Years of Growing Together

YEARS OF GROWING TOGETHER Annual Report 2016 Etisalat Group | Annual Report 2016 YEARS OF GROWING table of content TOGETHER 04 Key Highlights of 2016 32 Etisalat group’s Footprint 35 UAE Business snapshots 07 41 Saudi Arabia 43 Egypt Chairman’s statement 45 Morroco 10 49 Nigeria 52 Pakistan Board of Directors 12 54 Etisalat Services Holding 56 Afghanistan Our Journey 14 57 Sri Lanka 58 Thuraya GCEO’s Statement 18 61 Human Resorces Management Team 20 65 Corporate Social Responsibility Strategic Pillars 25 68 Corporate Governance Key events of the year 26 71 Enterprise Risk Managment Operational Highlights 28 75 Finalncials 144 Notice for General Assembly Meeting Head Office: Etisalat Building Intersection of Zayed The 1st Street and Sheikh Rashid Bin Saeed Al Maktoum Street P.O. Box 3838, Abu Dhabi, UAE 02 03 Etisalat Group | Annual Report 2016 YAR R key highlights of 2016 TR 162 52.4 Million AED Aggregate Billion subscribers Revenue 26.3 AED 80 Fils Billion Dividend EBITDA per share 10.5 8.4 AED AED Billion Billion CAPEX Net Profit 04 05 Etisalat Group | Annual Report 2016 YEARS OF GROWING TOGETHER business snapshot Etisalat Group continued to excel and deliver exceeding customers’ expectations. We aspire to strong performance and value for its shareholders achieve this through the continued investment in our and customers, despite the challenges facing the networks and provision of innovative service offerings, telecoms industry today. ensuring that we provide our customers with the best possible experience. At the same time, we have Our aspiration is to be the leading and most admired continued our practice of high cash generation, so emerging markets telecom group by consistently and that we can continue to reward our shareholders pro-actively serving our customers with a common and grow our business. We have sustained a set of brand values based on innovation, customer generous dividend programme with close to AED 20 centricity and building trusted relationships. This is billion returned to shareholders in the past 3 years, evidenced by our key strategic pillars of owning and including 10% bonus share. managing an attractive, well balanced portfolio of assets; providing differentiated and innovative service Over the years, we have maintained a high level offerings that leverage our high quality infrastructure of capital expenditure to support wider coverage, and networks; and a superior customer experience. higher speeds and greater capacity in our networks. Despite a challenging set of circumstances facing the We believe that voice is still a growth area that telecoms industry today, Etisalat Group continued we intend to tap into with the continued upgrade to deliver strong performance and value for its of our networks; however our primary focus is on shareholders and customers. In 2016, we accelerated securing a leadership position in the more lucrative our investments in networks and partnerships to data segment. To that end, we have in the recent enhance our market positioning. Being a supporter past invested in spectrum licences in Egypt, Morocco, of the Smart City concept, the partnerships with Mauritania, Pakistan, Afghanistan, Benin, Niger, Togo Dubai Parks and Resorts, are in line with our digital and Cote D’Ivoire to support our push into mobile transformation strategy that Etisalat considers a data services and to support future growth. priority to shape and advance Smart Cities in our For 40 years, Etisalat has helped the UAE sustain its mature markets. We will continue to focus on creating position as the region’s hub for business, trade and the world’s best networks in all the markets that we foreign investment by providing reliable, high quality operate, and in delivering long-term value for all our services. This was accomplished through Etisalat’s stakeholders. We have also demonstrated our next- heavy investment in advanced world class networks generation capabilities through our role as Premium where both fibre-to-the-home (FTTH) and LTE roll- Partner of Expo 2020 Dubai. We will continue to out exceeds 92 percent and 96 percent coverage of focus on creating the world’s best networks in all the the population. Due to these investments, the UAE markets that we operate, and in delivering long-term today demonstrates leadership in regional technology value for all our stakeholders.We have also made innovation and deployment, and leads the world in good progress on trials of our 5G network in the terms of high-speed broadband penetration. UAE, an investment that will enable our businesses to achieve transformational growth by leveraging the In the years to come, Etisalat Group plans to lead Internet of Things and The Cloud. the way in terms of growth and innovation within The Etisalat Group business model continues to the UAE’s multi-billion-dollar telecom market, with be guided by the central principle of meeting and particular focus on the ICT segment. 06 07 Etisalat Group | Annual Report 2016 YEARS OF GROWING TOGETHER “Digitization is the future that will bring larger value to our customers and shareholders.” Eissa Mohamed Al Suwaidi Chairman of the Board 08 09 Etisalat Group | Annual Report 2016 YEARS OF GROWING TOGETHER chairman’s statement The telecommunication industry never stands still consolidated revenues, AED 8.4 billion net profit after ‘Year of Giving’ Etisalat will continue its support to continuous support of Etisalat, represented by HH and neither does Etisalat Group. We have witnessed royalty, 50% EBITDA margin, dividend per share of 80 the communities where we operate which reflects the Sheikh Khalifa Bin Zayed Al-Nahyan, President of the unprecedented change in the forty years since our fils, and maintained our high credit rating. Meanwhile, aspirations of our generous leaders. UAE, Sheikh Mohammed Bin Rashed Al-Maktoum, journey began. All services we enjoy today were only Etisalat has been included in the international Vice President and Prime Minister of the UAE, and As we look ahead, we see continued success for ideas in the making back in 1976, transitioning from financial indexes attracting international funds. All of Etisalat Group, we will always assure a healthy ruler of Dubai, and Sheikh Mohammed Bin Zayed simple wired voice and internet access services, into this will contribute positively towards asserting our portfolio that brings synergy to the group and value Al-Nahyan, Crown Prince of Abu Dhabi and Deputy rich fixed offerings and total mobility solutions, position as a telecom leader. to the shareholders, we will capitalize on our great Supreme Commander of the UAE Armed Forces. a shift into ubiquitous connectivity that was Etisalat plays an important role as one of the talent and distinguished assets to generate returns Finally, I would also like to extend my appreciation to aggravated by the proliferation of smart devices, a contributors to the national economy of the and deliver high quality products and services. Our our customers for their trust in us to deliver the latest revolution that has commoditized connectivity and UAE, either directly through its solid financial focus is on the digital transformation, and we will technologies and innovations, and to our shareholders moved our industry into a new era. performance and deployment of world class telecom steer all efforts towards enabling, delivering, and for their ongoing support, which is the main Throughout our journey, we have accomplished a infrastructure as key enabler for economic progress, leading it. motivation that drives us to work harder to achieve a renowned record of technological firsts; the same better future. or indirectly through its strong leadership position At the end, I would like to extend my sincere thanks were only collateral to our sincere efforts to harness in the telecommunication and ICT sector; locally, and gratitude to our wise leadership, for their the power of technology in order to bring the best regionally and internationally. As an example, possible and the latest available to our customers. Etisalat’s continued investment in fiber-to-the- Only recently, we were one of the first few telecom home has supported the UAE to remain a global operators in the world to conduct live 5G trials, driven leader in fiber optic connectivity. Moreover, Etisalat mainly by our plans to enable the society of tomorrow is fully aligned with the government ambitious that revolves around the Internet of Things. agendas and is determined to sustain its position as Eissa Mohamed Al Suwaidi We are fully vigilant of the rapid changes in our the government-trusted associate, we are the EXPO Chairman - Etisalat Group industry and we are adamant to stay at the forefront 2020 telecommunication and digital services premier by embracing the inevitable change; we are facing a partner, and will deliver far and beyond to support digital shift that dictates the development of digital the UAE in realizing its 2021 vision. services and their associated ecosystems. A massive On a related front, we also continued our mission opportunity for telecom operators that brings new to enhance the lives of people and communities challenges but great benefit, digitization is the new where we operate. As a responsible corporate citizen universal game; it is the future that will bring larger Etisalat Group is committed to securing the trust and value to our customers and shareholders. loyalty of people in the communities we serve; we see It is time to reflect on our activities in 2016, starting ourselves as their partner, not just a service provider. with our Group restructuring which has enabled us In Egypt Etisalat has helped bring clean water to to review our operations and introduce effective half a million people, along with many initiatives to improvements, including key steps towards our promote education, health and the environment. This portfolio optimization and the expansion of licenses all contributes to securing long-term, sustainable in selected countries.

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