continuity and customer satisfaction.
directly receives network-related complaints on coverage, quality and reliability. It also deals
with credit control and collection. Adding a human feel to this function ensures a seamless Zain is committed to continually ensuring that:
customer interface.
• confidentiality, integrity, and availability of information is secured and maintained
Call Center • regulatory and legislative requirements are met
The number of calls to Zain Saudi Arabia’s call center continues to rise, although at a decreasing
• Business Continuity Plans are produced, tested, and maintained
rate to the growth in customers. To ensure good customer service we continue to reduce
the time it takes for a call to be answered, hitting 50.42 seconds in 2010 with a target of • information security awareness is delivered to all staff
30 seconds in 2011. The percentage of questions and concerns raised by customers that are • any cases of information security breach is reported and investigated
directly resolved in the first call hit 98% in 2010.
The company will continually strive to review and improve the Information Security Policy on a
Web Selfcare Portal periodic basis. The policy is the responsibility of every member of the organization, including
This was launched in November 2009, enabling customers to manage their subscriptions contractors, suppliers, and service providers.
through the website. A study conducted at the beginning of 2009 showed that competitors’
web portals had too many features, without a proper focus on the user experience. Zain Saudi ISO Certification
Arabia decided to launch a portal with priority given to the most important services for Demonstrating the company’s commitment to the highest standards in internal and external
customers, focusing on a pleasant user experience. Feedback has been extremely positive and information system management and security, Zain Saudi Arabia has two ISO certifications:
we continue to develop the Selfcare portal, accommodating all the feedback and suggestions • ISO 27001 – Information Security Management System
received from customers.
• ISO 20000 – IT Service Management System
In 2011, Zain Saudi Arabia commits to gather and publish customer satisfaction results and
These international recognitions of our IT and information security management systems help
suggestions, together with our response and systematic management of customer feedback.
to ensure that customer data is kept safe and protected at all times.


Pioneering

Networks
Our Ambition: Maintain and constantly develop our network,
offering the most advanced technology to customers across
Saudi Arabia in a responsible and sustainable manner.
Customers
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Pioneering
Networks

Our Physical Network 2008 2009 2010 Physical Network
Total number of sites 1,590 2,480 3,367 During the first three years of operation, Zain Saudi Arabia’s focus has been the rapid
Number of 2G sites 1,590 2,480 3,367 deployment of a wide reaching and high quality network, covering the Arab region’s largest
Number of 3G sites 1,067 1,579 2,000 country. This challenge was compounded by an obligation to the regulator (CITC) on
Number of LTE sites New sites New sites 300 trials population coverage, a condition for receiving the Kingdom’s third mobile operator license.

Coverage 2008 2009 2010 This challenge was overcome in two ways: through the development of a comprehensive and
modern physical 2G, 3G and HSPA network that is easily scalable and upgradable, allowing for
CITC 2G population coverage obligation 63.89% 70.95% 80.30%
significant growth in the number of subscribers and ongoing evolution in mobile technology;
2G population coverage (%) 70.15% 83.10% 88.26%
and by pioneering the concept of site and infrastructure sharing in the Kingdom.
CITC 3G population coverage obligation (%) 50.95% 61.07% 65.00%
3G population coverage (%) 59.3% 69.04% 71.45% In 2010, Zain Saudi Arabia launched the world’s largest trial of Long Term Evolution (LTE)
technology capable of revolutionizing mobile broadband to deliver speeds of up to 150 Mbps
Reliability 2008 2009 2010 to handsets. With 300 LTE sites, commercial testing is due to begin as soon as the company
Radio availability (%) 98.4% 98.88% 99.21% receives approval from the regulator and the technology becomes widely available for use on
Drop call rate (%) 0.76% 0.63% 0.58% handsets and other mobile devices.

Site Sharing In Numbers 2008 2009 2010
In 2011, Zain Saudi Arabia commits to enhance our mobile broadband services with the introduction
of 3G voice and HSPA of up to 42 Mbps covering 11 cities. The company will also start working
Total number of shared sites 144 396 483
on a fiber optic network that will provide even faster and more reliable services in the future.
Shared sites – Zain on other operators 144 396 479
Shared sites – other operators on Zain 0 0 4 Coverage and Reliability
Noise and Visual Pollution 2008 2009 2010 In 2008 the company recognized that wide reaching coverage and a high quality network were
Number of sites with reduced noise generators 500 900 1300 integral to the successful launch of its services. Significant investments and innovative infrastructure
Number of ‘palm tree’ sites New sites 5 15 sharing partnerships were made to rapidly cover a large proportion of the population with high
quality mobile voice and broadband services.

Coverage
The virtual network covered more than 400 cities and 50 highways in 2010, exceeding all
population coverage obligations set by the CITC on both 2G and 3G services. This has been a
consistent achievement since launch, demonstrating the speed and commitment the company
has to develop its network.

Universal Coverage – Reaching Remote Areas
In 2010, Zain Saudi Arabia was awarded a contract from the CITC’s Universal Service Fund for
the provision of voice and internet services to remote areas in the Kingdom. This will involve
the roll out of over 500 new sites to bring coverage to remote areas not currently served by
any of the Kingdom’s three operators.


What is Infrastructure Sharing? Benefits include:
Infrastructure sharing can take a number of • reducing operators’ investment requirements by sharing network development costs
forms including site, network and spectrum • offering new sources of revenue for incumbent operators
sharing, national roaming and tower • shifting operators’ focus towards service innovation, instead of network deployment
companies. This is sometimes adopted by • increasing access by expanding to less dense areas and meeting Universal Service Obligations and targets
regulators to encourage competition and • reducing negative environmental impacts as a result of less network build-up
boost the performance of operators. • optimizing the use of scarce resources, particularly the right of way

Reliability Network Impact
To ensure the provision of a high quality service to all customers, the network features several
As the network continues to develop and grow, Zain Saudi Arabia is constantly looking at ways
levels of protection to ensure continuous and consistently high quality network service through
to reduce its impact on the local community, striving to reduce visual and noise pollution while
a wide variety of conditions.
maintaining high health and safety standards. For details regarding the environmental impact
Continuing investment in modern technology ensures an ever improving radio availability rate of our network, refer to the ‘Improving the Environment’ section on page 39.
and decreasing drop call rate, ensuring Zain Saudi Arabia comfortably outperforms the CITC
standards of 2% drop call rate. Electromagnetic Fields
Zain Saudi Arabia has encountered a handful of concerns from stakeholders regarding the
health and safety effects of its network with regards to Electromagnetic Fields (EMF). When the
Infrastructure Sharing
company receives a concern, it sends experts to conduct a dialogue, presenting reports and
In order to ensure the rapid deployment of a far-reaching network, the company adopted an findings from CITC and other international sources on the health and safety implications of
infrastructure sharing strategy with the two incumbent operators. This helped Zain to cover a mobile masts.
large proportion of the population as quickly as possible, at minimal cost, and minimized the
social and environmental impacts because the number of masts and base stations required to The company fully adheres to CITC standards relating to radiofrequency, which are compliant
serve the population was reduced. with the ICNIRP, 1998 standards on non-ionizing radiation, and with IEEE standards.
For more information regarding EMF issues visit www.emfexplained.info – a website
Site Sharing created by the GSM Association of Mobile Manufacturers Forum and the Australian Mobile
Zain Saudi Arabia pioneered the adoption of site sharing in 2008 and was the first in the Telecommunications Authority.
Kingdom to sign site-sharing agreements with the other two operators. After demonstrating
the benefits of site sharing, businesses, government and other large institutions requiring Health and Safety
mobile coverage requested that all three operators adopt a site-sharing policy for new The deployment and maintenance of our network is handled by a strategic business partner.
developments, ensuring just one base station mast is built instead of three. (Refer to the ‘Building Partnerships’ section on page 30 for further details.) Zain Saudi Arabia has
experienced zero fatalities or injuries related to the deployment and maintenance of the network.
(Source: Telecom Infrastructure Sharing, Regulatory Enablers and Economic Benefits. Booz
Allen Hamilton 2007. www.boozallen.com/media/file/Telecom_Infrastructure_Sharing.pdf) Zain Saudi Arabia recognizes its responsibility for the safe development and operation of its
network. In 2011, Zain Saudi Arabia commits to track the health and safety performance of
National Roaming business partners, providing guidance and tools that help to ensure zero fatalities.
Zain Saudi Arabia also signed numerous short-term national roaming agreements with other
operators. National Roaming, a form of infrastructure sharing, allows the company to use Reducing Visual and Noise Pollution
other operators’ networks for a fee, providing instant coverage and reducing upfront network Zain Saudi Arabia continues to minimize the visual and noise pollution from the sitting and
deployment investment. operation of base stations and masts.
To reduce noise pollution, the company has equipped a growing number of base stations with
reduced noise generators and continues to do so at new base station sites. To reduce visual
pollution, the company has begun converting towers into ‘palm tree’ sites, which will continue
in the future.


Creating a Dynamic

Team
Our Ambition: Be recognized as an employer of choice in
Saudi Arabia through the creation of a dynamic, vibrant, safe
and engaging work environment that is aligned to the ten
principles of Zain, reflecting our corporate values.
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Creating a
Dynamic Team

Full-time Employees by Level 2008 2009 2010 2011 Target
Senior management positions 15 15 32 37
Middle management positions 55 73 97 114
Team members 305 332 497 579
Total 375 420 626 730

Employee Turnover 2008 2009 2010 Living our Values
Total employee turnover 26 53 45 The Zain vision, values and culture are a major contributor to the attraction and retention of
Total employee turnover (%) 6.9% 12.6% 7.2% high quality talent. Zain is well known regionally for living its core brand values, which are
Turnover by level radiance, heart and belonging. These powerful brand values have helped to create demand
Senior management 3 6 3 to join Zain Saudi Arabia – in 2008, queues formed outside the corporate office in Riyadh
upon launch. Since then, the company has worked hard to live up to this brand promise by
Senior management (%) 20% 40% 9%
embedding the values, principles and culture of Zain across the organization.
Middle management 6 14 7
Middle management (%) 11% 19% 7% The Human Resources (HR) team of 27 employees handles a variety of functions aimed at
Team member turnover 17 33 35 effectively managing the company’s human capital, improving the effectiveness of individuals
and teams, and fostering a healthy and productive professional environment. Zain aims to
Team member turnover (%) 6% 10% 7%
establish optimum working conditions that provide all employees with the opportunity for
Turnover by gender personal and professional development and fair compensation, while working in an ethical,
Female turnover – – New indicator equitable, and dynamic environment.
Female turnover (%) – – New indicator
Zain Saudi Arabia’s HR work is governed by a range of clear manuals that detail HR policy and
Male turnover 26 53 45
procedures, all of which are aligned to the laws and regulations of Saudi Labor Law, and further
Male turnover (%) 6.9% 12.6% 7.2% developed based on the Zain values and principles. As a result, we have set ambitious targets
Turnover by age group in all areas, especially with regard to the employment of Saudi nationals. To aid this, Zain has
18-30 12 20 22 developed the HR Pioneer Program to build the capacity of nationals. This program is being
18-30 (%) 6% 11% 7% rolled out across the organization.
31-40 7 23 18 In addition, the HR Department oversees outsourcing activities and acts as an HR consultant
31-40 (%) 5% 12% 7% for other departments within Zain to support them in their strategy regarding contractors and
41-50 6 7 4 business partners. For further details, refer to the ‘Building Partnerships’ section on page 31.
41-50 (%) 20% 21% 8% The HR Department also handles governmental relations regarding labor laws and regulations,
registering expatriates, and deals with the travel requirements of Zain employees.
51-60 1 3 1
51-60 (%) 9% 27% 7%


Employee Engagement Survey Results (out of 5)
Employee engagement index 3.87 5
Job design 3.95 5 HR Innovation ASK HR is a function within the HR Department
Organizational health 3.42 5 responsible for responding to employee enquiries. It ensures
employees receive timely and accurate responses, providing live
Managerial excellence 3.59 5
responses, guidance and support. As a unique innovation the
Extrinsic rewards 3.19 5 ASK HR function also works to provide support to the employees
Workplace readiness 3.62 5 of our strategic business partners, as discussed on page 31.
Other drivers 3.63 5

Employee Profile Employee Turnover
In 2010, the workforce consisted of 626 full-time permanent contract employees, continuing Employee turnover is often a clear indicator of overall work environment and employee
its year-on-year growth since launch. Zain Saudi Arabia has no part-time temporary contract satisfaction. In 2010, our turnover rate stood at 7.2%, a reduction from 12.6% in 2009, making
employees or casual labor. However the company relies on a large amount of contracted labor us one of the top private sector performers in Saudi Arabia. Zain aims to continue reducing this
due to its outsourcing model. For further details regarding outsourced labor, refer to the figure to below 5%, while continuing to expand.
‘Building Partnerships’ section on page 31.
Remuneration and Benefits
Zain Saudi Arabia offers all employees highly competitive packages that reflect their level
Employee Engagement and Retention
of qualification and skill, and set well above the local minimum wage. Competitiveness is
As a way of ensuring employee engagement and satisfaction, the HR Department has put in maintained using ongoing market-based pay studies to ensure the company remains an
place a comprehensive range of two-way communications channels, measurement and tracking employer of choice.
systems and a clear open door policy between employees at all levels. The Human Resources
Contact Center (HR CC), part of the HR Shared Services organization, is designed to respond Benefits provided to full-time employees include:
to enquiries regarding HR policy and procedure. • airline tickets for expatriates
HR CC interacts with Zain employees via e-mail, the HR portal, web requests through the • holidays (including marriage, compassionate, exam, maternity and paternity)
intranet self service section, live chat, phone, SMS, fax and post. • handset allowances
Tracking Employee Engagement • mobile lines (data and voice) for employees and their families
Zain Saudi Arabia conducts an annual employee engagement survey that covers multiple • education allowances
elements of engagement and satisfaction including job design, organizational health,
• connect devices
managerial excellence, extrinsic rewards, workplace readiness and areas for improvement.
• medical insurance for employees and their families
In 2010, the results of the survey highlighted a number of areas for improvement, as well as
• subsidized gym membership
some successful employee engagement points. The Sales Department has a consistently
high engagement rating across multiple functions and drivers. Directors and managers also • all benefit plans as per the General Organization for Social Insurance (GOSI) and Labor laws
score highly on engagement. Areas that require the most attention include the Finance and • severance packages
Networks departments.
Results of these annual surveys are presented to senior management, as well as relevant
departmental managers, to ensure they take action to improve levels of employee
engagement and satisfaction.


Creating a
Dynamic Team 2008 2009 2010 2011 target Government mandated
Saudization rate for
communications sector
of 500-2,999 employees
56.6% 56.0% 61.3% 68.2%
Red 0-9%
Yellow 10-29%
Green 30-74%
Saudi nationals Expatriates Excellent 75%

Training 2008 2009 2010 Saudization
Total number of training (hours) 7,362 19,957 30,924 Zain Saudi Arabia recognizes the importance of the national policy to encourage the employment
of Saudi nationals. Saudization benefits the local and national economy, while bringing direct
Average hours of training per employee 20 48 49
value to Zain by harnessing local talent that understands the culture and market of the Kingdom.
Total cost of training as a % of OPEX 0.03% 0.08% 0.26%
Average cost of training per employee (SAR) 2,500 3,000 4,180 Demonstrating this priority, as part of the bid for the third mobile telecommunications license,
Average hours of training per employee by employee category Zain committed to achieve a Saudization rate of 81% by the year 2012, putting the company
into the ‘Excellent’ category as defined by the Ministry of Labor.
Senior managers 6 9 13
Middle management 3 5 6 In 2010, the company’s Saudization rate increased from 56% to 61.3%, demonstrating the
Team members 3 4 13 tangible results of a number of initiatives. However, it is recognized that more will need to be
done in order to accelerate the recruitment of nationals in order to reach the 81% target by 2012.
Diversity 2010 2011 Target
As the company enters its third year and the employee base settles, Zain hopes to target
Female N/A 9 fresh Saudi graduates as a major source of future employees, while promoting from within as
Female employment rate (%) N/A 1.23 experienced positions become available. As a result, all vacancies are advertised internally as
Male N/A 721 a first step. If a vacancy is not filled internally, then the position is advertised externally with
Female participation in management positions priority given to qualified Saudi applicants.
Females in middle management positions N/A 1
Females in senior management positions N/A 0 Development and Leadership
Ongoing training and development is the foundation of creating a dynamic, innovative and loyal
Age Diversification 2008 2009 2010 2011 Target
workforce. Zain Saudi Arabia invests heavily in the development of employees, ensuring that
Total workforce by age group (%) training programs contribute to employees’ personal and professional development. The overall
18-30 (%) 52 43.8 47.1 50.3 aim of the company’s training programs is to enhance capacity by providing the most advanced
31-40 (%) 37.07 45.5 42.7 41.1 leadership training, while investing in developing the next generation of Saudi leadership.
41-50 (%) 8 8.1 7.8 6.3 Development Needs Identification
51-60 (%) 2.93 2.6 2.4 2.3 Development needs are identified by line managers in collaboration with the HR Department,
with 100% of employees receiving regular performance and career development reviews as
Health and Safety 2008 2009 2010 2011 Target
of November 2010. The company’s target is to maintain this level as it continues to grow at a
Employee injuries 0 1 0 0 rapid pace.
Employee fatalities 0 0 0 0


Zain Saudi Arabia Sustainability Report 2010

Zain Saudi Arabia Sustainability Report 2010

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