x Abu Dhabi, UAESaturday 20 January 2018

Zain wants name preserved if company is purchased

Executive says that if the Kuwait-listed telecoms operator is acquired it will "fight" to preserve its $2.9 billion brand name.

BEIRUT // Zain Group has spent about US$500 million (Dh1.83 billion) building its brand and will "fight" for the preservation of the trademark if the company is acquired by a rival, a senior executive says.

The Kuwait-listed telecommunications company, in which the UAE's Etisalat is eyeing a controlling stake, spent more than $50m on advertising last year. It is the biggest advertiser in the Arab world by spending, according to the Pan Arab Research Center.

That has helped it build a brand valued by Brand Finance at $2.9bn, making it the second-most valuable brand in the GCC after Emirates Airline, which is valued at $3.5bn.

"A brand that is three and a half years old has a market valuation of $2.9bn," said Antoine Aboukhalil, the director of corporate communications at Zain Group. "And what did we spend? Peanuts."

Mr Aboukhalil said Zain's total spending on advertising and marketing was "a figure of $400m to $500m". This, he said, equated to a strong return, given the $2.9bn brand valuation.

"The return on our investment is five to six times the [brand] valuation we had," said Mr Aboukhalil, who was speaking on the sidelines of the Mena Cristal advertising conference in Lebanon.

The Zain brand was launched in September 2007, when MTC Group announced it would change the name of its various telecoms assets. The move resulted in companies such as MTC Vodafone in Kuwait and Bahrain, Fastlink in Jordan and Mobitel in Sudan being rebranded to Zain.

The total spending on advertising and marketing includes fixed costs such as changing shop fronts, business cards and stationary, as well as advertising, marketing and launch parties.

"To develop the brand, we have an agency [hired at a cost of] a couple of million dollars, out of the UK. We had rebranding launch parties, which cost a couple of million dollars. In Africa, when we launched the brand there, just the launch parties alone were $15m."

Zain has a higher brand valuation than Etisalat, which is studying an acquisition of the Kuwait-listed company.

According to Brand Finance, Etisalat's brand is worth $2.6bn, while the Saudi brand STC and the Qatari brand Qtel are worth about $2.4bn each.

The proposed acquisition of Zain by Etisalat or another suitor had not caused Zain to cut back its spending on marketing, Mr Aboukhalil said.

"It's business as usual … Last week they were shooting seven ads in Beirut … We're a brand-led company. And the more investment in the brand, the more the value [of the company]," he said.

"We spent in 2010 in excess of $50m in the region on advertising. It could be $60m or $70m, I believe … The numbers haven't come in yet. And this year it could be anything, if not more."

If Zain was bought out, the acquisition partner would be unlikely to change the brand name, Mr Aboukhalil said.

"It's really up to the owners to decide … Whoever acquires us is not going to change the brand tomorrow," he said. "Assuming that it is sold … We'll be fighting to keep it."

In the region, Zain works with the advertising agencies Saatchi & Saatchi, and JWT, while Mindshare is responsible for its media buying.

Mr Aboukhalil said, however, that he rarely used external public relations (PR) consultants. "I don't even deal with PR agencies. I find them ridiculous," he said. "I find myself spending more time correcting their work."