Table of contents. Etisalat

Transcription

1 Annual Report 2013

2 Table of contents 02 Key Highlights of Business Snapshot 06 Chairman s Statement 08 Board of Director s 10 Timeline 12 Chief Executive Officer s Statement 14 Management Team 18 Group Strategy 20 Awards 22 Operational Highlights 26 Our International Presence 30 Management Review Middle East 30 Africa 38 Asia 44 Services Holding 48 Human Capital 50 Corporate Social Responsibility Corporate Governance 57 Independent Auditor s Report to the Shareholders 58 Consolidated Income Statement 59 Consolidated Statement of Comprehensive Income 60 Consolidated Statement of Financial Position 61 Consolidated Statement of Changes in Equity 62 Consolidated Statement of Cash Flows 63 Notes to the Consolidated Financial Statements 112 Notice of General Annual Shareholders Meeting 01

3 Key highlights of AED Billion Revenue 148 Million Aggregate Subscribers 18.9 AED Billion EBITDA 7.1 AED Billion Net Profit 6.3 AED Billion CAPEX 70 Fils Dividend per share

4 Aspire To lead Business Snapshot is an international, blue-chip organisation with operations in 15 countries across the Middle East, Africa and Asia. It is one of the leading telecom operator with one of the largest market capitalization among Middle East, African and Asian telcos. It is a highly rated telecom company with ratings from Standard & Poors, Moody s and Fitch (Aa3/AA-/A+); with low leverage and strong UAE Government support. s focus is on delivering innovative solutions to transform the communities in which it operates and fast track social development and economic growth. This is underpinned by its commitment to actively develop and engineer platforms for growth within the local markets in which it operates through the deployment of advanced technologies, quality networks and customer focused services. became one of the world s fastest growing telecom operators; with customer numbers growing from 4 million to over 140 million in less than 10 years. It s international acquisition programme began in earnest in 2004 through the award of the second mobile license, and the first 3G license in Saudi Arabia. Since then the company has witnessed rapid expansion, across the Middle East, Africa and Asia through acquisitions and organic growth. now has access to a population of close to 700 million people, with Thuraya; its satellite network provider covering over two thirds of the planet s surface. The three key pillars of our strategy involve owning and managing an attractive well balanced portfolio of assets consisting of controlling stakes in well positioned operators in target markets. Our second pillar involves providing differentiated, innovative service offerings that leverage our broadband infrastructure and networks. Superior customer experience resulting from s operational excellence is our third pillar. We aim to pro-actively and consistently serve our customers with a common set of brand values based on in-depth customer understanding and building trusted relationships. We will manage this through a strong focus on the efficiency and effectiveness of our operational processes throughout our footprint. For nearly 40 years, has helped the UAE sustain its position as the region s hub for business, trade and foreign investment by providing reliable and high quality services. Earlier in the year, UAE successfully completed the rollout of its fibre-to-the-home (FTTH) network across 1.3m homes in the country. This achievement contributed to UAE being ranked as a global leader in connecting homes in the country on the FTTH network. The advanced infrastructure allows the utilisation of the most advanced technology applications to the UAE market. has launched 4G mobile services in the UAE and Saudi Arabia, and today operates the Middle East s largest LTE network with population coverage exceeding 82 per cent. offers both the Middle East s fastest fixed line broadband service with speeds of up to 500Mbps - the highest mobile broadband connectivity speeds to date. It has also launched several 3G networks in its footprint including Egypt Afghanistan; Ivory Coast and Benin. These advancements have helped capture market share with the introduction of mobile broadband services and affordable internet access. is committed to the principles of corporate social responsibility through strategic partnerships to increase access to education and health care via technology. Under the banner for Good, and its operating companies have been actively working on Mobile for Development initiatives in 2013, in collaboration with its global partners. The efforts have helped bridge the gap between emerging markets and developed nations, while generating impressive digital dividends in the form of jobs, economic growth and stability. 04 Annual Report

5 Growing Through Innovation Last year, witnessed encouraging financial results. Increased revenues and profits and a growing customer base have put in a strong position to embrace the changes that are enveloping the telecoms industry and have enabled it to continue to add value to customers, shareholders and the communities in which we operate. Over the past year we have started to detect a cultural change throughout the corporation, as a new approach encouraged by the leadership cascades to our teams on the ground throughout the Middle East, Asia and Africa. This paradigm shift is the evolution of into a brand that will not just offer its customers products and services, but one that will provide them with a complete experience every time they interact with. By putting customers at the heart of everything we do, we are enabling our current success and planting the seeds of future growth. This is an encouraging step that has put us firmly on the path to reach our aspiration of becoming the leading and most admired telecoms operator in all our operating markets. Being an industry leader is about more than just securing a large market share in each country. It is about driving innovation, satisfying customers and engaging with communities for the benefit of all of society. We want to be a trusted companion to our customers, helping them navigate the digital world. We know the technological advances sweeping through the industry can be daunting for many consumers, it is therefore our job to simplify and explain the changes in terms everyone can embrace. The customer s journey is never over and we must constantly grow to meet their ever increasing demands. As I have already said, proof that we are on the right track is in our financial results and growth. Over the past year, s revenue grew 18 per cent to AED 38.9 billion and the consolidated net profits after Federal Royalty of grew 5% to AED 7.1 billion. Those are impressive indicators by any standard and testament to the strategic direction of the corporation. Given such strong financials the board decided to recommend dividend distribution of 70 fils per share for fiscal year Our aspiration to grow and develop was epitomised last year by the potential deal with Vivendi to buy its shares in Maroc Telecom. We reached an agreement on key terms and signed a Share Purchase Agreement following the completion of a series of successful negotiations. When Maroc Telecom profitable operations are added to our global footprint, we will have a very strong portfolio in West and North Africa. By investing in Maroc Telecom, is investing in the future of Africa. The deal follows a global trend of consolidation in the industry and it is another step toward becoming an admired operator. By admired, I mean that we should actively participate in local growth, give local businesses and communities the means to grow and develop, provide jobs, release Chairman s Statement new innovative products that can be harnessed in education and healthcare, and give directly to good causes through socially responsible initiatives. Innovation is at the heart of everything we do, whether it is pricing, developing networks, diversifying products and services or giving back to society. Another area that was fertile soil for innovation this year was in striking up partnerships that will benefit our organisation and add value to the end user. These include agreements with MasterCard to bring the award-winning mobile commerce solution, Flous, to some of our African operations, and joining the machine-to-machine (M2M) World Alliance, an organisation dedicated to advancing this exciting new technology. Innovation in digital products and services throughout the group has continued to be led by the Digital Services Unit. This talented group of individuals is driving best practices across s operating countries and developing transformational innovative solutions. s growth to become one of the industry s largest companies brings new opportunities, but it also brings new challenges. Large organisations are at risk of becoming too slow to adapt to changes in the marketplace, especially in a dynamic environment such as telecoms. We must therefore always be on our guard and leverage the size of the network and vast expertise amongst employees to the benefit of each operating country. Finally, I would like to thank the Leadership of the UAE and our shareholders for their continued and unwavering support; our employees for their dedication and most of all our customers for their loyalty and faith in our services. On the back of such a successful year, we are looking to the future with confidence that we will continue our emergence as one of the best telecoms operators in the world. Eissa Mohamed Al Suwaidi Chairman 06 Annual Report

6 Board of Directors Eissa Mohamed Al Suwaidi Chairman Investment & Finance Committee Khalaf Bin Ahmed Al Otaiba Vice Chairman Member-Investment & Finance Committee Sheikh Ahmed Mohamed Sultan Bin Suroor Al Dhaheri Member Audit Committee Abdulla Salem Al Dhaheri Member Chairman-Nomination & Remuneration Committee Mohamed Hadi Ahmed Abdulla Al Hussaini Member Investment & Finance Committee Mubarak Rashed Al Mansouri Member Nomination & Remuneration Committee Investment & Finance Committee Abdulfattah Sayed Mansoor Sharaf Member Investment & Finance Committee Mana Mohamed Saeed Al Mulla Member Audit Committee Abdelmonem Bin Eisa Bin Nasser Alserkal Member Nomination & Remuneration Committee Essa Abdulfattah Kazim Member Chairman-Audit Committee Shoaib Mir Hashim Khoory Member Nomination & Remuneration Committee Hasan Al Hosani Corporate Secretary 08 Annual Report

7 Timeline - History of Our Journey 1983 The ownership structure changes: The United Arab Emirates government acquires a 60 per cent share in the company and the remaining 40 per cent is publicly traded The Emirates Telecommunications Corporation launches Middle East s first mobile network The Emirates Telecommunication Corporation is founded Internet services are rolled out across the country, another first in the region. 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 Middle East s first GSM service is introduced in the UAE. also launches Emirates Data Clearing House, now one of the world s leading clearing houses - providing complete solutions to GSM operators, who in turn, provide roaming facilities to their customers The Middle East s first broadband Internet service using the latest ADSL technologies is introduced. buys a stake in Tanzanian operator Zantel, its first step towards becoming a major international telecoms group becomes one of the founding investors in satellite telecommunications provider, Thuraya wins the second license to operate in Saudi Arabia thereby introducing Etihad Mobily. It also buys a stake in Canar, a new fixed line operator in Sudan launches Middle East s first 3G network and offers MMS services to its customers Mobile subscribers exceed the 1 million mark as mobile data services is introduced using ewap. introduces the E-Vision brand for its cable TV services wins the third mobile license in Egypt and launched the country s first 3G network networks. It is also awarded a license to provide mobile services in Afghanistan. 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, Academy, E-Facility Management, e-real Estate, Directory Services and Tamdeed acquires a stake and takes management control of PTCL, the incumbent operator in Pakistan. 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 completes the rollout of a nationwide fibre optic backbone over which next generation services will be provided in the UAE. is named Largest Carrier in the Middle East in the Financial Times Top 500 list acquires a stake in a green-field operator in Nigeria, the largest and fastest growing market in Africa. introduces mobile TV and officially launches its wholesale business unit as The Smart Hub for the Middle East introduces the first real 4G (LTE) experience to its customers in the UAE acquires Tigo, a Sri Lankan operator, which is later rebranded to Lanka signed SPA with Vivendi to acquire Vivendi s 53% stake in Maroc Telecom Group. Benin obtained a Universal Mobile Service License which covers 2G, 3G, 4G and any other mobile technologies available in future in Benin won 3G license in Afghanistan and Ivory Coast and launched the first 3G services in history of Afghanistan. won three GSMA awards in the Best Mobile Health Innovation and mwomen Best Mobile Product categories for its mobile health innovation Mobile Baby, as well as the Best Mobile Money Innovation award. 10 Annual Report

8 Aspire Forward If I had to summarise this year in one word it would be growth. As we continue our journey from being a provider of fixed and mobile communications to a company that offers and enables the use of a vast number of innovative digital products and services, the relationship with customers is growing deeper too. That is why we speak about adding value. We are providing our customers with the tools to solve problems in their daily lives. Aspiring forward, we have adapted to this evolution admirably so far, even though there is more work to do. And while it is important to recognise the challenges, it is just as important to recognise, and take comfort from our success, and indeed celebrate it. The results this year are a clear indication that we are on the right track. In 2013, aggregate subscribers, grew 7 per cent to reach 148 million and Group revenues grew by 18 per cent to reach AED 38.9 billion. Revenue continues to be boosted by our solid growth in the UAE and international markets, which now account for 36 per cent of the consolidated revenue. Our net profit after Federal Royalty reached AED 7.1 billion, 5 per cent higher than last year. In the UAE, we continued to cement our position as the leading operator in the country despite further competitive pressures. We have continued to be the dominant force in mobiles, driven by our competitive pricing, innovative service offerings and the high quality of our network. Continued improvements in customer service have also engendered a spirit of loyalty among our customers and we will continue to focus on providing a unique customer experience and superior service in the future. We also have strong growth in the data and internet segments, and revenues will continues to grow as we benefit from our investment in infrastructure, including the establishment of the world s most extensive Fiber-To-The-Home (FTTH) network. By utilising best technological and innovative solutions globally available, we are connecting government, businesses and individuals to the services they demand at exceptionally fast speeds. continued to deepen its relationship with other international organisations that will be important to the future of telecoms. Our intention to innovate through global partnerships was clearly demonstrated last year when we joined the Machineto-Machine (M2M) World Alliance, a coalition of eight major operators that are working together to bring the latest M2M technologies to global markets. By being part of the alliance, is positioning itself to become a leader in the global telecom industry. is now the enabler of many innovative services most noticeably in government. A clear example of this is the e-government which we have seen in the UAE for many years and which was reinforced further by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President & Prime Minister of UAE, Ruler of Dubai in his Mobile Government vision. We are delighted with the progress being made in the UAE and we are working with many ministries on different turn-key projects. Some of these are based on our experiences in other markets especially in the fields of Identity, Health, Education and Finance. All this is testament to our visionary government and the healthy growth which has created potential far beyond expectations. has proven that mobile finance technologies can be secure and lifechanging across its footprint in places such as Afghanistan, Tanzania and recently in Sri Lanka, Egypt and Niger. Mobile money technology is now at a very mature level and extremely secure and offers significant benefits for communities, especially those with lower incomes. Another notable innovation was when we became one of the first companies in the world to pass the initial stages of a procedure to obtain our own top-level domain names. The approval paves the way to using an extension such as.etisalat. This will help our work in continuing to build our brand as one of the most innovative companies in the region. Turning to our work in the community, an event that caught the eye of the world Chief Executive Officer s Statement was s involvement in a bicycle tour across five European countries to test the latest mobile technologies that can be used to help manage and cure diabetes. Diabetes, of course, takes a huge toll on many families, especially here in the UAE, and the tour became a symbol for s efforts to help combat the disease. We hope that the technology tested during the tour will make a difference to people s lives. The combination of innovation and giving back is part of our efforts towards the communities we serve. There have also been many other positive developments this year: higher revenues, and successful initiatives. However, we must not allow good news to abate our efforts or distract us from the difficult challenges facing the industry. Whether our voyage is on calm or turbulent waters, we must always focus on the goal of longterm success through innovation, strong performance and progress. We still have a lot of work to do to build our capabilities, be more efficient and launch services in areas such as M2M, e-commerce, video and cloud services. Having said that, I m extremely confident that we will have more good news in the coming years. This is because we invest in people and empower our customers. I am honoured to lead the Group in building upon the success of previous years and into the next stage for generations to come. Ahmed Abdulkarim Julfar Chef Exective Officer 12 Annual Report

9 Management Team Ahmad Abdulkarim Julfar Chief Executive Officer- Group Mr. Julfar was appointed as the CEO of the Group in August Prior to this appointment, he was the Chief Operating Officer of EG. Mr. Julfar has more than 25 years experience in the telecommunication sector and has served in various management positions including General Manager of ecompany, ComTrust and s Dubai region. In addition, Mr. Julfar serves on the boards of Mobily, where he is the Chairman of the Risk Management committee, Misr and Services Holding. Mr. Julfar holds Bachelor s Degrees in Civil Engineering and Computer Science from the USA. Saleh Al Abdooli Chief Executive Officer, UAE Engineer Saleh Al Abdooli was appointed as Chief Executive Officer of UAE in April A strong and charismatic leader, Saleh rose to international fame after his resounding success in Egypt as the CEO of Misr. He built and launched the first 3G operator in Egypt in 7 months. In less than five years, he achieved 27% of revenue share, 28% market share, 36% of EBITDA margin, and 99% 2G/3G coverage. Al Abdooli holds Bachelor s and Master s in Electrical Eng. and Telecom from University of Colorado at Boulder, USA. Serkan Okandan Chief Financial Officer, Group Mr. Okandan joined in January 2012 as Chief Financial Officer of the Group. Prior to his appointment, he was the Group Chief Financial Officer of Turkcell. Mr. Okandan started his professional career at PricewaterhouseCoopers in 1992, and worked for DHL and Frito Lay as a Financial Controller before joining Turkcell. Mr. Okandan is a board member and Chairman of the audit committee of Nigeria, PTCL, Ufone and a board member of Services Holding. Mr. Okandan graduated from Bosphorus University with a degree in Economics. Khalid Al Kaf Managing Director and Chief Executive Officer, Etihad (Mobily) Khalid Al Kaf was appointed as Chief Executive Officer and Managing Director of Etihad (Mobily) in July Prior to this appointment, Mr. Al Kaf worked for over 19 years with in various capacities. He was the General Manager of s Network Services division before being appointed as the start up project manager and later CEO for Mobily. Mr. Al Kaf is the Chairman of the Board of Directors of Sri Lanka and is a board member of Mobily. Mr. Al Kaf holds a Bachelor of Science degree from George Washington University, USA. Essa Al Haddad Chief Regional Officer /Africa, Group Essa Al Haddad was appointed as the Chief Regional Officer, Africa, of the Group in January Prior to this appointment, he was the Chief Commercial Officer of EG. In his 34 years of experience, Mr. Al Haddad has served in various senior leadership positions including Executive Vice President of Engineering of UAE, Chief Marketing Officer UAE and Chief Marketing Officer of EG. Mr. Al Haddad is Chairman of Zantel, Vice Chairman of Nigeria and board member of Atlantique Telecom, Mobily and Canar. He holds a higher diploma in Telecom Engineering and an MBA from the UK. Saeed Al Hamli Chief Executive Officer, Misr Mr. Al Hamli was appointed as Chief Executive Officer of Misr in April Prior to this role, he was the Chief Executive Officer of Afghanistan since Mr. Al Hamli has more than 20 years of experience at and Thuraya where he was the Chief Commercial Officer before moving to Afghanistan. Mr. Al Hamli also serves on the board of Misr. Mr. Saeed holds a Bachelor s of Science degree in Electrical Engineering from USA and Executive Master s of Business Administration degree from the American University of Sharjah. Dr. Daniel Ritz, Ph.D Chief Strategy Officer, Group Daniel Ritz was appointed as Chief Strategy Officer for EG in February Prior to this appointment, he was the CSO at Swisscom Group where he held various positions including Board member of each of the Group s Executive Board, Fastweb, Belgacom and Swisscom IT Services. He also served as Chairman of Swisscom s Hospitality Services and as CEO of Swisscom (Central & Eastern Europe). Prior to joining Swisscom, he was a partner at BCG. Dr. Ritz also serves on the Board of Atlantique Telecom, Thuraya, PTCL and Ufone. Dr. Ritz holds a Ph.D from the Hochschule St. Gallen in Switzerland. Jamal Aljarwan Chief Regional Officer/ Asia, Group Jamal Al Jarwan was appointed as the Chief Regional Officer of the Asian cluster of EG in October Prior to this position, he was the Chief International Investments Officer of EG. Mr. Al Jarwan started his career at in 1988 and held various positions including Chief Commercial Officer at Thuraya. Mr. Al Jarwan is a member of the Board of Afghanistan, Sri Lanka, PTCL and Ufone. He holds a Bachelor s degree in Business from Dayton University in the United States and an MBA in International Management Development from Lausanne University, Switzerland. 14 Annual Report

10 Management Team Abdulaziz Al Sawaleh Chief Human Resources Officer, Group Mr. Al Sawaleh is the Chief Human Resources Officer (CHRO) of the Group. Prior to this position, he was the CHRO of UAE. Mr. Al Sawaleh has more than 25 years experience in various leadership positions. He is responsible for leading the global Human Capital strategies including the areas of talent development, organization effectiveness, compensation & benefits and Performance Management. He is a board member of Atlantique Telecom and Services Holding. Mr. Al Sawaleh holds an MBA degree in Global Leadership Management from UAE University and a BBA degree from the USA. Obaid Bokisha Chief Procurement Officer, Group Obaid Bokisha was appointed as Chief Procurement Officer of the EG in June Since joining, he was assigned various responsibilities contributed to the network implementation of all existing systems covering GSM, UMTS, LTE and WiFi networks. Positions held include Vice President Mobile Networks Planning & Int l Support of UAE and Senior Vice President Mobile Networks Optimization EG.Mr. Bokisha serves on the board of Misr, Zantel and Nigeria. Mr. Bokisha has a degree in Communications Engineering from the College of Engineering. Nasser Bin Obood Chief Government Relations and Corporate Communications Officer, Group Nasser Bin Obood was appointed as Group Chief Government Relations and Corporate Communications Officer at EG in April Prior to this, he was Acting CEO for UAE. Mr. Bin Obood joined in 1986 and held various senior positions including General Manager of Al Ain region, Deputy CEO and Chief Corporate Affairs Officer for UAE and Chief Corporate Affairs Officer of the Group. Mr. Bin Obood serves on the boards of Thuraya and Atlantique Telecom. Mr. Bin Obood holds a Bachelor s degree in Science from the UAE University, Al Ain. Hatem Bamatraf Chief Technology Officer at Group Mr. Hatem Bamatraf was appointed Chief Technology Officer at Group in September Prior to this position he was the Executive Vice President of Enterprise Business at Du. Hatem began his professional career in 1995 at and was seconded to Mobily in 2004 as Director of Mobile Network Development in the Central Region, KSA. He graduated from the College of Engineering and holds a bachelor s degree in Engineering. He has been recognised by Global Telecom Business as one of the 40 under 40 telecom leaders in the world. Rainer Rathgeber Chief Commercial Officer, Group Rainer Rathgeber was appointed as Chief Commercial Officer of EG in January Prior to joining, he was Senior Vice President of Marketing in Europe of the OTE Group. Mr. Rathgeber joined Deutsche Telekom in 2002 as Head of Strategy for T-Mobile Germany, and Executive Vice President of Sales and Service Strategy for T-Mobile International. He then went on to serve in various positions including Executive Vice President of Market Management for T-Mobile International, CEO of T-Mobile Croatia and Member of the Executive Management Committee of T-Mobile International. Mr. Rathgeber holds a Diplom- Kaufmann Degree in Economics. Javier Garcia Chief Internal Auditor, Group Javier Garcia joined in December 2012 as Chief Internal Auditor of the EG. Mr. Garcia was the head of Internal Audit at Telefonica Group before joining. He held various positions with Telefonica including Business Process Audit Director and Vice President of Internal Audit (Chile) before becoming the Group Head of Internal Audit. Mr. Garcia holds a Bachelor s in Economics and a Master s in Financial Markets from the Autonomous University of Madrid Khalifa Al Shamsi Chief Digital Services Officer, Group Khalifa Al Shamsi was appointed as Chief Digital Services Officer of the EG in Prior to this role, Mr. Al Shamsi held the position of Senior Vice President of Technology Strategy of the Group. Since joining in 1993, Mr. Al Shamsi has held various key senior positions including Vice President and Senior Vice President of Marketing of UAE. Mr. Al Shamsi serves on the Boards of Afghanistan and E-vision. Mr. Al Shamsi has a Bachelor s degree in Electrical Engineering from the University of Kentucky, USA John Wilkes Chief Internal Control Officer, Group John Wilkes was appointed as the Chief Internal Control Officer for EG in January Prior to this, Mr. Wilkes was the General Manager of Risk & Supply Chain of the Vodafone Hutchison Company. He has more than 24 years of experience in companies such as KPMG Air in New Zealand where he was the Group Internal Auditor and Stockland in Australia where he held the position of Chief Risk Officer. Mr. Wilkes is a qualified chartered accountant. Dr. Kamal Shehadi, PhD Chief Legal & Regulatory Officer, Group Kamal Shehadi was appointed as Chief Legal & Regulatory Officer of EG in November He Joined in 2010 as Head of the Regulatory Department. Prior to that, Dr. Shehadi was the Chairman and CEO of TRA, Lebanon. He has more than 17 years of experience in consulting and advisory services for telecom regulatory authorities and telecom service providers. Dr. Shehadi serves on the board of Atlantique Telecom. Dr. Shehadi has a B.A. in Economics from Harvard University and a PhD in International Political Economy from Columbia University, USA. 16 Annual Report

11 Vision, Mission and Strategic Pillars Vision Mission Strategic Pillars To be the leading and most admired emerging markets telecom group Provide best in class total customer experience for retail and business Deliver attractive returns to shareholders while investing in the company s long term future Support economic development and job creation through ICT & socially responsible behavior One Company Operational Excellence Customer Experience People & culture Portfolio Service offering The services provided by the communications industry have never been more in demand by both consumers and businesses alike. In today s rapidly evolving digital society, the role of the communications industry has proven to be a key enabler for global socioeconomic growth. From a strategic perspective, the opportunities arising in the industry are coupled with challenges. Major telecommunications players are undergoing significant transformation and change, while boundaries across the value chain are becoming increasingly blurred. More than ever, it is imperative to have a clear understanding of the forces shaping the industry and the optimal position for each player to gain its competitive advantage. The worldwide telecommunications industry with estimated revenues of approximately USD1.7 trillion at the end of 2013 will continue to represent a sizeable and attractive industry, particularly in emerging markets. In s footprint, we envisage significant growth in the telecommunications industry. This growth will be driven primarily by broadband, voice in some markets, and new revenue streams across its footprint. s corporate strategy, outlined last year and reinforced this year, continues to enhance the focus of the organisation across its capabilities in the consumer, business and wholesale segments. The strategy continues to be based on six pillars, which are designed to deliver the objectives of the organisation: Service Offering, Customer Experience, Operational Excellence, Portfolio, One Company and People & Culture. The progress achieved on these fronts during 2013 is highly encouraging and further upsides are expected in the coming years. Service Offering s commitment to enhance its service offering through differentiated and innovative services was evident in the numerous initiatives deployed in Enhancement of customer segmentation and the introduction of new services allowed the organisation to provide incremental value to its customers. For example, continues to leverage its customer-value management capabilities across its footprint to enhance customer retention. In the new digital space, s Flous M-Commerce service was launched in seven new countries in 2013, reaching a total of nine m-commerce enabled operations, with a total registered base of 10.5 million at the end of In the enterprise segment, also witnessed an increase in both market share and value share by deploying solutions that are meeting customer s requirements. The increased loyalty and uptake of services are strong indicators of successful strategy implementation. Customer Experience works continuously on providing customer insight-based and focused propositions, as well as on creating a positive customer experience across all touch points. In 2013, initiated several programmes aimed at improving end-to-end customer experience, with particular emphasis on front-facing elements. An example of these efforts is the increased deployment of s own points of sale in the form of flagship stores across its footprint. Operational Excellence Despite the fact that continues to achieve one of the highest margins in the telecom industry, the organisation is committed to continuously improving its operational excellence. In 2013, numerous strategic initiatives across procurement, network optimisation and capital expenditure became key drivers of s healthy margins. will continue to implement and pursue further improvements by leveraging the international scale of the group over the coming years. Portfolio Based on the established investment guidelines of s corporate strategy, which focuses on the company s operations in the Middle East, Africa and Asia, recent M&A activities have been highly targeted to enhance existing positioning. Activities in 2013 included acquisitions of 3G licences (e.g. Moov Benin) and initiatives to strengthen the company s position through in-market consolidation in some of our core markets. In addition, on 4th November 2013, announced that it had signed a share purchase agreement with Vivendi in relation to the acquisition of Vivendi s 53 Group Strategy per cent stake in Maroc Telecom. The closing of the acquisition is subject to a number of conditions including, among others, the execution of a shareholders agreement with the Kingdom of Morocco regarding Maroc Telecom, securing competition and regulatory approvals in the Kingdom of Morocco and other relevant jurisdictions. The potential acquisition will be EPS accretive and will significantly enhance s positioning in West Africa. From a capital structure optimisation perspective, also continues to monitor its operational requirements to ensure that an optimal structure is in place for its operating companies One Company With a strong footprint across 15 markets, has the scale to deliver exceptional returns. The company is reinforcing a strategy which leverages this scale by enabling a common set of brand values, enhancing integrated systems and processes, and ensuring robust and consistent governance, as well as maximised economies of scale across the Group. As an example, deployed group-wide finance and procurement systems in order to enhance the efficiency of the organisation. People & Culture s people and corporate culture are at the heart of its strategy. Having the right talent and processes in place will continue to enable the Group to deliver on its strategic pillars successfully. In 2013 alone, several strategic programmes were deployed to ensure the organisation attracts, develops and retains the right talent. Initiatives like the High Potential Programme and Top 100 Talent are examples of the organisation s actions to ensure that appropriate resources are in place for any potential business requirement (e.g. succession planning, management reinforcement etc.). In addition, the Group continues to identify ways to streamline its processes to ensure that efficiency is improved. As grows over the next five years, it aims to deliver exceptional customer service and an innovative and dynamic range of services across an optimised and efficient portfolio. With these key principles in place, will be well positioned to achieve its vision of becoming the leading and most admired emerging markets telecom group. 18 Annual Report

12 Awards Corporate Marketing and Customer Care Arab Achievement Awards Leader in Telecoms International Business Awards Corporate Social Responsibility Programme of the Year CommsMEA Best Overall Operator of the Year International Business Awards Best Customer Care GSMA Global Mobile Awards Best Mobile Product and Service for Women in Emerging Markets Mobile Money Global Awards Best Bank Led Mobile Money Programme (Egypt) International Business Awards Most Innovative Company African Investor of the Year Africa Business Awards Arabia CSR Awards First Runner-Up in NGO-partnership Forbes Middle East Most powerful company in the UAE International Business Awards Honourable Mention - Green Programme International Business Awards Honourable Mention - CSR Programme International Business Awards Best New Product or Service of the Year Health Mobile Money Global Best Mobile Money Deployment in the Middle East Asia Brand Employer Awards Training Excellence Asian Brand Employer Awards Asia s Most Preferred Brand SAMENA Awards Technical Leadership Innovation and Engineering Management Global Telecom Business Innovation Awards Video Services GSMA Global Mobile Awards Best Mobile Health Innovation GSMA Mobile World Congress Best NFC/Mobile Money Product or Service International Business Awards Best Chairman International Business Awards Best Executive of the Year in Telecommunications Arabian Business CEO of the Year TMT Finance Middle East Best Broadband Provider COMMS MEA Best Fixed Line Provider GSMA Global Mobile Awards Best Mobile Health Innovation International Business Awards Most Innovative Company in the Middle East and Africa Financial Times Special Commendation - Technology in Sustainable Finance Telecom World ME Best Middle Eastern Wholesale Carrier 20 Annual Report

13 Operational Highlights Substantial Growth with Aspirations to Excel Aggregate Subscribers (m) Subscribers Group aggregate subscriber number grew by 7% on an annual basis to 148 million in 2013 and a 3% growth by December The net addition of 9 million subscribers in the year was mainly a factor of good subscriber growth in the UAE, Saudi Arabia, Egypt, Nigeria, Benin and Togo markets. In the UAE, the active subscriber base grew to 10.4 million subscribers in 2013 representing YoY growth of 16%. Attractive promotional campaigns and new products and services led to the mobile subscriber base growing at 19% to 8.4 million subscribers from 7.0 million. Fixed line subscribers declined to 1.0 million representing a 5% decrease from the previous period. However, this is mainly attributed to the transition of customers to the elife segment (i.e. double play and triple play). The elife segment had a growth rate of 30% for the year to 0.7 million customers. Africa cluster aggregate subscriber base, increased to 28.9 million at the end of December 2013 representing YoY increase of 7%. Asia cluster aggregate subscriber base reached 36.3 million at the end of December 2013, declining by 1% EBITDA (AED b) EBITDA Group Consolidated EBITDA grew to AED 18.9 billion representing a YoY growth of 12%. EBITDA growth was mainly due to increase in revenue and flow through to EBITDA. EBITDA margin declined by 3 points to 49% in This decline is mainly due to higher interconnect & termination costs, higher proportion of low margin handset sales, higher staff costs, network and marketing expenses as well as the diluting impact of consolidation of Pakistan operations. In the UAE, EBITDA in 2013 increased YoY by 4% to AED 14.0 billion leading to an EBITDA margin of 57% in comparison to 59% in the previous year. This decline is attributed to a higher proportion of low margin devices costs and higher interconnection costs. EBITDA of international consolidated operations in 2013 increased YoY by 41% to AED 4.1 billion resulting in 17% contribution to consolidated EBITDA. In Egypt EBITDA for 2013 declined by 19% to AED 1.6 billion due to higher network costs supporting network expansion, higher cost of sales and marketing expenses, and a one-off provision for the interconnection dispute with another mobile operator. This resulted in EBITDA margin declining by 5 points to 34%. Adjusting for the impact of the oneoff, EBITDA margin would have been 36%. In Africa cluster, EBITDA for 2013 declined YoY by 25% to AED 0.5 billion and EBITDA margin fell by 6 points to 19% mainly due to one-off provision in Atlantique operations. Adjusting for these provision, EBITDA Margin in 2013 would have been 22%. In Asia cluster, EBITDA in 2013 increased to AED 1.9 billion and EBITDA margin increased to 31% as a result of the consolidation of operations in Pakistan. Revenues Revenue (AED b) Group s full year consolidated revenue increased YoY by 18% to AED 38.9 billion driven by strong performance of domestic operations and the consolidation of Pakistan operations. In the UAE, revenue grew by 9% to AED 24.8 billion as a result of subscriber growth, increase in demand for data services and higher handsets sales. Revenue from international operations increased by 47% to AED 13.8 billion, representing 36% of consolidated revenues. In Egypt, revenues for 2013 of AED 4.7 billion, were down 7% from prior year mainly impacted by currency devaluation. However, revenue in local currency evidenced single digit growth due to an increase in the post-paid customer base, growth in the data segment and handset sales. Africa Cluster consolidated revenue grew by less than 1% to AED 2.8 billion. Performance was mainly impacted by competitive pressure in Ivory Coast and currency devaluation in Sudan. In 2013 the Asia Cluster benefited from the inclusion of full year results of Pakistan operations with revenue growth for the year increasing three-fold to AED 6.3 billion. Excluding Pakistan operations, full year revenue would have declined by 4% Net Profit (AED b) EPS(Fils) Net Profit and EPS Consolidated net profit after Federal Royalty increased YoY by 5% to AED 7.1 billion in Despite higher depreciation and amortization charges, taxes and lower finance income, net profit improved due to higher share of results of associates, and lower impairment charges and other losses, and lower Federal Royalty. Earnings per share (EPS) increased to 0.90 fils in On 4th of March 2014 the Board of Directors has resolved to propose a final dividend for the second half of 2013 at the rate of 35 fils per share, bringing the full year dividend to 70 fils per share. This proposal is subject to shareholder approval at the Annual General Meeting scheduled for the 26th March Annual Report

14 Operational Highlights CAPEX (AED b) CAPEX Consolidated capital expenditures increased YoY by 52% to AED 6.3 billion resulting in capital intensity ratio of 16% in Capital expenditure during the year focused on network expansion, network capacity and universal mobile license acquisition in Benin. In the UAE, capital expenditures in 2013 increased by 12% to AED 2.0 billion while capital intensity ratio remained stable at 8%. Capital expenditure in the UAE focused on ensuring network leadership by enhancing network quality and coverage. Capital expenditures in consolidated international operations in 2013 increased by 94% to AED 4.3 and represented 67% of total capital expenditures. In Egypt, capital expenditures increased by 5% to AED 1.2 billion as compared to last year resulting in a capital intensity ratio of 26%. In Africa cluster, capital expenditures in 2013 increased significantly by 156% to AED 1.2 billion due to universal mobile license acquisition in Benin and acceleration of network deployment in Benin and Togo. This resulted in a capital intensity ratio of 44%. Adjusting for the licence acquisition in Benin; capital intensity ratio would have been 31%. In Asia cluster, capital expenditure increased more than two-fold to AED 1.8 billion due to the consolidation of operations in Pakistan. Profit and Loss Summary (AED m) FY 12 FY 13 YoY Revenue 32,946 38, % EBITDA 16,855 18, % EBITDA Margin 51% 49% -3pp Federal Royalty 6,451 6,115-5% Net Profit 6,742 7,078 +5% Net Profit Margin 20% 18% -2pp Balance Sheet Summary (AED m) FY 12 FY 13 Cash & Cash Equivalents 13,934 15,450 Total Assets 84,606 85,716 Total Debt 5,806 5,872 Net Cash 8,128 9,579 Total Equity 49,913 49,593 Cash flow Summary (AED m) FY 12 FY 13 Operating 10,486 12,974 Investing (225) (4,854) Financing (6,327) (6,585) Net change in cash 3,934 1,535 Effect of FX rate changes 28 (19) Ending cash balance 13,934 15,450 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) FY 12 FY 13 EBITDA 16,855 18,901 Depreciation & Amortization (3,385) (4,607) Exchange gain/(loss) (58) (141) Share of results of associates and Joint ventures 1,263 1,754 Impairment losses (2,825) (1,374) Operating Profit Before Federal Royalty 11,851 14, Annual Report

15 Our International Presence Middle East Asia Operator Country United Arab Emirates Licnese Type: Mobile, Fixed and Internet Ownership 100% Population: (million) 9 Penetration Mobile 191% Fixed: 25% Number of operators 2 Network Coverage, population 100% Operator Etihad (Mobily) Country Saudi Arabia Licnese Type: Mobile & Interent Ownership 28% Population: (million) 29 Penetration 180% Number of operators Mobile 3 Network Coverage, population 99% Operator Country Afghanistan Licnese Type: Mobile Ownership 100% Population: (million) 31 Penetration 72% Number of operators Mobile 4 Network Coverage, population 78% PTCL/Ufone Pakistan Sri Lanka Mobile, Fixed and Internet Mobile 23% 100% Mobile: 73% Fixed: 3% 113% Mobile 5, Fixed 11 Mobile 5 77% 75% Operator Misr Operator Thuraya Country Egypt Country Licnese Type: Mobile & Interent Ownership 66% Population: (million) 83 Penetration 118% Number of operators Mobile 3 Network Coverage, population 99% Licnese Type: Satellite Telecommunication Ownership 28% Population: (million) Penetration Number of operators Satellite 4 Network Coverage, geographical 140 countries Africa Operator Atlantique Telecom, Moov Operator Country West Africa Country Nigeria Licnese Type: Mobile Licnese Type: Mobile Ownership 100% Ownership 40% Population: (million) 62 Population: (million) 174 Penetration 65% Penetration 72% Number of operators Mobile 2-6 per country Number of operators Mobile 5 Network Coverage, population 59% Network Coverage, population 82% Operator Canar Operator Zantel Country Sudan Country Tanzania Licnese Type: Fixed Licnese Type: Mobile and Fixed Ownership 89% Ownership 65% Population: (million) 34 Population: (million) 50 Penetration 1% Penetration 54% Number of operators Fixed 2 Number of operators Mobile 6, Fixed 2 Network Coverage, population 31% Network Coverage, population 45% 26 Annual Report

16 Inspired to transform communities

17 Middle East UAE Management Review maintained Innovation, community and customer focus at the core of its brand values, consistently creating value for its loyal and future customers In 2013, UAE responded to the changes in customer behavior, technology and the country s competitive telecommunications landscape, following a strategy that was in line with Group s strategic pillars of innovation, customer centricity and global family. With the launch of new services, solutions and products, the telecom major s UAE subscriber base and the number of mobile subscribers grew to 10.2million and 8.3m respectively. Furthermore, currently has the widest coverage of its dual network comprising of both 3G and 4G technologies in the UAE, with 99.8 per cent coverage across the country in 3G and over 80 per cent penetration across populated areas in 4G networks. The company successfully upgraded its network of 3G with speeds touching 84 mbps from the previous 42 mbps providing the best quality voice and data transmission in UAE. UAE also completed the successful testing of Voice over LTE (VoLTE) and esrvcc (enhanced Single Radio Call Continuity) providing more services to its subscribers over 4G LTE network, the first in the Middle East and North Africa (MENA) region. offers the widest coverage of its network comprising of 3G and 4G technologies in the country. has upgraded its telecom network in 2013 to provide the best indoor coverage in the country by increasing the number of indoor base stations to 6000 to provide best indoor coverage with high quality service and download speeds, according to the recent report from the TRA. is working to increase the number of base stations over 7500 by the end of the year Earlier in the year, UAE successfully completed the rollout of its fibre-to-the-home (FTTH) network across 1.3m homes in the country. This achievement contributed to UAE being ranked as a global leader in connecting homes in the country on the FTTH network. The advanced infrastructure allows the utilisation of the most advanced technology applications to the UAE market. Its high-speed broadband internet enables users to enjoy multiple high bandwidth applications such as IPTV and online gaming in an integrated single interface for landline, internet and television-based services, providing a truly converged digital home experience to its customers. While UAE already holds the record for the highest internet speed of 300 Mbps in UAE, it decided to go one step further with the announcement that it is introducing a speed of 500Mbps for e-life subscribers. elife is based on Next Generation Fibre Optic Technology which allows customers to combine high-quality voice, supersonic Internet, and highdefinition TV into one experience. UAE recently launched the elife multiscreen service becoming the first provider to allow customers to watch TV on tablets, PCs, laptops and Smartphones from anywhere using WiFi or UAE s high speed 3G and 4G networks. Realising the strategic implications of the cloud, UAE launched its first cloud service for small-and medium-sized businesses (SMBs) and enterprises. Cloud Compute (Infrastructure as a Service) is a pay as you go model, reducing IT costs up to 60 per cent and time to market faster by up to 90 per cent. Hosted at UAE s Jebel Ali data centre, it offers easy access to infrastructure, ability to scale up or down rapidly based on demand and faster time to market than conventional hosting services. UAE brought smarter services into every aspect of its 2013 offering, providing a range of end-to-end managed systems that offer complete solutions to a range of industry verticals. Government was one of the key focus areas for UAE in 2013, and in support of the UAE s goal of creating a smarter environment by promoting digitisation initiatives, UAE set about permanently improving how governments serve and interact with the needs and expectations of the public. In cooperation with the Roads and Transport Authority (RTA), UAE launched the Smart Nol service, which gives Dubai commuters smoother travel via NFC-enabled mobile phones. This service is in line with UAE s longterm strategy to support mgovernment and initiatives raising the profile of the country, as well as impacting the lives of the people of UAE. The company also pioneered several advanced green technologies such as Emirates Energy Star (EES) which have directly impacting the UAE s carbon footprint by reducing C02 emissions. From December 2011 until May 2013, the programme prohibited the emission of more than 11,860 tons of carbon dioxide, which is equivalent to planting as many as 2,546 trees. UAE clients that have benefitted from the programme include Sheikh Khalifa Medical City, Dubai Electricity and Water Authority (DEWA) and Abu Dhabi Commercial Bank (ADCB). Other environmentally friendly practices included substituting traditional paper bills with electronic bills via its ebilling initiative. In addition to billing changes, a new customer technical support centre was established with highly skilled front and back office teams to support field staff. This unit aim is to achieve high levels of customer satisfaction during the cycle of service provisioning and fault management. Employing almost 2000 staff across the country, UAE boasts the biggest call centre network in the UAE. The telecom provider assists more than 150,000 customers every day at the company s three main centres in Ajman, Abu Dhabi and Sharjah. Staff speak a wide variety of languages including Arabic, English and Malayalam and are all trained in soft skills to enable them to communicate effectively with customers. Staying true to its commitment towards meeting the changing requirements of its growing customer base, UAE revamped its packages and introduced new services offering flexibility and value for money. Among the many offerings introduced were the per-second billing service for pre- and post-paid plans, and attractive bundles and packages offering customised solutions and further savings for customers. UAE also came up with customised plans to cater to the increase in data consumption needs of customers a direct result of UAE being ranked as the country with the highest smartphone penetration in the world. Responding to the increased demand for data among UAE consumers, the telecom major streamlined its data package offerings across both prepaid and post-paid services to enhance and simplify the current rates. International calling prices were also slashed and UAE removed international borders for its Wasel pre-paid customers through its call international, pay local campaign. In addition, the company maintained exclusivity in product offerings by introducing the latest smart devices -- Samsung Galaxy S4 Zoom, iphone 5s/5c, BlackBerry Z30 and Nokia Lumia 625 and Huawei s 4G LTE mobile broadband devices to the UAE market at competitive prices. Given the UAE s status as an international tourism and business hub, the telecoms major introduced competitive roaming rates in 190 countries, thus strengthening its leadership in this key area. With an extensive network of 680 international roaming partners, UAE allows prepaid and post-paid customers to use their phones abroad without the need for a subscription or deposit. has also marked a regional first with the launch of its new business roaming data packages aimed at frequent business travellers from the UAE, the country with the highest smartphone penetration in the world UAE s corporate social responsibility activity continued to grow and develop, meanwhile, and the company s commitment towards supporting the community was highlighted through projects such as the YouTube/Google channel, Duroosi, that offers videobased educational tutorials for students. Launched in partnership with the UAE Ministry of Education, UAE developed 600 tutorial videos offering selflearning options complete with visual aids and ease of access. Among the other smart solutions introduced in 2013 was Smart Education, which is the cloud web portal service for K-12 schools designed to provide comprehensive features and functionalities required for school operations as part of UAE managed and cloud service portfolio. In recognition of its outstanding efforts and achievements, UAE won a number of awards in 2013 such as the Best Middle East Product and Service provider at the Capacity Global Carrier Awards Other accolades included being named Best Wholesale Service Provider at the Telecoms Review Summit, Overall Operator of the year at Comms MEA Awards and winning the ICT Development Customer Care Excellence Award at the Middle East Government and Business Customer Care Excellence Awards for the second consecutive year. 30 Annual Report

18 Middle East Mobily Middle East Egypt Management Review Mobily has gained popularity and strength in the region since its inception and has further built on its reputation this year for strong technical capabilities and innovative approach. Innovative and value-driven communications solutions that are geared towards the current and future needs of its consumers have continued to be the mark of Misr in With a clear focus on the consumer and business market segments, 2013 saw the realisation of several new ideas and concepts in the region s telecom sector with Mobily s launch of new products and services. The consumer segment benefited from services like mview a video on demand application that works across device platforms and Kibot a robot for kids that serves as an educational tool. The Arabic Letters App enhanced customer learning experiences by providing a mobile platform that teaches the Arabic alphabet in an intriguing manner, using animal names and their corresponding sounds to recognise them. Keeping in line with the company s focus on customers needs, Mobily introduced the Mushaf App, which proved to be invaluable for customers wishing to read and memorise the Holy Quran. Additionally, while integrating GPS capabilities into a mobile application, the Hajj App was launched to provide customers with a better reality guide when on pilgrimage. The application gave directions to specific destinations by detecting current locations using the phone s camera. Building on this innovative approach to consumer needs, Mobily also launched ibill an interactive bill with the option to view various usage and summary graphs, and the Easy Charge App a unique Optical Character Recognition (OCR) technology that allows users to charge their prepaid cards using their phone s camera. While continuing to maintain its reputation for innovative and customer centric solutions, Mobily introduced the Earn and Burn loyalty points programme, becoming the first in Saudi Arabia to launch a system that works across retail segments. Other ingenious ways it reached its consumers this year were through the Nesma3k App that is dedicated to those with impaired hearing (by providing them with an application that contains information useful to various types of emergencies), and through its M-Health Portfolio, which integrates a user s health records and serves as an on-the-go wellness device. Leveraging on its collaborative partnerships in 2013, Mobily served its business segment by introducing public and hybrid cloud services that employed a multi-tiered cloud based infrastructure and state of the art technology. As a result of its collaboration with IBM, The Kingdom of Saudi Arabia s business sector also benefited from Mobily s world-class Managed Security Services (MSS). The portfolio included a range of integrated management services that detect and protect businesses from virtual security threats. Further building on this partnership with IBM, the Business Continuity and Resiliency Services was also launched to provide Virtual Server Recovery and Smart Cloud Managed Back Up services. In continuing to create value for the business segment, Mobily launched a Managed SAP Service that has proven to be a crucial step in raising a company s operational efficiency and reducing its IT infrastructure costs. Mobily s unique Cloud Advisory Service has also benefited its business clients by helping them create comprehensive resource utilisation reports as a value-added service, giving them the opportunity to transform their IT infrastructure into a Mobily Enterprise Cloud Service. Another key collaboration in 2013 with the market leading Advanced Electronics Company resulted in the launch of the turnkey Fleet Management Service. Finally, in 2013, Mobily introduced a new recruitment scheme that gave customer service team members the flexibility to work from home. The programme aims to create opportunities for women, who could start as part-time agents and then continue to become full-time employees. Egypt has continually shown great potential for growth and expansion in its mobile market. Misr introduced various new products and services in the country s telecom sector over the years and 2013 has seen more innovative and customer tailored services. In recognising the country s developing mobile usage trends, launched a number of value added services during the year including Mokalma 3al Nota that allowed pre-paid users to continue making local calls for up to three minutes even after their credit had been fully utilised. Running out of airtime credit no longer meant being out of touch. Its Sallefni 3al Nota initiative further allowed consumers to borrow credit from the company that could be used for any of its other services, including internet packages, Blackberry bundles and SMS s. In order to maintain its leadership in the mobile data segment, Misr was the first in the market to launch new data schemes, covering the broader spectrum of connectivity, be it for social media usage or daily add-on services, even offering overdraft facilities on data packages. Its Mongez plan offers customers a number of options for Internet usage, allowing them to choose the best speeds, with the widest coverage while employing the latest technology. The company also launched its Max yearly bundle revamp aimed at encouraging customers to purchase s G-tide and Telefunken tablets at competitive prices and data connectivity tariffs. During the year Misr continued to provide value-driven postpaid schemes and introduced the country s first tariff plan that could be personalised to suit individuals. My Line allowed consumers to customise and create a tariff plan that suits their usage and lifestyle. The scheme included four of its main services: My Calls, My Internet Line, My Smartphone and My Extras. Additionally, 2013 was a successful year for the implementation of Customer Value Management Techniques (CVM) in Misr through a new CVM platform that utilised USSDs for various customer offers. Simultaneous targeted offerings have tripled by combining different offers, be it related to recharge, usage development or mobile Internet, based on in-depth understanding of the behavior and needs of customers. Continuing to gain insight on consumer needs and deliver value-driven solutions, the company developed the ecam. The novel video surveillance service allows customers to monitor and secure their family and assets by remotely viewing the IP cameras anytime and on any mobile device or PC. Misr continues to encourage creativity and support innovation in the country s community of mobile developers including universities, startups and professionals through its Yalla Nsyatar Mobile Apps Competition. The open platform submission gathered over 300 ideas from across the nation s brightest tech savvy minds, awarding the top three mobile apps with cash prizes and cobranding them with Misr. 32 Annual Report

19 Middle East Thuraya Management Review Following the previous year s success streak of innovative device launches, Thuraya continues to conceptualise and deliver quality at an affordable price. During 2013 Thuraya unveiled a new Innovation Division that will be focused on spearheading strategic initiatives for the development and implementation of innovation in products, services and business models. This organisational enhancement comes at the back of the successful launch of the company s SatSleeve for the iphone and was driven by Thuraya s ambitions to further pioneer state-of-the-art solutions in the satellite industry. Thuraya also secured a long-term financing facility through Dubai Islamic Bank (DIB) for the upgrade of its network infrastructure and to support further development and expansion of its product portfolio, while enabling business expansion. The SatSleeve is a versatile and userfriendly device that brings satellite connectivity to the Apple iphone. A significant breakthrough in the mobile satellite industry, Thuraya SatSleeve is the world s first product to offer easy and affordable access to mobile satellite communications, which is delivered over Thuraya s extensive satellite network. Only slightly larger than the iphone itself, the compact adaptor provides users with the ability to turn their iphone into a satellite phone that provides reliable connectivity beyond the coverage of traditional terrestrial networks. The device is available in both voice only and data models. Thuraya won the Innovation Award at the Lloyd s List Middle East and Indian Subcontinent 2013 Awards for the SatSleeve product. In March 2013, the Thuraya IP+ was launched, expanding the Company s portfolio of mobile satellite broadband terminals. Thuraya IP+ is the fastest and lightest mobile satellite broadband terminal. Without compromising on portability, it is also designed to achieve the fastest IP speeds, ensuring quick and reliable access to broadband data services over Thuraya s extensive satellite network. Enhanced capabilities facilitate a wide range of applications including live high quality video broadcasting, web browsing, , social media communications, data transfer and VoIP applications, as well as access to corporate networks from remote locations. In September, Thuraya secured a partnership with SMART Communications, a leading provider in the Philippines, to provide low-cost, seamless and reliable crew-calling utilising the Thuraya network. The service, branded Marino PhonePal, is a multi-year deal that will see SMART partner with Thuraya on network services and hardware, and will connect thousands of Filipino seafarers to their loved ones. In addition to the initial agreement, the Companies announced an amendment in November, more than tripling the total contract. Thuraya also partnered with SMART to deploy emergency communications aid following the typhoon that struck the Philippines in November. In November, Thuraya and SRT Wireless, a US-based company, announced the development of the VIPTurbo module. This module can serve as the engine or new broadband terminals for the Thuraya satellite network, enabling manufacturers to integrate the module into new satellite terminals, reducing R&D costs and time to market. Thuraya expanded its roaming coverage across the Americas and now has a strategic partnership with AT&T, the premier communications holding company and one of the world s largest carriers in the United States. Under the agreement, AT&T will provide outbound GSM roaming for voice and data services to Thuraya users across the USA including Puerto Rico and the US Virgin Islands. Thuraya has also signed roaming agreements with Claro and Telefonica, extending similar coverage to 11 countries in Latin and South America. In conjunction with SoftBank Mobile, a telecommunications leader, Thuraya is now bringing MSS services to Japan. Thuraya s services are available to SoftBank users venturing outside of terrestrial networks, or in areas where those networks are either unavailable or are vulnerable to natural disasters. Media, energy, government, and all other types of enterprises, as well as individual consumers are able to avail themselves of Thuraya s services and solutions to enable them to communicate from anywhere in Japan and the maritime areas surrounding it. In a partnership with Chunghwa Telecom, Thuraya now provides mobile satellite service in Taiwan. The significance of this licensing agreement means that for the first time, Taiwanese consumers and enterprise users alike will no longer be required to apply for individual licensing approval from Taiwan s national telecommunications regulator to use mobile satellite services in the country. Previously, only enterprise users were eligible for licensing approval of MSS. 34 Annual Report

20 Leading with Vision & Inspiration 36 Annual Report