Zain KSA has been a key player in the digitalization plan and vision of the Kingdom, through its countless achievements and initiatives. Telecom Review caught up with Eng. AbdulRahman bin Hamad AlMufadda, CTO, Zain KSA on the operator’s contribution to the advancement of telecoms and how it is enabling the Kingdom-wide digital transformation in line with Saudi Vision 2030.
Zain KSA has been an avid contributor to the Kingdom’s digitalization plan. Can you highlight the main achievements made in this framework?
At Zain KSA, we have succeeded in expanding and developing our operational performance across all levels through an elaborate innovation-based investment strategy and have been key contributors to boosting the Kingdom’s positioning on the global ICT competitiveness map. Our possession of the largest 5G network in the Kingdom, the Middle East, Europe, and Africa and fourth globally, having deployed across 50 cities via 4,700 towers, has been a major milestone that attests to the validity of this approach.
In parallel, we paired our elaborate 5G network with a suite of corresponding solutions with multiple use cases across all industries. Our expansion strategy focused on IoT and utilizing big data. In addition to our AI-based scalable drone solutions, including micro-financing solutions through our FinTech arm ‘Tamam’.
Digital entertainment has also been part of our development plans, where we launched our 5G cloud gaming platform GeForce Now exclusively in KSA, partnering with global cloud gaming service provider NVIDIA. Confirming our progress on this level, Zain KSA ranked first in CITC’s Game Mode Q1 2021 report, recording top connectivity performance in four of the most popular video games in KSA, in addition to having the Kingdom’s fastest average response time achieved by its 5G mobile network.
Through these rolling successes, Zain KSA positioned itself as a key contributor to the advancement of telecoms and data solutions and a main enabler of the Kingdom-wide digital transformation in line with Saudi Vision 2030. At the same time, our advanced ICT infrastructure has upped the Kingdom’s capabilities in tackling the challenges arising in the wake of the pandemic that has yielded a more digital-dependent world.
Zain KSA ranked first in many international reports and global awards and recognitions in terms of delivering the best 5G services, where are you now in your 5G journey and what more do you aim to achieve?
At Zain KSA we are looking to create opportunities for multi-level growth by leveraging cutting-edge technologies in the ICT field. When it comes to our 5G journey, we pursue an all-inclusive approach to the technology as a way to achieve next generation connectivity for all, with direct impact on all aspects of life, from economy to business, healthcare, education, and entertainment.
Through this network, we successfully spearheaded innovation in the Kingdom and achieved the best 5G experience for consumers Kingdom-wide, demonstrating remarkable performance in several ICT indicators. As such Ookla’s Speedtest awarded Zain KSA the Fastest Fixed Internet award in Saudi Arabia for the third consecutive time, more recently the first half of 2021. Earlier in the year, Opensignal announced in a recent report that we at Zain KSA won all three awards of the Saudi Arabia 5G User Experience report on “Best 5G Download Speed,” “Best 5G Availability,” and “Best Download Speed Experience - 5G Users.” In parallel, we are proud to be improving Saudi Arabia’s position as a smart global hub as we have been recognized for the “best 5G network and data performance in Riyadh” (according to a report by umlaut, the global network benchmarking leader) which has contributed to the capital having the fastest 5G among the capitals of the world, ahead of highly-connected hubs like Tokyo and Dublin.
Locally, the Meqyas report, issued by the Communications and Information Technology Commission (CITC), ranked Zain KSA first in 5G deployment across the regions and cities covered by the report in Q1 2021, recognizing the company as the best performing operator in the mobile 5G average download speed.
We plan to pursue further growth opportunities through maximizing investments in the vertical expansion of 5G use cases across several sectors, especially as this technology has become a vital lifeline for driving economic growth and achieving sustainability across all industries, mainly with the prevalence of IoT, AI, Cloud computing and Big Data.
Such investments would support us in reinforcing our position in the world of digital innovation and developing a number of B2C and B2B products in fields including FinTech, healthcare, digital entertainment, drones, among others. Throughout all these solutions we capitalize on the latest innovations to transform our customer experience. Simultaneously, we are seeking to expand our range of scalable solutions to businesses, mainly SMEs, aiming to enable a smart economy that would elevate the Kingdom’s ranking as a global digital hub.
How is Zain upholding the Kingdom’s Vision 2030 goals through its 5G technology?
With the Kingdom’s ambitious Saudi Vision 2030 focusing on achieving economic growth and a better quality of life through revenue diversification and fostering innovation, a connectivity-driven transformation emerges as a critical element for wide-ranging resilience. Contributing to the ambitious national digital roadmap, Zain KSA is actively involved in enabling a sustainable, smart economy and maximizing value through investing in young talent and unlocking opportunities for the large-scale adoption of emerging technologies such as AI, Blockchain, Internet of Things (IoT), big data, and others to be used in e-government programs and private business digital transformation endeavors.
As a leading digital service provider empowering the Kingdom-wide digital transformation, Zain KSA has cemented its position, offering a wide array of innovative products and solutions that directly contribute to this goal. We are building strategic partnerships with leading investment enterprises and governmental entities in the Kingdom to enable the transition to the Fourth Industrial Revolution. These include the partnership with Neom Bay airport and the exclusive deal with the Red Sea Development company, as well as the MoU with the Saudi Authority for Industrial Cities and Technology Zones (MODON). Additionally, Zain KSA signed an agreement with the Makkah Region Development Authority to provide its telecom network at the Faisaliah Project, a pioneering destination for smart services.
All in all, through our 5G and complementing range of next-generation technologies, we provide intelligent connectivity that would underpin a digital economy and a smart society with a better quality of life for everyone. As such, we are proud to have a key role in achieving Saudi Vision 2030’s goal to transform Saudi Arabia into a globally competitive ICT hub, with modern technologies and an empowered knowledge-based society.
How do you evaluate Zain KSA’s response to COVID-19? Do you consider that you were well prepared to face the ensuing challenges?
There is no business continuity playbook for how to operate during a global pandemic; not with government authorities, private corporations, or SMEs. The fact is no one was prepared. However, at Zain KSA we were quick to recognize the challenges, map out the response scenarios, and act. The pandemic has been an eye-opener to the unlimited potential of digitalization in sustaining a globally connected economy and society, and in promoting social inclusion.
We immediately activated the business continuity committee and restructured a fresh strategy to accommodate the emerging situation with the right amount of agility and resilience while still pursuing our planned 5G network expansion. Again, we were looking into the verticals we need to develop to continue to serve our customers, and we invested more in B2B business models, and tracked emerging business opportunities in the digital spectrum.
Our swift response proceeded throughout three phases: adapting to the existing situation, stabilizing operations while protecting the cash flow, and planning the rebound.
Beyond that, we also introduced several humanitarian initiatives as part of our corporate sustainability, in line with the national collaborative efforts. These initiatives were implemented to support various sectors such as the educational sector through distance learning, the private sector by providing a well-connected, smart business environment, accommodating clients of SMEs as well as individuals, and supporting quarantined COVID cases, in addition to launching awareness initiatives.
So, did we anticipate a pandemic? Never. Did we rise up to the challenge? Absolutely.
What was the financial impact of the pandemic on Zain KSA? And what is your outlook for the remainder of the year?
Unlike its weighing effects on the bulk of businesses and industries, the pandemic had a completely different impact on the ICT industry, powered by emerging consumption patterns in line with the ensuing social and economic disruption and migration to digital services. This rise in demand was also accompanied with an increase in costs incurred, which has affected the quality of services offered by many ICT providers world-wide.
At Zain KSA, thankfully, we were able to weather this impact as we successfully accommodated the surge in demand without compromising the quality of the services we provide, despite the increase in the cost of services provided. Beyond that, we have been recognized by several local and international organizations for the speed and quality of our 5G services, as I mentioned earlier. In 2020 we witnessed unprecedented data consumption growth. Take for instance our Q2-2020 data growth, it was 55% higher than Q2-2019, exceeding our forecast and above the regular quarter-to-quarter or YoY growth, but we managed to accommodate all that traffic which had coincided with our 5G network expansion.
Our financial performance continued to post good levels during the pandemic, despite the increase in the cost of services we provided. More recently, we revealed our Q2 2021 financial results where we maintained profitability for the 12th consecutive quarter with net profit of SAR 42 million and revenues of SAR 1,896 million. And for the first time in our history, our balance sheets posted retained earnings after having successfully extinguished all accumulated losses.
These successes have been a direct result of our capital restructuring strategy, that has helped transition us in Zain KSA to a new phase of growth underpinned by enhanced service quality that has defied all pandemic-related challenges. We will continue with our investment and innovation strategy over the coming period, and will continue to future-proof our operations to ensure a transformed customer experience on all levels and fulfill the company goals.
Do you believe that corporate sustainability should be an essential pillar in an operator’s strategy?
Just as we invest to retain an elaborate digital infrastructure, we invest in our corporate sustainability to bring value to our offerings, while taking into consideration the environmental impact. Our four-pillared corporate sustainability goals address climate change, value-adding business, inclusion, and youth empowerment.
In this framework, Zain KSA has co-sponsored the National Olympiad for Scientific Creativity (Ibda’a) and partnered with “Mentor Saudi” to develop programs and initiatives that empower young Saudis and encourage them to pursue innovation to enhance their participation and maximize their impact in social work and human development endeavors.
At the same time, at Zain KSA we understand the magnitude of the redefined role of telecom players in a post-pandemic world where being connected has become synonymous to being socially and economically included. We intend to cherish this valuable opportunity to further consolidate our presence in the economic and social aspects in order to contribute to a digital economy and knowledge-based society.
In your opinion, what technological trends will drive the next phase in the telecoms and ICT industry?
From the Internet of Things, to big data, artificial intelligence, and Blockchain, the boundless potential of emerging technologies brings about transformational opportunities, scalable and applicable to virtually all sectors.
At Zain KSA we are preparing for the 5G SA (standalone), a full end-to-end network, which means connectivity is delivered vertically from the network grid to the user’s device. Zain KSA 5G SA is set to bring a greater user experience. The technology also offers the ‘5G network slicing’ feature which enables the customer to enjoy a scalable network depending on their connectivity needs and the devices they are powering.
In parallel, AI technologies are starting to gain a deeper and broader impact on industries as corporations of all sizes utilize it to harness their available resources to produce more with less. At Zain KSA we are utilizing AI and Big Data by piloting video analytics in shops. This camera will report a customer’s journey at the store and give insight of the customer experience, including the waiting time and their facial expression to determine customer satisfactory index. It will also count the number of people visiting our flagships stores. All these insights will help optimize our sales and deliver an improved customer experience. The anticipated breakthrough in AI is deep learning, or using deep learning algorithms to train the model to the highest accuracy that would ultimately increase productivity and efficiency. This mimics the learning function of the human brain. The more the AI sees, the more intelligent it becomes. An example of deep learning AI are chatbots which are becoming increasingly useful in customer service.
The combination of AI with Big Data, fast computing, and hi-speed connectivity offered through 5G would bring about disruptive technology fueling the 4th industrial revolution. We will begin to see more autonomous cars, smart lighting, and smart cities with fully-automated infrastructure systems.
Another disruptive facet of innovation is Blockchain, which represents a constantly growing ledger that keeps a permanent record of all the transactions that have taken place, in a secure, chronological and immutable way. This technology is rapidly transforming a broad multitude of sectors and industries.
Upon gaining a deep understanding of all the elements of the Fourth Industrial Revolution, decision makers and business leaders can have a better grip on the knowledge and capabilities needed to attain a fully-conceived digital transformation.