Semi-Annual Second issue 2013

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Word from the Group CEO

Highlights from the Group:LAP GreenN's strategy for 2014Digital trendsEmerging telecom trends

Highlights from the OpCos:Uganda and South SudanIvory Coast and Siera Leone

Highlights from Emerging trends:Evolution of Small Players vs. GiantsOpportunities in Telecoms in AfricaGroup-subsidiary interaction

Highlights from guest speaker:Dr. Saad Al Barak former Zain Group CEO

Have your sayA glance from the meetingA glance from the team building activitiesSpecial thanks and editorial committee

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PAGESIndex : Semi-annual strategy meeting, November 2013

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Dear Colleagues,

LAP GreenN held its semi-annual strategic meeting in November, and I am very pleased to say that the event was once again a huge success. The CxOs of all the OpCos joined the Group in Dubai for three days, from November 16th to 18th, to share their commercial and �nancial performance year to date, discuss and align on the 2014 Group strategy, and to hear about new trends within the telecom industry.

This is our third event of this nature, and it is something that I personally look forward to every six months. Having everyone together in one location opens the lines of communication, enhances mutual understanding, and reinforces a sense of team spirit that is unachievable by phone and email. It is something that we hope to do more often next year, as invaluable learning results from such meetings.

The theme for this strategic meeting was “Doing things di�erently, to do them better”. The Group chose this as our key message for the event, as we wanted to emphasize that although our strategy to become a top 50 telecom globally within �ve years remains the same, we need to improve the way we do things in order to get there. This includes improved Group-subsidiary interaction, more agile decision making, leaner cost structures, and an enhanced branding and PR e�ort.

The agenda for the meeting included our usual six-month performance and strategy review. However, there were a few additions to the program this time, one of which was the sharing of key learnings across OpCos. Each CEO was invited to share some of the main challenges faced in 2013 and the key takeaways. In my view, this was an excellent forum for us to learn from each other, and it provided guidance on how to handle similar situations across markets. We also did a team-building activity, where all participants across the Group and OpCos were divided into randomly selected teams, and tasked with completing a series of outdoor challenges. This sparked healthy and fun competition, and also helped to break the ice.

Telecom executives from well-established global telecoms also joined us to share their experiences with the team, covering topics such as small player evolution vs. giants, group-subsidiary operating models, and commoditization in telecoms in Africa. It was a tremendous honour to have Dr. Saad Al Barrack, former Zain CEO, and Tim Harrabin, former Vodafone Development Director, participate in the event, and o�er their support to LAP GreenN. It is remarkable to see how the Group has transformed since our last strategic meeting in May, and it is a testament to all the hard work and sweat that has been put in by the team. I appreciate all your e�orts, and look forward to reconvening in April 2014.

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WORD FROM THE GROUP CEO

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LAP GreenN's strategy for 2014Group CEO, Wa�k Shater, gave a warm welcome to the audience, and thanked them again for their attendance to LAP GreenN’s third strategic meeting.

He took the opportunity to share LAP GreenN’s key achievements in 2013, most notably conclusive settlement agreements with our largest and most long standing suppliers including Tecnotree and Huawei.

Also, LAP GreenN received enhanced support from the government in the countries in which we operate, with multiple ministerial visits to Ivory Coast, a visit from South Sudan’s Minister of Communication’s to LAP GreenN, meetings with the Minister of Privatization in Uganda and the establishment of a Steering Committee to take initiatives forward. We also received strong support from the Libyan Telecom Congress and the Ministry of Communications in Libya.

Wa�k also highlighted that there were signi�cant organizational improvements with cross-OpCo knowledge and opportunity sharing, the recruitment of experienced executives at the OpCo level and internal promotion from within the Group and OpCos. Operating performance with 2013 full-year forecasts indicate that we are on track to achieve YoY aggregated EBITDA performance improvement.

To follow up, Dimitris presented the 2014 strategy and targets with a reminder of LAP GreenN’s vision to become a top-50 worldwide telecoms operator in the next 5 years which the shareholders’ remain committed to. He outlined that the Group strategy for going forward focuses on further developing our existing operations through organic growth. He stressed that 2014 requires increased focus on sustained execution of transformation activities to deliver tangible progress.

The segmentation will be pursuing a more targeted, value-driven strategy for value growth. P&S portfolio developments should be focused to support ‘acquisition-led’ growth targets. Providing a natural evolution path to data-driven services, by introducing ‘smart-phone’ services to lower cost devices supports value growth objectives.

He believes that Enhanced PR activities are a strategic focus at both Group and OpCo level to deliver increased awareness and enhanced perception of LAP GreenN and its operations to a wider audience.

Monitoring and analytics are at the core of enhancing both Commercial and Operational performance.

Alliances and Partnerships represent a key tool to alternative ways of transforming both Commercial and Operating dynamics across our operations.

HIGHLIGHTS FROM THE GROUP

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HIGHLIGHTS FROM THE GROUP

Digital trendsMichelle Hirst, Manager, CEO O�ce presented on Global Digital Trends and the opportunities for LAP GreenN.

She opened by highlighting that the global digital ecosystem has monumentally evolved in recent years driven by several factors, speci�cally increased consumer appetite for digital products, emerging devices and the new multi-screen world, which has created a whole new set of user behaviours.

We now spend signi�cantly more time online daily, using multiple screens simultaneously to shop, watch videos, share information and pictures, and talk to each other. We are constantly connected through our screens and it has become our main medium for media consumption. TV no longer commands our full attention, as most people now watch TV with their tablets and mobile phones in hand.

Video OTT , cloud services, m-payments, m-Health SoLoMo, and many other digital services have rapidly emerged within the past 2-3 years, and resultantly, the digital value chain is becoming more and more fragmented. Though telecom operators have found it di�cult to adjust to this digital market evolution, they are now �nding many ways to pursue new sources of revenue and stickiness from their customers. Operators in both developing and emerging markets have invested and pursued digital services initiatives, creating their own digital subsidiaries or units. We are even seeing such a shift in LAP GreenN’s home market (Africa), with African operators launching apps stores, partnering with platform providers and conducting content deals. This is due to growing demand for digital content in Africa, despite a number of challenges, such as demography, lack of infrastructure, and limited localization.

Michelle concluded by saying that LAP GreenN needs to start exploring digital opportunities in each our of operator markets in, and it is not a question of if we should, but rather when.

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HIGHLIGHTS FROM THE GROUP

Emerging telecom trends

Keving McLoughlin, LAP GreenN Group CTO, said that Telecom Operators today are struggling with increasing costs, reduced margins and slow innovation. Key trends in the industry will enable Mobile and Fixed operators to leap-frog their competition.

Kevin de�ned few of the emerging trends. Convergence is “experience roaming across multiple screens” and by 2015, convergence will be de�ned around Ecoystems and Experience Roaming across devices. IMS is an infrastructure for multimedia services, delivering a User-Centric approach that enables Experience Roaming single sign-on access to same information and services, over multiple screens. For telecom operators the bene�ts of convergence are simpli�ed operations, lower costs, higher customer quality of experience, faster time to market, reduced churn and improved pro�tability.

SDN (software de�ned network) is the new buzz word of 2013 and is an emerging challenge from the IT Industry to the traditional telecom equipment vendors while Software De�ned Radios (SDR) and Single Radio Access Networks (SRAN) provide a scalable approach to network deployment, with double-digit TCO savings realized for LTE deployment.

He explained that as users and devices continue to exponentially increase, telecom operators face declining revenues for Voice, Messaging and Access services. As OTT/Digital Services drive broadband data growth, the evolution of Broadband connectivity requires sustainable business models to be enabled, to monetize data services, as the cost of delivering the tra�c has de-coupled from the Revenues. Global Mobile Industry Revenue Share (2003-2022) for the coming decade predicts 60-70% dominance of Digital Services (Data and OTT), predominantly at the expense of �xed and mobile Voice services with the Digital Services sector estimated to grow to over USD $50Bn by 2017 (CAGR 59.95%).

Traditional telecoms business models are under pressure, as OTTs revenue streams bypass operators whilst still using their infrastructure; operators must develop Digital Services infrastructure to share the pie. Telecom operators can establish their role in the Digital Services value chain, owning the customer, improving ARPU through new services, and being the enabler for OTTs.

On big data analytics, Kevin explained that the growth of Global Data is forecast to reach 40 Zettabytes by 2020 but how BIG is a Zettabyte? “Context” is the most valuable currency of the Digital Services era, where telecom operators are uniquely placed with detailed knowledge of their subscribers and can drive new revenue streams by marketing this data to 3rd parties, whilst simultaneously o�ering an enhanced quality of experience to their customers – resulting in lower churn rates.

To conclude he discussed reinventing the Telco. Traditional telecom operators were designed around tight vertical integration and rigid, in�exible processes but the basis of competition in the telecom sector has changed, from reliable delivery of a few services to �exibility and customization. Lackof agility due to vertical integration of telcos spawned emergence of alternatives. Telecom operators require new architectures and tools to compete in the Digital Services / OTT era where the measure of success for telco OTT initiatives should be based on user and revenue cross-over.

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South Sudan

Mohamed Ghad�, Gemtel CEOGhad� presented on Gemtel’s performance and its main achievements between January and October 2013.

Gemtel’s revenue increased by approximately 30% when compared to the same period in 2012, and the company attained a positive EBITDA. During the period, particular emphasis was placed on commercial activities, with the launch of aggressive media campaigns on local TV and in newspapers. In addition to this, new customer care centers were opened.

There were also notable technical improvements, with additional sites launched, and increased network stability overall. The Company also undertook training programs for its employees, and recruitment internally to �ll positions.

Ghad� closed by sharing some of Gemtel’s key learnings for the year, speci�cally the importance of synergies with the Group and maintaining solid relationships with vendors. He also mentioned the importance of CSR activities and developing a relationship with communities.

HIGHLIGHTS FROM THE OPCOS

Uganda

Ali Amir, UTL CEO Ali gave a presentation on UTL’s key achievements and key learnings in 2013.

He began by highlighting UTL’s �nancial performance for the 10 month period ending October 2013. UTL successfully decreased its cost of sales and OPEX by double digits, and signi�cantly saved EBITDA losses when compared to the same period in 2012.

Ali proudly shared that UTL has implemented new company values and the entire organization is now focused on supporting the commercial team to “wow the customer”. This has resulted in a more energized and motivated sta�.

UTL has also made signi�cant strides in terms of its network, with up time increasing to 96%, and the successful completion of power saving equipment trials. During the period, UTL also reported signi�cantly lower resolutions times for incidents.

The Company also started to place more focus on its Fixed and ISP business, with targeted o�ers, and in terms of mobile, has strengthened its distribution with more SIM and airtime selling outlets.

Ali concluded by emphasizing that people make things happen, and it’s important to make changes as they are required, “not tomorrow, now.”

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HIGHLIGHTS FROM THE OPCOS

Sierra Leone John Weir, GreenN SL CEO John gave the �nal CEO presentation of the day, providing an update on Ambitel’s launch plans. He said they have successfully built a strong, experienced team of telco executives with a high degree of local talent versus expats. He is con�dent that they have developed a unique launch proposition which will be very di�erentiating.

John then moved on to share the Ambitel’s key learning for 2013. He said in terms in business overall, it is important not to put all your eggs in one basket, and it is always bene�cial for operators in the market to strengthen their alliance, which in turn improves market conditions and regulation.

lvory Coast Abdulghani Ramadan, GreenN CI CEO

Abdulghani took the �oor after Ghad�’s presentation, to give a summary of GreenN CI’s year to date performance. Despite many challenges, GreenN CI’s revenue increase by approximately 30% year over year. The Company decided to place more emphasis on speci�c market segments, which proved to be successful, and also opened sites in four additional cities, namely Korhogo, Meagui, Man and Gagnoa. GreenN CI also implemented new policies and procedures, and kicked o� a project called “Great place to Work” which includes building refurbishments and enhanced internal communication.

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HIGHLIGHTS ON EMERGING TRENDS

Opportunities for Telecoms in AfricaDavid Tuza, Partner from Booz and Company, discussed commoditization in the global telecom industry, and the impact of this commoditization on Africa. He explained that mobile operators are �nding di�erentiated propositions increasingly di�cult to achieve, providing similar product o�erings and price points, which has resulted in price erosion and wide scale industry consolidation.

Booz conducted an in depth study on the topic, mapping 132 markets to commodity zones based on the spread in market share and ARPU amongst players in the market. According to Booz, the more converged the market share and ARPU, the more commoditized the market. Based on this approach, many African markets are at threat from commoditization.

David explained that evolution towards commoditization can be rapid and there are a variety of paths to commoditization. Booz indexed this trend and the pace varies across regions, with the Middle East and Africa commoditizing most rapidly.

David moved on to discuss the new tactic to tackle commoditization for Africa, and emerging markets more broadly, which is to conduct more in-depth customer segmentation. Human segmentation is about truly understanding how the customer generates value from the operator’s network and is a powerful addition to the arsenal which allows for careful and precise targeting of highly speci�c initiatives. He concluded by saying that the execution of this is the most challenging, but critical: operations need to defend their position by �ercely counteracting competitive actions, consolidate by building on their successes, and build new positions in new territories.

Tim Harrabin, senior advisor at Analysis Mason discussed the evolution of Small Players vs. Giants

Tim opened by discussing the challenges faced by big operators, such as an EBTIDA and cost driven focus, legacy (processes and procedures) and people. This therefore makes it much more di�cult for large operators to be innovative and take risks on disruptive products and strategies.

Small operators on the other hand, are much more �exible and more agile. They are not held hostage to legacy and EBITDA, and therefore it is much easier for a small player to increase their market share by 5%.

He used Oskar as an example of a small operator that was the third entrant and was very successful. When Oskar �rst entered the Czech Republic market in 2000, Karla Stephens Tolstoy, Oskar CCO decided that she would do things di�erently; as you could only purchase SIMs in Oskar stores, she designed the stores in a way that was very innovative at the time. He also discussed a promotion that was done in Turkey that was very disruptive at the time.

Evolution of Small Players vs. Giants

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HIGHLIGHTS ON EMERGING TRENDS

Group-subsidiary interactionGregory Garnier, Partner Middle East, Bain & Company, joined LAP GreenN to share Bain’s experience with Group-subsidiary interaction. He opened by stating that all large multi-country telcos struggle to de�ne the right size and role of the Group versus the subsidiaries. Orange, for example, has tried many models throughout the years, moving from centralized policies to sub-regional and then to regional clusters. There are a number of complexities that tend to arise with large Groups, such as a lack of consistency across markets, brands and portfolios, and the creation of multiple committees and support functions at the Group level. This in turn can create a feeling of Group invasion from the subsidiaries. Gregory went on to say that the best operating models rest on a clear understanding of how the Group adds value. He discussed 3 models in detail, speci�cally the “strategic architect”, the “strategic controller” and the “operator”, which give the subsidiaries di�erent degrees of business autonomy. The strategic architect provides guidance to its OpCos, but leaves the planning and execution to the markets, while the strategic controller drives and centralizes the planning and key decisions. The most extreme model is the operator, where the Group exercises the most control, de�ning all key activities and managing the execution. Like Orange, MTN is still trying to de�ne the role of the center and applies di�erent models for di�erent functions. Vodafone follows a similar approach-in terms of strategy, the Group centralizes the planning but the execution sits at the OpCo level, however in terms of procurement and �nance, the Group controls the entire process.

Gregory also discussed other examples including Telefonica, which has streamlined its HQ structure to maximize global and regional synergies, and Deutsche Telecom, which has a robust corporate governance model to ensure focus and accountability for results, and the business units have the ability to adapt and drive strategy, marketing and sales.

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It was an honor having Dr. Saad Al Barrak as a key speaker at our closing dinner where he talked about his experience in the Telcoms industry and o�ered his support to LAP GreenN.

Dr. Saad began by saying that it is a great pleasure to be associated with Wa�k and this young company that’s trying to turnaround and make history through making inroads into Africa, which is a great passion for him.

Dr. Saad shared with the team Zain’s success story how it went from a small operator to a giant. It was a monopolist for 16 years then when he joined and they took 50% of the Kuwaiti market, they decided to go international. The company was transformed very fast: the �rst initiative was co-branding with Vodafone where they had to reach the same standards in order to put their names together. Zain developed their 3 by 3 vision: in the �rst 3 years to transform from local to a regional operator then the following 3 years from regional to international operator and in the end to become global. He added that Zain went in 6 years from one operator in Kuwait with half million customers at the beginning of 2003 to 75 million customers around the Middle East and Africa in 23 countries and became the 4th largest mobile operator in the world by geographical size. He believes their success was because of Africa and quoted the Chinese proverb ‘wherever there is danger, there’s opportunity’.

He added that the Zain Group looked at Celtel at that time had a presence in 13 countries in Africa and was at a pivotal stage where it needed to be taken to the next level. Zain then signed the deal with Celtel which was of 3.2 Million dollars, the largest deal in the whole history of Africa. Dr. Al Barrak said that people thought they were wasting money in Africa when they started in 2005 with 5 million customers but when he left they were at 45 million in 2010. The EBITDA when Celtel was bought was no more than $300 - 400 hundred million dollars and went to almost $1.5million EBITDA in 5 years time. Later, the Group took over Nigeria and Madagascar.

Dr. Al Barrak said that today in terms of data and broadband, Africa is the highest growth market in the world and is approaching a trillion people in a few years time and it is very important that LAP GreenN has presence in 4 countries: Siera Leone, South Sudan, Ivory Coast and Uganda.

He added that Africa is the emerging market and the coming giant like the appearance of China and India at one stage, which have resources that needs to be managed well in order to create great value.

Dr. Saad aforementioned that Africa is a great opportunity and it is the Group’s chance to make history there, the only competitive advantage is the right people, great motivation, the crazy dreamers. He advised that the team and the way you manage them is the only sustainable advantage.

To know more about Dr. Saad Al Barrak’s success story with Zain Group, you can read his book ‘A Passion for Adventure: turning Zain into a Telecom Giant’.

HIGHLIGHTS FROM GUEST SPEAKER

DR. SAAD AL BARAK, FORMER ZAIN GROUP CEO

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Mark Shoebridge, Chief Fixed Line O�cer at UTL“These events are extremely important from an OpCo level. It gives us all a chance to synchronize with the group, close open matters one on one, get updates from our counterparts in other OpCos, and meet new team members. We all return focused and energized!”

Michelle Hirst, Manager CEO o�ce:“We were contemplating postponing the event until early next year, but I am really glad that we took the decision to have it when we did. Getting everyone together in one location reinforces team spirit, and achieves an enhanced level of communication that is unachievable over email and the phone. OpCo key learnings for 2013 and the team-building exercise were great additions to the agenda, and I think overall the team left feeling more energized and motivated.”

Shailendra Naidu Somarouthu, CCO at UTL:“I just joined the group six weeks back and this was my �rst semi-annual session. I am glad I attended this and I liked the way the whole event was organized. It gave me time to spend quality time with colleagues across Opcos & corporate teams as well as listen to thought leaders and learn from their experiences. I especially like Dr. Saad’s session and Mr. Tim Harrabin’s session. Simple but strong executable ideas are what I took away from these sessions. The team-building session was fun and helped me make new friends.”

Sateesh Ramoutar, Group Sales Director“The two days bring us all together, allowing us the opportunity to share experiences, challenges and opportunities. It gives all of us the sense that we are one team. You leave the event inspired, motivated and in full knowledge that we are on an incredible journey together

Alexis Indenge, Group Director Information Systems“The strategy meeting was very insightful; the team building activities were a great idea. We had a lot of fun!”

HAVEYOURSAY…

HAVEYOURSAY…

HAVEYOURSAY…

HAVEYOURSAY…

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A glance from the meeting

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A glance from the team building activities

This event would not have been a success without Hend Abdulwahed, Michelle Hirst,Jeren Alaghi (by picture order), the organisers, as well as Roxanne Franks and Lucy Bagasting. Thank you for all your great e�orts!

We look forward to seeing you all again in 2014, with new challenges and successes.

GreenN Shoots Special Edition editorial committee:GreenN Shoots Special Edition is a semi-annual newsletter prepared by Hend Abdulwahed and Michelle Hirst from LAP GreenN. For any feedback or enquiries, please contact: media@lap-greenn.com

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Doing Things Di�erently

To Do Them Better