Together Forward Annual Report 2011

Transcription

1 Together Forward Annual Report

2 Reports and Consolidated Financial Statements for the year ended 31 December 167 million Aggregate Subscribers 32.2 AED billion Revenue 10.4 AED billion Operating Profit before Federal Royalty 5.8 AED billion Net Profit 4.3 AED billion CAPEX 60 fils Dividend per share Table of contents: 1. Business Overview 2. Chairman Statement 3. Board of Directors and Executive Committee 4. Chief Executive Officer Statement 5. Operational Highlights 6. Management Review Group Commercial Initiatives Etisalat UAE International Operations Network Etisalat Services Holding Human Capital 7. Corporate Governance 8. Independent auditors report to the shareholders 9. Consolidated income statement 10. Consolidated statement of comprehensive income 11. Consolidated statement of financial position 12. Consolidated statement of changes in equity 13. Consolidated statement of cash flows 14. Notes to the consolidated financial statements 15. Notice of General Annual Shareholders Meeting Head Office: Etisalat Building Intersection of Zayed The 1st Street and Sheikh Rashid Bin Saeed Al Maktoum Street P.O. Box 3838 Abu Dhabi, UAE Telephone: Fax: Telex: ETCHO EM etisalat.ae Regional Offices: Abu Dhabi, Dubai, Northern Emirates 2

3

4 Business Overview Awards - Corporate Awards - Innovation and Engineering 2006 Comms MEA Awards Best Operator 2006 IT Weekly Awards Best ICT Services Company 2007 Best Overall Operator Network News Innovation Awards Best New Technology Telecom World Middle East Awards 2007 Best Operator Windows User Middle East Awards Best ISP 2008 World Communications Awards Best International Carrier Genesys Customer Innovation Awards Customer Innovation Award 2009 Arabian Business Achievement Awards TM Forum Awards Best Middle East Telecommunications Company Best Mobile Operator 2009 SAMENA Telecommunications Council Best Quality of Services Operator of the Year Best FTTx/GPON Operator of the Year International Business Awards Best Multinational Company - Middle East & Africa Telecoms World Middle East Awards Best Value Added Service SAMENA Telecommunications Council Best Telecom Company MENASA Comms MEA Awards Most Innovative Non-Voice Service Telecom World Middle East Awards Best Operator Best FMC Operator of the Year Middle East Business Leaders Summit Arab Achievement Awards International Leader in Telecommunications Sector Asia & Africa Leader in Telecoms SAMENA Awards Comms MEA Awards Best Customer Experience Provider of the Year Fixed Line Operator of the year International Business Awards Most Innovative Company Global Telecom Business Innovation Awards Video Services African Investor of the Year Africa Business Awards TMT Finance Middle East Best Broadband Provider Asia Brand Employer Awards Training Excellence COMMS MEA Best Fixed Line Provider SAMENA Awards Technical Leadership 3 4

5 Business Overview continued Awards - Marketing and Customer Care Awards - Management Design Week Benchmark Awards Best Brand - Telecoms Sector Abu Dhabi Economic Forum, Al Iktissad Wal Amal 2006 Comms MEA Awards Best Customer Care CEO Middle East Awards 2008 Lifetime Achievement Award 2007 CEO Middle East Awards Award for CSR Telecom World Middle East Awards Middle East Excellence Awards Institute Best Customer Care Provider Comms MEA Awards 2008 Telecom World Middle East Awards Best Brand Finance Asia Awards Best India Deal Superbrand Council Superbrand 2009 Middle East Excellence Awards Institute Middle East Business Global Competitiveness Excellence Award Middle East Excellence Awards Institute Best Customer Care Provider Best Telecom Operator Leader Award SAMENA 2009 Time Out Dubai Best Customer Care Middle East Excellence Awards Institute CEO of the Year IT & Telecoms CSR Awards Best Community Programme Middle East Business Leaders Summit Lifetime Achievement Award Honorable mention Green Company International Business Awards World Communications Awards Best CEO Middle East Business Leaders Summit Leadership in Corporate Social Responsibility Best Chairman CMO Asia Awards Best Telecoms Brand International Business Awards Honorable Mention - Best CFO 2006 Comms MEA Awards Best Operator Honorable Mention - Best Executive Shortlisted - World Communications Awards Social Contribution International Business Awards Best Chairman Best Customer Care International Business Awards Honourable Mention - Green and CSR Programme Asian Brand Employer Awards Asia s Most Preferred Brand 5 6

6 Business Overview continued Awards - Carrier and Wholesale Business snapshot Capacity Awards Telecom World Middle East Awards Capacity Awards Best Wholesale Provider MENA Etisalat is a multinational, blue-chip organisation with operations in 17 countries across the Middle East, Africa and Asia. An estimated 2 million people benefit from regular work supplying Etisalat or its customers, including 53,000 who are directly employed by the company. Etisalat now has access to a population of more than eight hundred million people, and its satellite network provides services over two thirds of the planet s surface. Etisalat s international acquisition programme began in earnest in 2004 by winning the second mobile license, and the first 3G license in Saudi Arabia. Since then the company has witnessed rapid expansion positioning Etisalat as one of the world s fastest growing operators, with its subscriber numbers rocketing from 4 million in 2004 to 167 million at the end of. For nearly 40 years, Etisalat has helped the UAE sustain a position as the region s hub for business, trade and foreign investment by providing reliable and high quality services. It is one of the global telecommunication industry s innovation pacesetters - powering its home country into the Top 10 nations list by providing the latest technologies first. Etisalat is a pioneer in next-generation networks for both fixed line and wireless and is in the process of deploying a nationwide fibre optic system in the UAE that includes enough cable to stretch to the moon and back - two and a half times. Etisalat is also in the process of launching 4G mobile services in the UAE, and today operates the Middle East s largest LTE network. Presently Etisalat offers both the Middle East s fastest fixed line broadband service with speeds of up to 30Mbps to the home, and the highest speed mobile broadband connectivity. This technological expertise has helped Etisalat capture significant market share as it expands across the region, most notably in Egypt and Saudi Arabia where the introduction of mobile broadband services, including video call and mobile TV, has changed market dynamics and provided affordable internet access for millions. Etisalat is pioneering several advanced green technologies and is a regional leader in providing environmentally friendly information and communication solutions. This includes smart building technologies, the latest Machine-to-Machine (M2M) solutions. and the deployment of alternative power within its regional networks. Etisalat is also ensuring that its infrastructure meets the highest international standards, and its nationwide fibre optic network in the UAE is expected to reduce carbon emissions and energy consumption by over 80% and 70% respectively. Etisalat is committed to the principles of corporate social responsibility and is partnering with many governments and non-government organisations to increase access to education and health care via technology. Etisalat is well-known for its support of people with special needs. It is a shortlisted finalist in the Global Mobile Awards for its visual contact centre service which uses 3G technology and sign language to provide support to the hearing impaired. As a result, Etisalat has been named Best Overall Operator in the Middle East 10 times since 2006, and was named Best International Carrier at the World Communications Awards in It has won numerous accolades for its innovative marketing, having been awarded for Best Brand, Best Customer Service and Best CSR Programme. Etisalat s management team is also well-celebrated with its Chairman, Mohammad Omran, receiving the top accolades in, at both the International Business Awards and the World Communications Awards. 7 8

7 Business Overview continued Timeline - History of Etisalat Emirates Telecommunications Corporation launches the Middle East s first mobile network. Etisalat establishes the Etisalat University College to create a talent pool of engineers to drive its future growth. The Middle East s first GSM service is introduced in the UAE. Etisalat also launches Emirates Data Clearing House, now one of the world s leading clearing houses - providing a complete solution to GSM operators to provide roaming facilities to their customers in turn. Etisalat becomes one of the founding investors in satellite telecommunications provider, Thuraya. Etisalat s mobile subscribers exceed 800,000. The Middle East s first broadband Internet service using the latest ADSL technologies is introduced. Etisalat buys a stake in Tanzanian operator Zantel, its first step towards becoming a major international telecoms group. 1 million new customers are added in the year, bringing the total number of subscribers for Etisalat s UAE operations to 3 million. Etisalat launches the Middle East s first 3G network, and offers MMS services to its customers. Subscribers exceed 4.5 million, which equates to mobile penetration exceeding 100% for the first time. Internet adoption is also on the increase and 51% of households have access. Etisalat acquires a stake and takes management control of PTCL, the incumbent operator in Pakistan. Etisalat expands into West Africa by taking a stake in Atlantique Telecom whose operations in Benin, Burkina Faso, the Central African Republic, Gabon, Ivory Coast, Togo, and Niger catapult Etisalat s participatory markets into double figures. Etisalat acquires a stake in a green-field operator in Nigeria, the largest and fastest growing market in Africa. It also invests in Excelcomindo, one of the leading mobile service providers in Indonesia. UAE mobile subscribers exceed 6.7 million and internet penetration crosses the 60% mark. Etisalat introduces mobile TV and officially launches its wholesale business unit as The Smart Hub for the Middle East. Etisalat achieves 500,000 broadband subscribers, and mobile subscribers in the UAE exceed 7.2 million. Etisalat offers the iphone across the UAE and Saudi Arabia, for the first time. Etisalat acquires Tigo, a Sri Lankan operator, which is later rebranded to Etisalat Lanka. Etisalat introduces the first real 4G (LTE) experience to its customers in the UAE The Emirates Telecommunication Corporation is founded. The ownership structure changes: The United Arab Emirates government gets a 60% share in the corporation and the remaining 40% is publicly traded. The UAE central government issues Federal Law No. 1, which gives the corporation the right to provide wired and wireless telecommunications services in the country, and between UAE and other countries. Internet services are rolled out across the country, another first in the region. Etisalat opens its SIM card factory, Ebtikar, in Ajman - now regarded as one of the best industrial organisations in the UAE and a leading provider of smart card solutions. e-marine is founded to provide maintenance and services to the growing number of international telecommunications cables passing through the Gulf. Mobile subscribers exceed the 1 million mark as mobile data services is introduced using ewap. Etisalat introduces the E-Vision brand for its cable TV services. Etisalat Academy is established to provide professional and technical training. Etisalat subscribers reach 2 million. It develops its mobile network to offer GPRS. Etisalat wins the second license to operate in Saudi Arabia thereby introducing Etihad Etisalat Mobily. It also buys a stake in Canar, a new fixed line operator in Sudan. Etisalat wins the third mobile license in Egypt and plans to introduce the country s first 3G network. It is also awarded a license to provide mobile services in Afghanistan. In the UAE, Etisalat begins offering BlackBerry services. Etisalat Services Holding is formed to manage eight business units that offer mission-critical telecoms related services to the industry. This includes EDCH, e-marine, Ebtikar, Etisalat Academy, E-Facility Management, e-real Estate, Etisalat Directory Services and Tamdeed. Etisalat successfully takes a stake in Swan Telecom, which is later renamed Etisalat DB. Etisalat completes the rollout of a nationwide fibre optic backbone over which next generation services will be provided in the UAE. Etisalat is named Largest Carrier in the Middle East in the Financial Times Top 500 list. Etisalat deploys new services across its fibre network including 3DTV, making the UAE one of the first five countries in the world to offer this service. Etisalat UAE starts offering faster mobile broadband speeds using HSPA+, and announces commercial trials of LTE. 9 10

8 Chairman s Statement I am pleased to present the performance results of the Emirates Telecommunications Corporation Etisalat for the past year. The following is a summary of results for the year ended 31 December, : Aggregate subscribers, including subsidiaries and associates, grew annually by 22% to exceed 165 million by December ; Consolidated revenue increased 1% to reach AED 32.2 billion; Operating profit before Federal Royalty decreased 29% to AED 10.4 billion including a one-off impairment on Indian operation; Operating profit before Federal Royalty amounts to AED 13.5 billion, representing a decrease of 8% from ; Net profit after Federal Royalty decreased 23% to AED 5.8 billion, an EPS of 74 fils; Excluding the one-off impairment on Indian operation, net profit after Federal Royalty amounts to AED 6.9 billion and an EPS of 87 fils, representing a decrease of 10% from ; Net cash position of AED 3.3 billion, composed of AED 10.0 billion in cash and AED 6.7 billion in borrowings; Capital expenditure of AED 4.3 billion, representing 13% of the consolidated revenue; Reported earnings for the year were noticeably impacted by the Supreme Court of India s recent decision to cancel 122 licenses including that of our Indian subsidiary Etisalat DB. Although our investment in India took place long after these licenses were issued, we reflected a loss for impairment in our year-end results, in line with International Financial Reporting Standards (IFRS). In the meantime, Etisalat continues to assess the legal consequences of the Supreme Court s decision and Etisalat s strategic options in India. Notwithstanding this critical matter, Etisalat s overall financial results show a steadily increasing revenue base from its diverse portfolio of operations. Excluding the impact of impairment, operating profits before federal royalty - although down from last year - remained robust at a margin of 42%. In addition, the Corporation maintained its historically strong cash position, allowing it to reaffirm its investment-grade credit ratings in their annual review. In light of these results, and in line with the policy of several years, the Board has proposed dividends of 60 fils per share, a payout of 81% of earnings per share. Operating margins have witnessed strain due to a rebalancing of contributions from Etisalat s geographic and service portfolios. Traditional growth in mobile voice operations in the domestic market has tapered due to market saturation and competitive pressures. The Corporation has countered this challenge by focusing on terminal resale to lock in customers over extended periods of time - positively impacting both immediate and future revenues. In spite of the impact of the developments in India on this year s financial results, Etisalat s growth value today remains primarily derived from emergent international operations, as well as domestic data services. Etisalat has been quick to take advantage of this trend by prudently investing in its overseas networks, and in the UAE s broadband infrastructure, with a focus on enhancing network capacity for the increasing demand for data usage. Etisalat allocated AED 1.8 billion - more than 40% of its capital expenditure - to its UAE operations in. As one of the UAE s key institutions, Etisalat has an unwavering commitment to provide a state-of-the-art related telecommunications network to the citizens of the UAE. We strongly believe that the excellence of the communications network directly correlates to the economic growth and prosperity of the country. Etisalat now lays claim to the complementary combination of a high-speed fiber backbone and an LTE mobile network, providing reliable connectivity up to the last mile between base station and customer. The advanced network will allow us to reliably provide innovative services such as near field communication (NFC), money transfer facilities, and machine-to-machine (M2M), which are made possible through cloud computing. The UAE is thus primed to become a data centre hub offering such services domestically and abroad. We participated in in a national dialogue to define the vision for the next-generation ICT industry in the UAE, and put forward a recommendation on the required enablers. This vision aims to position ICT as a key driver of socioeconomic development and regional competitiveness by effectively addressing prevailing market and industry trends and capturing stakeholders aspirations. The dialogue addressed a range of key policies and initiatives, including e-government, e-literacy, and national network security. We firmly believe in the impact of ICT in accelerating economic growth, stimulating economic and social innovation, enhancing efficiency across all facets of our society and economy, encouraging new fields of collaboration, and simply improving everyday s lives. In fact, the enactment of such a vision could double the contribution of ICT to the UAE economy over the next five years. From a broader viewpoint, we continue to believe in the latent demand and potential of the telecommunications industry. It is expected that the world s population will reach 7.2 billion by There will be roughly the same number of connected devices in use, many of which will be non-voice, as well as more than 50 billion machines that can be connected. Experts predict that this will drive demand for mobile data up to 26 times its current levels. If we take the example of Etisalat Misr, the levels of mobile data usage were negligible when Etisalat launched in Egypt in Today, only four years later, Etisalat Misr s network carries more than 30 terabytes per day, which we estimate to be half the total market share. Four years from today - at this rate of growth - Etisalat will require a more advanced network with larger capacity to handle higher levels of usage. As a result, Etisalat will continue a similar level of investment over the next five years to handle increasing demand for mobile data, in the UAE, and across its international operations. The Corporation is also engaged in discussions with over-the-top (OTT) players to develop new business models where all players can participate evenly, and benefit from the network investments. The telecommunication industry is constantly evolving - transforming economies, businesses, communities, and the way in which people live, work, and play. Our ongoing mission is to bring the future of communications to the most dynamic regions in the world, no matter how challenging or demanding. As you are well aware, the Middle East has witnessed turbulent political upheavals during the past year. The turmoil has had both direct and indirect impact on risk in the regions where we operate. In this regard, Etisalat is fortunate to be anchored within the resilient and secure economy of the UAE, and to own a diverse international portfolio across 17 markets, that will cushion against any potential impact of such events. Nevertheless, we are hopeful that the current situation will be a precursor to a new era of greater stability and prosperity in the region. Last but not least, I would like to emphasise that Etisalat is a home for remarkable people. Our strategy to attract the best talent has paid off, and it will help realise our objective of becoming one of the world s leading telecommunications companies. We owe our success to the talented teams who focus on delivering next-generation of services to transform the lives of the people on our world-class networks. I would like to extend my sincere thanks to all of Etisalat s staff for their dedication and ingenuity. Sincerely, Mohammed Hassan Omran Chairman 11 12

9 Board of Directors and Executive Committee H.E. Mohammad Hassan Omran Chairman Chairman Executive Committee H.E. Omar Saif Mohammad Al Huraiz Member H.E. Khalaf Bin Ahmed Al Otaiba Vice Chairman H.E. Ahmad Bin Eisa Bin Nasser Alserkal Member Member Executive Committee H.E. Mubarak Rashed Al Mansouri Member Member Executive Committee H.E. Abdul Rahman Hassan Al Rostomani Member H.E. Hamad Mohammad Al Hurr Al Suweidi Member H.E. Abdulla Mohammad Saeed Ghobash Member H.E. Sheikh Ahmed Mohammad Sultan Bin Suroor Al Dhaheri Member Member Executive Committee H.E. Shoaib Mir Hashim Khoory Member Member Executive Committee H.E. Saeed Mohamed Al Sharid Member Mr. Hassan Osman Sid Ahmed Acting Corporation Secretary 13 14

10 Chief Executive Officer s Statement It gives me great pleasure to review with you the financial and operational results of the Emirates Telecommunications Corporation, Etisalat. This strategy translates into a cross-functional portfolio of tactical objectives that will involve the entire organisation, with an aim to increase revenues and optimise costs in existing business activities, while capturing growth potential that has not yet been leveraged through our Group. Success of the initiatives will also be measured through improvement in operational metrics pertaining to quality of services, customer experience and market positioning. The programme includes but is not limited to deployment of a Group talent management programme, consolidation of purchasing to lower total procurement spend, establishment of M-Commerce across operations, an aligned brand portfolio strategy, and capturing international wholesale synergies from consolidation. The programme will be supported through a holistic knowledge management strategy across the Group. The year also saw a transition into our new Group operating model, involving changes to organisation, governance, and processes. Management is well aware that the organisational structure has a direct impact on many aspects of daily business, and that change will be necessary to cope effectively with the dynamic nature of our markets. This organisational change will include the creation of several new Group functions, with the purpose of bringing together related departments under one umbrella to streamline processes. On a regional level, two new operating clusters - Asia and Africa have been created to manage our international operations more effectively. These regional and functional consolidations within the Group aim to align business activities and improve cross-functional support, in order to achieve the available synergies of the advantageous scale of Etisalat s operations. Our operations demonstrated growth in terms of both size and revenue, reaching more customers and attracting higher revenues across our international operations. The aggregate subscribers, including subsidiaries and associates, reached over 165 million. Group revenues increased by 1% to reach AED 32.2 billion, driven by growth in our international operations that now contribute more than 26% of consolidated revenue. Excluding the one-off impairment of our Indian investment following the cancellation of our subsidiary s licenses, our operating profit margin before Federal Royalty came in at 42%, compared to 46% in. Etisalat achieved a net profit before Federal Royalty, excluding impairment of Indian investment of AED 13.7 billion. Net profit after Federal Royalty, excluding impairment of Indian investment, amounted to AED 6.9 billion and EPS of 87 fils, compared to AED 7.6 billion and 97 fils in. Meanwhile, capital expenditure decreased by 27% to reach AED 4.3 billion, representing 13% of the current year s revenues. In the UAE, our operations witnessed further competitive pressure, especially in the mobile segment where revenues declined by 3% to AED 23.5 billion. While loss of market share in a two-player market was inevitable as an incumbent operator, we have retained a dominant share of revenues due in large part to the loyalty of Etisalat s higher revenue-generating customers, based on the superior services and quality of the network. We were also notably able to achieve a healthy gain in our mobile subscriber base during the final quarter of the year, thanks to continuing efforts to revamp of our sales channels and the focus on value proposition in our latest mobile offerings. We have also witnessed strong growth in the data and internet segments. Their combined revenues have grown 20% to reach AED 8.0 billion, contributing 34% of total UAE revenues. To capitalise on this trend, the Corporation spent AED 1.8 billion during the year on infrastructure, mainly to enhance the fiber-optic network and develop the LTE core and access network. This investment was highlighted by the launch of the first real 4G (LTE) experience to our customers in the UAE through Etisalat s new LTE USB modem. Etisalat has deployed nearly 1,000 base stations and its current LTE footprint spans major cities covering 70% of the population. We plan to continue ensuring that our customers have access to the most advanced technology available in the world, through a segmented approach that considers particular needs of different demographic and business sectors. Etisalat has a huge potential for growth at a global level, and this remains one of our key objectives. Our operations abroad achieved AED 8.5 billion in revenues during, registering a healthy growth of 17% and validating the anticipated potential of our international investment portfolio. International revenues for the year accounted for 26% of consolidated Group revenues, led by the solid performance of Etisalat Misr and Atlantique Telecom. On the operating profit level, before impairment, international operations delivered an increasing share to group results, although margins from these operations are expectedly lower than our home market due to the lower customer ARPU (average revenue per user) nature of these markets. In addition, these operations are still in the build up stage. Our associate operations, most notably Etihad Etisalat Mobily in the Kingdom of Saudi Arabia, also delivered healthy results. In total, they contributed AED 1.2 billion to the Corporation s net profit before Federal Royalty. Looking ahead, Etisalat has embarked on the execution phase of its new ENGAGE strategy, comprising six strategic pillars: Enrich customer experience Nurture advanced technologies Govern decisively Achieve broadband leadership Grow with sustainable portfolio Excel in execution In line with the programme, Etisalat signed a Strategic Partnership Agreement with Telefonica to collaborate on a range of key areas that harness their capabilities and expertise. Under the terms of the agreement, we will establish mechanisms to draw on each operator s experience in various strategic areas, including collaboration on technological standardisation, new global technology initiatives, R&D, and new emerging products and services designed to capture digital growth opportunities such as M2M, financial services or cloud-based services. We will also cooperate on procurement, international capacity and wholesale services, as well as offer enhanced support for multinational customers by taking advantage of the benefits of the Telefonica Partners Program. Etisalat also initiated five global framework agreements to enable significant savings and technical alignments across the organisation, and finalised a global managed network services (GMNS) agreement with two major vendors to consolidate network maintenance and repairs in its global operations. These agreements, along with aggressive cost optimisation initiatives in several operations launched during the year, are anticipated to yield considerable savings over the next few years. Respectfully yours, Ahmad Abdulkarim Julfar Group Chief Executive Officer Lastly, as you are aware, our operational footprint has been impacted following the Supreme Court of India s decision in February 2012 to cancel all 122 of the 2008 spectrum licenses granted to 8 operators, including the 15 licenses initially granted to Swan Telecom (Etisalat DB). The Supreme Court decision relates to events that occurred in 2007 and culminated in January 2008 with the issuing of the 122 licenses, well before Etisalat started looking at investing in one of the new licensees in year Etisalat eventually invested in Swan Telecom in December Etisalat DB is conscious of the impact of the judgement on EDB s customers, employees and vendors; as is Etisalat in respect of its shareholders. We are currently fully engaged along with Etisalat s senior management to safeguard the Corporation s investments. I am honoured to lead the Group into the next stage, and I look forward to working with our teams and partners to build on the remarkable success and achievements throughout the countries in which we operate

11 Operational Highlights Subscribers Etisalat s global subscriber base (subsidiaries and associates) grew by 23% for the year, reaching 167 million subscribers by year-end. Total UAE subscribers remained stable at 10.3 million, while international operations drove subscriber growth, most notably in Etisalat Misr in Egypt, which witnessed 40% growth. FY 10 FY 11 FY 10 Global Subscribers (m) CAPEX (AED b) FY 11 CAPEX CAPEX decreased by 27% to AED 4.3 billion. Capex in UAE in was at a slower phase compared to mainly due to the FTTH roll-out in. CAPEX in international operations also impacted by political unrest in Egypt as well as uncertainties in India. Consolidated CAPEX represents 13.3% of consolidated revenues in compared to 18.5% in. Revenues Impairment Charge Recognised in India 31.9 FY 10 Revenue (AED b) 32.2 FY 11 Consolidated revenues increased by 1% to AED 32.2 billion. In the UAE, revenue growth was driven by the Internet and Data segments which combined grew by 20% to AED 8.0 billion. Despite overall UAE revenues decline by 3%, this was offset by 17% growth in revenues from international operations. International operations contributed 26% of consolidated revenues, mainly led by Etisalat Misr in Egypt and Atlantique Telecom in West Africa. On February 2, 2012 the Supreme Court of India canceled 122 2G licenses issued in Eight operators are impacted by the ruling, and some reputable international operators are among the affected ones. Etisalat, which has partial ownership in Etisalat DB, is among these operators. In accordance with International Financial Reporting Standards (IFRS), Etisalat Management decided to recognize an impairment charge in consolidated financial statements amounting to an aggregate of AED 3,044 million before Federal Royalty against the full carrying value of goodwill; amounting to AED 1,227 million; and the net assets including licenses of its Indian operations. The net impact of this charge on our consolidated net profit after Federal Royalty amounts to AED 1,020 million. Profit and Loss Summary 16.6 FY 10 EBITDA (AED b) 15.9 FY 11 EBITDA EBITDA decreased by 4% to AED 15.9 billion in mainly due to increase in selling, marketing and transformation expenses. EBITDA margin decreased by 2.6 pts to 49.3%. Despite 5.5 pts decline in the EBITDA margin in UAE, this was partially offset by significant improvement in the EBITDA contribution of international operations. (AED m) FY 10 FY 11 YoY Revenue 31,929 32,242 +1% EBITDA 16,561 15,882-12% EBITDA Margin 52% 49% -3pp Net Profit 7,631 5,839-23% Net Profit Margin 24% 18% -6pp Balance Sheet Summary Net Profit and EPS Net Profit decreased by 24% to AED 5.8 billion mainly due to 4% decline in EBITDA as well as negative impact of impairment charge recognized in India. Normalized Net Profit, before the impairment charge, amounts to AED 6.9 billion representing a yearon-year decrease of 10%. (AED m) FY 10 FY 11 Cash & Cash Equivalents 10,277 9,972 Total Assets 75,607 72,892 Total Debt 6,400 6,696 Net Cash 3,877 3,276 Total Equity 42,565 41,704 FY 10 Net Profit (AED b) EPS (fils) FY 11 EPS decreased to 74 fils/share of which 60 fils/share will be distributed as dividend to our shareholders subject to the approval at the AGM

12 Operational Highlights continued Cash flow Summary (AED m) FY 10 FY 11 Operating 7,807 7,481 Investing (4,853) (2,552) Financing (4,372) (5,387) Net change in cash (1,418) (459) Reconciliation of Non-IFRS Financial Measurements We believe that EBITDA is a measurement commonly used by companies, analysts and investors in the telecommunications industry, which enhances the understanding of our cash generation ability and liquidity position, and assists in the evaluation of our capacity to meet our financial obligations. We also use EBITDA as an internal measurement tool and, accordingly, we believe that the presentation of EBITDA provides useful and relevant information to analysts and investors. Our EBITDA definition includes revenue, staff costs, direct cost of sales, regulatory expenses, operating lease rentals, repairs and maintenance, general financial expenses, and other operating expenses. EBITDA is not a measure of financial performance under IFRS, and should not be construed as a substitute for net earnings (loss) as a measure of performance or cash flow from operations as a measure of liquidity. The following table provides a reconciliation of EBITDA, which is a non-ifrs financial measurement, to Operating Profit before Federal Royalty, which we believe is the most directly comparable financial measurement calculated and presented in accordance with IFRS. AED m FY10 FY11 EBITDA 16,561 15,882 Depreciation & Amortization (2,985) (3,388) Exchange gain/(loss) (192) (216) Share of Associates and JVs results 1,243 1,208 Impairment - (3,044) Operating Profit Before Federal Royalty 14,627 10,

13 Management Review Group Commercial Initiatives Etisalat introduced the commercial rollout of a globally interoperable, open-loop, mobile commerce ecosystem across its operations in, and will continue making this service suitable for emerging markets. The fully interoperable open-loop service offering is the first implementation of an affordable NFC service in the world, the first GSMA compliant NFC service in Africa, and the first fully interoperable NFC service in the Middle East. It can be integrated with all national payment gateways and global MNOs, and has 33 million acceptance locations around the world. Etisalat now enables customers to use their mobile phones as a payment instrument - anytime and anywhere - without geographical borders. The highly secure environment is available at all merchant locations that are globally supported by MasterCard, and through various local and regional payment networks. The service is offered across all interfaces including online, NFC, STK and secured IVR. Etisalat Group signed a mutual agreement with Mobily in, under the terms of which Etisalat will provide Mobily with live TV channels with EPG and VoD pushed through fibre optic cables, from existing content platforms in the UAE across the border to Saudi Arabia. Leveraging on the commercial success of IPTV services in the UAE (launched under the brand name elife), the same services can now be offered to Etisalat companies or to other telecom companies in the region, under a white label offering. This will help place Etisalat at the forefront as a leading and innovative group offering new, unique, and advanced services in the region. Etisalat UAE unveiled eplus - a portal featuring rich content and social media - during the Gitex Technology Week held in Dubai. eplus allows subscribers to make high quality video and voice calls, leveraging VoIP technology in addition to utilising social networking applications and e-commerce. It supports the most popular social and instant messaging platforms, synchronises mobile contacts with online friends, and consolidates all contacts into one single screen, called Radar View. eplus also provides users with the latest music, games and apps. Within the same intuitive interface, customers can manage bill payments and check data usage. The eplus application also provides consumers with full mobility through its PC and mobile synchronisation. The service uses the NFC platform and is m-commerce enabled. It currently works across the 3G, 4G and Wi-Fi networks and supports the Android 2.2 platform, and will also encompass other operating systems in future. The Etisalat Group implemented several new offers last year, based on Dynamic Discount System (DDS), which enables operators to offer special pricing based on individual site utilisation, thereby increasing network utilisation and enhancing overall profitability. DDS initiatives have been successfully launched at Moov in Togo, and are being tested among other operators in Etisalat s footprint. In line with corporate strategy to create new value for customers, Etisalat Group launched a new youth proposition in, enabling subscribers to benefit not merely from special pricing, but also, to get special deals from their preferred shops, restaurants, and brands. The first of this breed was the Epiq Nation offer launched by Zantel in Tanzania, with highly applauded results. Etisalat continues to address the plight of women in Sub-Saharan Africa, where approximately 500,000 pregnant women die every year, almost 4 million babies died during the first 28 days of life, and the risk of maternal death is 50 times higher than developed countries. As most women, especially those in low income countries, continue to deliver at home for a variety of reasons, it is vital to make home deliveries safer by reducing the three traditional delays: the decision to seek care, arrival at a health facility, and the provision of adequate care. Etisalat s Mobile Baby programme is a complete suite of services that enables birth attendants and midwives to ensure safer pregnancies and deliveries by enabling them to identify, communicate, and act on obstetric emergencies - quickly and accurately. The educational and training programmes are currently being rolled out by local NGOs and government agencies. Feedback from attendants, trainers and medical practitioners is also used proactively, for ongoing application optimisation. 22

14 23 24

15 Management Review continued Middle East - Etisalat UAE Etisalat UAE has continued to introduce innovative services and initiatives across the country, to streamline processes, to maximise efficiency, and to benefit customers and employees alike. Innovative services The soft launch of the elife TV service on Etisalat UAE s new IPTV 2.0 platform was completed in May, and during the course of the year, more than 30,000 new IPTV subscribers were successfully added, and over 50,000 existing IPTV 1.5 customers successfully migrated to the platform. New services and capabilities introduced on the platform include Live TV Choice packages of 350+ channels, Catch-Up TV on 20+ channels, Video on Demand (VoD) with 500+ movie titles, and customised experiences. elife TV is scheduled for two major service enhancements by May 2012, which will enrich and further differentiate the service from all others in the market. By this period, users will see key elife TV services, such as elife OnDemand, Live TV, and Catch- Up TV extended onto LG Smart and 3D/Smart TVs, as well as other connected TVs, and mobile, tablet and pad devices. Earlier in the year, Etisalat s VoD service, elife On-Demand, was successfully demonstrated on an LG Smart TV. The significance of this innovation is that customers who purchase an LG Smart TV or LG 3D Smart TV in the UAE, and have elife 2P double play service accounts, can browse and rent any of the 500+ movies without a TV set top box. As a complementary service to elife TV, Etisalat UAE launched elife OnWeb, an Over the Top (OTT) service in July, allowing users with different types of devices to access content that is both unique and 100% on-demand. By November, the elife OnWeb service was already available on four LG products, and by the end of 2012, it will be made available on three Android based tablets/pads, two Satellite Hybrid/IP HD receiver STBs, a Google Android TV STB, two Android based mobile phones, and on all iphones. Two major initiatives were undertaken in in the field of NFC (Near Field Communications): the first, a pilot project with Emirates NBD and Visa for tap and pay payments, and the second, another pilot with MasterCard and Network Internal to enable payment on NFC phones. Based on successful results of these projects, Etisalat UAE is currently working with both Visa and MasterCard to launch commercial NFC services in the country. Etisalat s VoIP solution, eplus, is an integrated Mobile Application Client designed specifically to directly counter OTT players and VoIP operators, while leveraging on the company s strongest assets and simultaneously converging products and VAS services in unified interfaces. eplus is also a unique interface to the full portfolio of Etisalat services offerings, and will ensure that customers receive an enhanced communication experience, thereby driving retention and loyalty. Further, eplus 360 degree communications campaign is expected to influence non-etisalat customers to migrate to Etisalat, and allow the company to capture new mobile broadband subscribers. The application was highlighted during a live demonstration at Gitex. First class network Etisalat s technical teams were busy throughout, implementing a range of network upgrades and enhancements to improve the quality and customer experience of Etisalat s services. Credit card payment facilities were installed in more than 70% of Etisalat Payment Machines (EPMs), raising the tally from last year s 20%. Residents can now deposit money in their mwallet accounts, at all EPMs in the country, and in Sharjah, residents can pay their water and electricity bills at EPMs located in the West Coast. The transformation of the Etisalat network to an all-ip fibre based infrastructure was concluded in 1.3 million tenancies, including residential and business venues. Home Ready was achieved for 0.9 million tenancies, and customer activations of FTTH/GPON network for 0.5 million tenancies. The first phase of IPTV 2.0 development is complete, with service testing and network verification conducted across all IPTV 2.0 PoPs. The project will provide a fully integrated SD & HD MPEG-4 converged IPTV platform for various requirements on a turnkey basis. The FemtoCell network development is planned in phases to improve indoor mobile network coverage issues, and thereby enhancing revenues. A work force management system has been implemented successfully for elife, PSTN and Internet Broadband using GPRS based PDAs. This ensures that Etisalat staff and contracted technicians are able to procure field jobs quickly, and close service requests for service delivery and faults at the earliest. A new Billing Improvement Programme is expected to improve customer experiences with billing, and simultaneously reduce revenue loss resulting from inaccuracies and late bills. The Techno Centre established in Abu Dhabi became fully functional in, and produces regular reports on proactive testing, recurring test and functional tests, to support the marketing function. Enhanced customer service The launch of the SERVE programme is one of the first signs that mark Etisalat UAE s transformation from a telecommunications company into a service-oriented company. The two-fold focus of the programme is: what customers want, and how to serve them better and faster. The SERVE Team conducted 12 road shows in the first 2 months of the programme, resulting in a 30% reduction of calls to the call centre, which is directly attributed to first contact resolution, or resolving the problem from the very first call. During, SERVE made a positive impact in several areas that influence customer satisfaction, resulting in significant leaps and the highest scores in the year s TRIM Index-CSAT scores. The main objective of the Complaints Management Program is to improve overall process efficiency, and enhance the mindset and behaviour of all departments towards handling customer complaints. saw successful structuring and testing of a root cause resolution process that minimises reoccurrences of identified issues. Other achievements were a pilot for a centralised complaint management process, and the definition and development of a frontline empowerment process. A new unit was set up under Channel Marketing to help various teams make management decisions based on intrinsic understanding of value distribution across the customer base, and across operational geographies. Geo Marketing is based on location based management (LBM) and covers both wireless/mobile and fixed line businesses. Distinct advantages proven during the year include addressing business needs such as short-term network CAPEX/OPEX optimisation, regionalisation of the company s business model, and revamping of management dashboards. Various special offers were launched during the holy month of Ramadan to combat dropped usage and changed calling times. Based on learning gained from Etisalat Pakistan, the insightful offers saw extremely high levels of adoption, and not only helped drive usage upwards, but also fostered positive customer experiences. Community involvement Etisalat UAE supported, and contributed to more than 35 different initiatives in, through sponsorships and donations for sports, educational, health, community and charitable events held across the country - in an ongoing mission to help enhance all aspects of society. The events, projects and recipients were vastly varied in size, scope, structure and purpose, and included among others, the Dubai World Cup, the Khalifa Fund, the UAE Special Olympics Team, a countrywide Anti-Smoking Campaign, the National Census, and Dubai s Holy Quran Award. In December - to mark the commemoration of the UAE s 40th National Day - Etisalat established its own CSR foundation, Ayaadi, with the prime objective of supporting local communities. The focal point for a national-level social project of significant objectives and expectations, Ayaadi aims to participate in sustainable growth for the UAE by providing technology solutions in education and human resources. Further, the foundation aims to support health, environment and community development, by offering technical support and cooperating with ministries and others to launch joint programmes with social dimensions. And finally, Ayaadi will work closely with the Ministry of Education and non-profit organisations to plan and execute various development projects focussing on youth

16 Management Review continued Middle East - Mobily (Saudi Arabia) Middle East - Etisalat Misr (Egypt) Mobily reinforced its leadership position in the Kingdom, with the launch of 4G (TDD-LTE) technology. Working in association with subsidiary and data arm Bayanat Al Oula, Mobily LTE is expected to cover more than 32 cities and governorates, representing 85% of populated areas. Etisalat Misr has continued to be a pioneer and a leader in the Egyptian market, since its launch in May As the first 3G operator in the country, Etisalat Misr deploys the latest technologies to keep ahead of competition, and to respond to constantly changing customer needs. Bayanat Al Oula has also signed an agreement for the construction of an advanced fibre optic network (FTTX) at a cost of SAR 400 million. The agreement - which was signed with four international companies - intends to roll out fibre networks of 4,000 kilometres reaching 70,000 homes in Riyadh, Jeddah, Dammam and Al Khobar in its first phase. A new bio-sourced, eco-friendly SIM card was made available to subscribers in. The card is fully compliant with telecommunications standards and is certified 100% recyclable - two features that make it a first in the Gulf region. A third launch was the DC-HSPA+ 42Mbps Wi-Fi Router in partnership with NetComm Ltd, which allows millions of home users across Saudi Arabia access fast broadband speeds, and connectivity on multiple devices. Mobily s HSPA+ network will also create a transform the lives of Internet users in remote areas by providing high-speed access to large volumes of data and communication, without cable connections. Mobily opened the largest all-female call centre in Saudi Arabia in a bid to expand customer service facilities, minimise waiting times and improve customer experience. The Jeddah centre is equipped with the latest technologies, and manned by 347 Saudi female staff. The new 7ala National prepaid package targeted new and existing Mobily customers with competitive rates for local calls. Mobily ran an intense sales and promotional campaign during the Hajj season, with dedicated outlets at the Kingdom s air, land and sea passages and miqat locations, and overseas, in prominent Arab and Islamic countries. As a direct result of ceaselessly introducing secure, reliable and robust products to the Saudi market, Mobily was selected by The General Organisation for Social Insurance (GOSI) to help develop the Wahat Ghurnatah business park. Among the services Mobily will deliver are IPTV, Ethernet VPN (L2), IP VPN (L3), and Direct Internet Access. The company is currently engaged in working on integrating mobile and fixed networks to provide efficient traffic capacities and to meet the requirements of future applications - allowing users to watch TV content on mobile phones, laptops, tablets or in their cars without any interruptions. Continuing the social role it plays in supporting various local charities, Mobily auctioned 15 platinum mobile numbers and raised SAR 6.7 million to benefit 10 healthcare charities in Q1,. In an effort to boost innovation and stimulate creativity, the company launched an App Developers Award, inviting ideas and designs from young Saudi developers, in 11 different categories. Recognising that data consumption will increase dramatically in the immediate future and customers are increasingly demanding high speed data access, Etisalat Misr became the second mobile operator in the world to deploy IP/MPLS core, and implement the latest packet core technologies including direct tunnelling features. Concurrently, Etisalat Misr became the first mobile operator across Africa and the Middle East to conduct an end-to-end field test for HSPA+ 42 Mbps technology. Aimed at providing customers with high speed 3G data connection, the technology was commercially launched in many areas of the country at the end of. Responding to the directives of the National Telecom Regulatory Authority of Egypt, Etisalat Misr began implementing a new mobile numbering plan in October. The transformation from 7 digits to 8 digits was greatly facilitated by an easy-touse mobile application made available to most Misr subscribers. The migration is expected to be completed by Q1, In an innovate move, Etisalat Misr signed a unique agreement with Facebook and became the first mobile operator in Egypt to provide customers with mobile internet bundled with Facebook applications. The Save More service provides unlimited data usage to heavy social media users, at extremely affordable monthly fees. A new service was launched in to protect customer privacy through call filtering. Using the service, Etisalat Misr customers can now control and manage their incoming calls, by making themselves unavailable to undesired calls while remaining reachable to those they wish to connect with. Etisalat Misr continues to deploy advanced, powerful, and flexible technology platforms to manage various customer loyalty programs. For instance, MORE offers high-value customers several exclusive privileges and unique benefits including a competitive point scheme with a wide variety of gifts, a dedicated customer care number, red carpet treatment at Etisalat stores, and exclusive affinity and discount deals at a variety of lifestyle brands. The loyalty system also manages a comprehensive and end-to-end customer lifecycle, based on enrolment, segment, channel and customisation. An inbuilt mechanism calculates multiple points to provide customised treatments to customers. In addition, a comprehensive gift catalogue enables customers to choose from a wide range of gifts using various channels such as IVR, retail outlets and online channels. A key strategic objective of the HR department of Etisalat Misr is to recognise and reward innovative ideas. A special team has been dedicated to assess and evaluate original and beneficial ideas that are aligned with strategic objectives, and to incorporate them into the company s business activities. Winning ideas are rewarded with cash prizes, or with membership to the company s Innovation Club - with privileges including special outings, free books, and discount vouchers. Grand ideas that achieve specific business objectives are rewarded handsomely, with a cup of recognition and a substantial monetary award. Innovators also become members of the implementation team that translate ideas into useful products or services. Good corporate citizenship has continued to be a strategic objective for Etisalat Misr since its entry into the Egyptian market, and this is exemplified through various initiatives across the country. Origin, the largest cause-based and water-related CSR initiative in Egypt, aims to provide clean water to more than 100,000 Egyptian homes in a very short period. Further, Origin aims to tackle local farmers irrigation problems with an educational and practical conservation campaign run under the slogan, Save Water, Save Life. Since its launch in 2009, the award-winning programme has succeeded in providing 3,000 water connections to 30,000 people, 13 water purifications stations to serve 80,000 people, 7 kidney dialysis purification units to increase the efficiency of 77 kidney dialysis machines, 20 kidney dialysis machines to help 3,800 patients every month, and 6,500 metres of irrigation channels to serve 15,000 people. The campaign also urges Egyptian society as a whole to take serious and practical steps to overcome water scarcity in the country. Etihad Etisalat (Mobily), KSA 27 28

17 Management Review continued Middle East - Etisalat Misr (Egypt) continued Middle East - Thuraya In Q3, Etisalat Misr launched its largest initiative, Give Back, enabling all employees to contribute personally to the wellbeing of society, by supporting charities of their choice through the Etisalat Intranet portal. The programme enables employees to render a wide range of social services such as providing financial support to poor families, helping with the treatment of desperate medical cases, funding micro projects, paying off debts, giving interest-free loans, and providing pure water connections through Etisalat s Origin Initiative. In addition to monetary donations of EGP 202,544 raised during the year for various charitable causes, employees also assisted with a food programme held during Ramadan. The launch of Etisalat Masmou3 was marked with great fanfare, and the special service for speech and sight challenged consumers highlights the company s vision to serve every segment of the local community. The service s special software helps impaired customers use their mobile phones - quickly, easily, and independently. Etisalat Misr continues to be the official sponsor of Al Ahly Club - the most popular sports club in Egypt with a fan base of 40 million - in the largest sports sponsorship deal in Egyptian history. Harnessing the huge popularity of the club, the company hopes to convert fans into customers during the three years of the contractual period. The year brought a number of successes for Thuraya, including increased market roll-out of the high-speed data solution Thuraya IP, steady growth of handheld terminal sales, and higher penetration of vertical markets. Despite mounting competition, the company also maintained its impressive 65% market share in mobile satellite voice penetration within coverage area, underlining growing popularity in the MSS (maximum segment size) market. A continued focus on vertical markets saw key hires of personnel with in-depth industry experience, and the launch of new programmes for partner management, pricing packages and enhanced customer care, emphasising a determination to provide world-class consumer experiences that combine quality, reliability and affordability. Thuraya IP - the world s smallest and fastest satellite broadband solution - reported an increase of 60% in subscriber growth across diverse industries, including broadcast media, government, NGOs and large energy enterprises. The introduction of flexible pricing plans, Shareplan - a pricing plan specifically designed for major consumers with multiple Thuraya devices - and a successful marketing campaign promoting its unique features, were key drivers in the successful uptake of Thuraya IP. Thuraya XT - the only satellite handheld device to offer full walk and talk capabilities - gained popularity for its ease-of-use and wide range of intuitive features such as the fastest data service, GPS waypoint navigation and a glare-resistant display. To further accelerate business growth, Thuraya focused its efforts on reinvigorating commercial operations across the Asia Pacific market. A specialised team was deployed to manage operations from the Singapore hub, and this resulted in both, greater market awareness and increased subscriber growth. The company continues to invest in a strong CSR strategy, supporting groups and individuals in various community social, charitable and sporting activities. Harnessing its strong relationship with the International Telecommunications Union (ITU), the company provided financial assistance to victims of the Japanese earthquake and tsunami, earlier in the year. The company also provided handheld phones to the Ugandan government, with a view to assist the authorities in setting up a disaster warning system. Most prominently, Thuraya partnered with Al Aan TV to raise awareness of the long-drawn famine in Somalia by donating a Thuraya IP solution, which enabled live streaming of TV stories from areas of drought. Thuraya also made a contribution to relief activities in the wake of the floods that devastated many parts of Thailand, towards the end of the year. With a new version planned for release in early 2012, the Thuraya XT Dual - which will allow consumers to easily select between satellite and GSM mode depending on their location - Thuraya is set to build on its success as the world s market leader in satellite handhelds

18 31 32

19 Management Review continued Africa - Atlantique Telecom (West Africa) Africa - Etisalat Nigeria Product innovation was a key theme for Atlantique Telecom throughout, and across all six African markets. The launch of the CRBT service attracted large new segments of young customers with vast choices in personalised music for mobile caller tones. BlackBerry solutions were successfully introduced across all operations, with solutions for both postpaid and pre-paid customers, and rapid market penetration was achieved with the offer of monthly, weekly, and daily tariff plans. Additionally, a centralised group media campaign was rolled-out in November. Atlantique Telecom became the first operator in the region to introduce tablets to consumers, with a diverse portfolio including Huawei S7, ipad, Samsung Galaxy and BlackBerry PlayBook. Following the successful launch of the Moov passport in - which allowed customers to roam at special rates across the footprint of West and Central Africa - new offers were designed to address specific needs. Etisalat UAE and Mobily Saudi Arabia were integrated into the scheme under Moov Hadj Roaming, allowing customers to enjoy low flat rates while travelling to Mecca. The company continues to partner with key internet and social networking players, to surf the wave of new consumer trends and capture the loyalty of the digital generation. Moov has signed an agreement with Google to allow Gmail users to send and receive free SMS messages - a move that will make it the first telecom group in the region to provide this innovative service. The Customer Satisfaction Index established across all operations continuously tracks both performance and perception, thereby facilitating improvements in processes on a regular basis. The Index aims to cultivate a customer relationship based on everyday confidence, with a view to foster brand loyalty, develop values, and optimise services. In addition, a customer satisfaction survey conducted in almost all markets during the year provides various tools to improve performance and profitability and enhance customer satisfaction. Continuous improvements and best practices are put in place at Atlantique Telecom Group level and then cascaded through to all countries to help improve customer service delivery. Ivory Coast, Benin and Togo are already engaged in this process. Atlantique Telecom strengthened its CSR initiatives in, building on the achievements of previous years. In Benin, the company donated equipment for a medical centre, contributed to the Disaster Flood Relief, sponsored the Christmas tree of SOS Children s Village, and conducted a blood donation drive in Abomey Calavi. In Cote d Ivoire, the company donated food and non-food items in Bouake and Daloa, and ran free vaccination campaigns against meningitis in Bouake, Daloa, San Pedro, Korhogo, Bouafle and Toumodi. In Gabon, Moov partnered with the Directorate General of Road Safety to establish Village School Bambino. In the Central African Republic (CAR), food donations were made on International Women Day and during the holy month of Ramadan. And in Togo, several initiatives are underway to educate children from rural areas. Etisalat Nigeria has been creating ripples in the country s fiercely competitive market since inception - with innovative products and services, strong branding, and popular community and charitable initiatives. In September, the company launched its high speed broadband internet service, Easyblaze, to customers in Lagos, Abuja, Port Harcourt, Ibadan, Kano, Kaduna, Zaria, Warri, Enugu, Aba, Awka, Nnewi, Onitsha and Benin. The high speed packet access (HSPA+ 3.75G technology) offers speeds of up to 42Mbps and allows subscribers to achieve quicker internet access, faster file downloads, video calling and streaming, and related activities. Within a month of its launch, Easyblaze was ranked the fastest internet connection in Nigeria. Following on the heels of Easyblaze, the launch of Gaga further reinforced Etisalat Nigeria s position as the industry leader in innovation. The Gaga Android smartphone, an Etisalat customised 3G-enabled device, operates on Android 2.2 and boasts stunning features for download, acceleration, photography, viewing and functionality. A comprehensive marketing communications programmed helped achieve all targeted objectives, and sustenance plans are underway to leverage the product further. Etisalat Nigeria s new DotMe - an SMS based bulletin board service which allows customers to share information and stay connected while on the go - was first for the country. The introduction of this service has increased talkability among targeted audiences, and the company has emerged as the undisputed network of choice for young customers. The popular Easycliq Easy was reloaded with two new features in - Cliq for the Week and Cliq for the Day - offering subscribers incomparable benefits and superior experiences. The new additions succeeded in showcasing strong brand commitment to existing subscribers who constantly desire new approaches to self-expression, and to young subscribers with a high propensity to consume data. Extensive media coverage and subsequent results of the reloaded services have led to growth in the lucrative youth segment. Elite World, the high-value proposition was further enhanced during the year, with both post-paid and pre-paid versions to suit specific target markets. The company continues to reward and encourage its valued distribution partners with a scheme that celebrates high sales across all product lines, and the second edition of the performance awards held in underscored their critical, importance in achieving strategic goals, and overall success. Etisalat Nigeria was prompt and proactive in responding to the call made by Nigerian Communications Company (NCC) - the regulatory body for telecommunication operators in introducing a universal practice of SIM registration in the country, concentrated efforts were made to adhere to the September deadline, and various measure were taken to ensure full compliance from all existing customers. Acting to overcome the threat of disconnection, unique promotional activity designed to encourage subscribers included 30% bonus credit for all recharges. This promotion was supported by a PR campaign explaining the mechanics and benefits of registration promo, and a concurrent educational campaign for subscribers, dealers, staff and other stakeholders. The company continued its mission to provide eco-friendly and sustainable products and services, and in, partnered with Oberthur to introduce innovative climate-protecting SIM packs. The new ecosims card reduces the amount of plastic involved in production by half. Its environmental footprint is also half that of the classic SIM card, thereby reducing greenhouse emissions from 16 grams of carbon dioxide to 8 grams, per card. This new product is delivered to customers in recycled paper products using vegetable-based inks, and has thus reduced environmental impact across all stages - from production to client delivery. The 0809ja concept - the communication launch pad for Etisalat Nigeria s market entry three years ago - was leveraged during the year to celebrate the uniqueness of Nigerian consumers, and their quest to be the best. As a result of sustained efforts, the 0809ja concept has not only increased brand awareness, but also translated into a popular culture. The company launched a Benin Experience Centre in, to reinforce the Etisalat values of customer-centricity, to increase retail footprint, and to bring products and services closer to both potential and existing subscribers. The initial objective of increasing retail footprint was achieved very quickly, and the Benin Experience Centre is positioned as an exemplary showcase of customer-friendliness in the country. The Etisalat CSR Centre a learning centre developed in partnership with Lagos Business School of the Pan African University continues to disseminate CSR knowledge, through research, seminars and conferences. The Centre held three workshops in, in addition to training the school s MBA students, on sound CSR practices

20 Management Review continued Africa - Etisalat Nigeria continued Africa - Canar (Sudan) The company s inaugural CSR report was published in June, outlining strategies, activities, challenges, programmes and successes. This was lauded by stakeholders, and was helped reinforce Etisalat Nigeria s identity as a caring and responsible company. A large number of new initiatives were launched during the year, as were revisions and enhancements to existing programmes: Etisalat Nigeria partnered with the Lagos state government to bring about sustainable change and development in public primary and secondary schools though the Adopt-A-School campaign. Under its private sector sponsorship initiative, the company has adopted Akande Dahunsi Memorial High School, Osborne Road Ikoyi, Edward Blyden Primary School, Okesuna Lagos Island and Rabiatu Thompson Primary School Surulere. This life-long adoption of the schools involves achieving sustainability through continuous support for infrastructure development, teacher training, leadership and management, and financial support for students. Reinforcing the brand s strong youth focus, Etisalat Nigeria has partnered with NYSC - an umbrella organisation for young graduates in Nigeria - to use their Career Days and Camp Fire Nights to guide and encourage youth. Meanwhile, the Etisalat Career Day aims to provide opportunities for Nigeria s future entrepreneurs, by offering exclusive mentorship platforms, and positioning youth to embrace the entrepreneurial challenges of the future. The year s efforts were acknowledged by glowing testimonials from NYSC s Zonal Inspector and Corporation Members. The company s Career Counselling Programme is a unique platform for Etisalat staff to make a motivational impact on students in host communities, by delivering talks and offering expert support. Run in association with the Lagos Empowerment and Resource Centre (LEARN), the Employee Volunteering Scheme taps into the unique skill-sets of staff members to facilitate the development of Nigerian youth. More than 1,500 secondary school students were addressed during the course of the year, and other initiatives are underway to encourage staff involvement in the community. The Etisalat Merit Awards Scheme offers Nigerian university students the opportunity to secure grants towards the completion of their studies in electrical and electronics engineering, computer science and management courses. Based on academic performance and indigenousness, the best performing students are often offered opportunities to join the company upon graduation. By the close of, more than 600 students had benefitted from this scheme. The Etisalat Teacher Training Programme is designed to train teachers in primary and secondary schools across the six geo-political zones of Nigeria, and provide them with a firmer grasp of their core subject areas, while equipping them with tested methods of imparting this knowledge. This enabling programme was launched in, with the English language, and teachers are currently being re-trained by the British Council, and encouraged to become Cambridge-accredited by attending exams at the end of the course. The company formally entered into a partnership with FC Barcelona earlier in the year. Among other initiatives, a promotion running between November and March will reward customers with the opportunity to watch an FCB match in Spain. The Fight Malaria Initiative was implemented through two vehicles during the year: a radio drama series titled The Will to Win, and the distribution of insecticide-treated nets to secondary schools in North Nigeria. Other efforts include engaging local communities and state government ministries of health and education in battling malaria, and at the close of, Etisalat Nigeria had helped prevent the incidence for over 10,000 Nigerians. On an entertaining note, Etisalat became the principal sponsor of Nigerian Idol, the domestic version of the most successful reality show in the world. Canar s two-fold strategy of retention and penetration was deployed throughout the year. The July launch of WiMAX services was targeted at corporate clients, both in terms of internet- eased lines, and point-to-point connectivity. Canar also created customer service short numbers for enquires, and technical complaints from corporate clients. A regional sales campaign was introduced to corporate customers in Port Sudan for WiMAX services, while door-to-door campaigns were conducted for broadband and fixed lines in Khartoum households, and for ADSL services for SMEs. A new Wi-Fi service was launched to target people on the move, especially in parks, recreational areas, and universities. Two of the year s most successful promotions were 1X Retention and Voice Retention. New POS channels for e-vouchers and mobile banking were introduced at Al Salam Bank, and two new distributors appointed for scratch sales in the Khartoum area. All launches and promotions were based on an extensive market segmentation research undertaken by Canar s Business Intelligence (BI) and Research units. Targeting residents of Greater Khartoum, the project involved personal interviews for 3,000 individuals, and the process helped identify size, expenditure and effective channels for relevant segments. Canar subsequently increased penetration of the SME and Large Enterprise segments, with the introduction of a new channel partner on a co-marketing model. The restructuring of the in-door Business Centre (BC) sales teams also contributed to increased sales. And finally, a telesales team was deployed at the call centre, specifically to address the SME segment. The company expanded its CSR portfolio with several community initiatives and sponsorships - awards for the top ten students of Sudanese High School Certificate and prizes for the first Festival of Excellence; sponsorship of Sudan s Internet Society Week and Website Competition, the Al Anees Centre for Speech and Language Services, and Kassala State Tourism Festival. Employee engagement was strengthened with the Fikra Scheme, an initiative that encourages ideas and decision making. Sudan 35 36