Orange Annual Report 2014

a letter from the Chairman diminishing revenues, with one notable example being the halting of one of our key projects — the “JADI” fiber optic network project — due to the Syrian crisis. Combating such challenges necessitated fundamental measures, including a major rethinking of our corporate strategy and organizational structure, with the overall objective of transforming these challenges into potential opportunities in as much as possible. This was only possible by taking measurable steps toward reducing our operational costs to accommodate the realities of the region and formulating new offers and services to boost our revenues while still adhering to our longstanding, consumer-centric philosophy. Given our unwavering commitment to continued development, we have allocated a considerable portion of 2015’s budget to the establishment of our 4G network, which we introduced last year as part of a discovery phase in ten locations throughout Amman. After pioneering the introduction of the 3G+ technology in 2010, our investments in our network since year 2000 to date have totaled JD one billion. We are mere months away from commercially launching our 4G services nationwide. Moreover, in our efforts to integrate customer feedback into the research and development process, we continued to gauge the experience of our customers through our Customer Testing Center (CTC) in Amman, where most of our products and services undergo extensive customer trials prior to their launch. Meanwhile, a year of strategic adaptation our Technocenter continues to serve as a one-of-a-kind innovation center in the Middle East, Asia and North Africa region, delivering Dear Shareholders, cutting-edge technologies and concepts geared toward various consumer demographics. One such service was “Orange Cloud”, The end of the year always constitutes an opportunity to address the first service of its kind in the Kingdom and within the Orange you all through the pages of this annual report. It gives me great Group in the Middle East, Asia and North Africa region. pleasure to take you through the key milestones, achievements As a testament to our dedication to service quality and efficient and financial results of Jordan Telecom Group-Orange Jordan operational management, the year 2014 saw Orange Jordan for the year 2014, and to share with you our aspirations for the renew its ISO 9001:2008 certification in the arena of quality coming year. While the facts outlined in this report reveal that management after meeting all of its established criteria. 2014 was replete with unavoidable challenges that markedly The challenges we faced throughout the year could not deter our affected the sector as a whole, they also demonstrate our resolve various endeavors in the arena of social responsibility. In 2014, and ability to weather all of these challenges, which continue to we continued to invest in and support a number of initiatives curb the growth of our industry. that delivered measurable value to different segments of local The local challenges that hindered our financial growth in 2014 communities, targeting the three primary clusters of education, were manifested in different ways. Perhaps the most prevalent sports and poverty. Our efforts to instill the principles of social were excessive competition, the diminishing purchasing power responsibility in the private sector date back to the year 2000, of Jordanians and the need for continued investments in our and our efforts in 2014 have allowed us to maintain our role as network. These pressures were further exacerbated by the trendsetters in this regard. ramifications of government policies enforced prior to and during In closing, I would like to extend my gratitude to Orange Group the year, particularly its rather sudden decision in 2013 to double for their continued support during these tiring times. I would also the special taxes imposed on mobile services and to double the like to thank our customers for their continued loyalty to our brand sales tax on mobile handsets, which markedly compromised our and to our shareholders for their steadfast trust and support of revenues the following year. the various decisions made by our Board of Directors, whose An even greater challenge we faced came in the form of the members were re-elected in September 2014. It would be all but government’s highly inflated valuation of Orange Jordan’s impossible to overstate the value of the contributions made by our 900 MHz spectrum license, which forced us to renew this license board members and our executive management team, headed for a period of 5 years as opposed to our original request by our CEO, Mr. Jean-Francois Thomas. Last but not least, I for a 15-year renewal in order to avoid any potential negative must acknowledge and commend the combined efforts of our repercussions on our customers, employees, shareholders and teams across Jordan, whose dedication and positive spirits form partners. The decision, though necessary, was made under strong the basis of our ability to adapt to these rapidly changing market protest, as the TRC’s valuation of the license was blatantly unfair, dynamics. even if it came with a technology neutrality clause, for which we I am beyond confident that 2015 will see us demonstrate our had not originally applied. Our request was to simply renew our continued ability to weather the ramifications of the aforementioned 900 MHz license for a period of 15 years — a request that the challenges and to continue operating within a destabilized region, TRC had granted to another operator at a pervious date. marching onwards to achieve the lofty targets we have established The unfortunate circumstances surrounding the renewal of our for this vital industry. We will continue to be a reference operator. license were further compounded by the fact that we were not We will work tirelessly to maintain our pioneering position in the given adequate notice by the TRC regarding its intentions to utilize market and to deliver an unrivaled customer experience, all the the 900 MHz more efficiently, and while we support the notion while continuing our efforts to elevate the quality of life for various on principle, we take serious issue with both the approach and segments of the local communities. As in previous years, we the final valuation proposed by the government. The Board of will continue working towards realizing the vision of His Majesty Directors and the executive management will continue to maintain King Abdullah II, which stems from the firm belief that Jordanians their protest, which is why we have placed the matter in the hands deserve the absolute best. of our national courts, whose judges are known for their fairness and integrity. sincerely, The escalating repercussions of the “Arab Spring” were Dr. Shabib Farah Ammari equally damaging, contributing to rising operational costs and Chairman of the Board of Directors of Orange Jordan 2 a letter from the CEO Our efforts to broaden the scope of broadband internet applications did not stop at introducing new technologies. In an effort to embrace the proliferating demand for data usages, such as high- definition video streaming and cloud storage, we revamped our entire lineup of fixed Internet packages to offer unlimited download capacities. We also continued to make fundamental enhancements to the infrastructure of our fixed network in order to provide a more consistent and stable broadband experience. This was shortly followed by the launch of “Orange Cloud” service, which offers our subscribers free online storage, and the “My Orange” application, which allows Orange subscribers to access many of our services directly from their smartphones. This proactive approach also saw us launching or renewing a number of key offers directed at various consumer segments. One such offer was “Ghair Shekel” our flagship mass offer that delivered the best possible value available on the market. It offers a substantial combination of Orange’s voice and data services at a very low price point, making it ideal for budget-conscious or data hungry customers. Moreover, we maintained our longstanding track record of catering directly to members of the Jordanian Armed Forces and their families nationwide by adding new bundles and features to our “ArmyCell 2” offer. We also continued to serve Dear Shareholders, Jordanians residing outside the capital through our “Ezwaty Super Line”, which comes with unparalleled features and reduced tariffs. It is with great pleasure that I address you all through the latest Given our continued focus on modernizing Jordan’s corporate edition of the Orange Jordan annual report, highlighting our key landscape, we continued to expand our portfolio of corporate achievements during the year 2014. partnerships in 2014. Our efforts resulted in three major contracts This past year has been marked by a number of unfavorable signed with two of the leading real estate projects in the Kingdom, market conditions that did not work in the industry’s favor. The the “Abdali Boulevard” Project and “Saraya Aqaba”, as well as most prevalent is perhaps the excessive competition in the local Jordan’s National Airline, “Royal Jordanian”. These large-scale ICT sector, which was further compounded by the fact that many partnerships will see Orange Jordan leveraging on its longstanding services are fast approaching market saturation. Rising electricity expertise to deliver an integrated infrastructure of voice and data costs, increased taxation and regulatory hurdles have

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