2017 Annual report Emirates Integrated Telecommunications Company PJSC P.O. Box 502666 Dubai, United Arab Emirates Tel: + 971 (4) 360 0000 Printed on Scheufelen FSC Code: March 2018 FSC-C009951 – 170 and 400 g/m2 Annual report 2017 Annual Report 2017 Table of contents Chairman’s message 04 CEO’s message 06 Our Board of Directors 10 Our management team 11 Highlights 12 Marks of distinction 14 Financial summary 16 18 ٢٠١٧ Strategic review Strategic guidelines for 2018 and beyond 20 Operational highlights 22 Corporate governance 26 Sustainability and community engagement 30 Consolidated financial statements 36 Table of contents 03 Annual Report 2017 Annual Report 2017 The UAE is at the core of all Chairman’s message our strategic goals, which seek to contribute to the nation’s Beyond connectivity: building a smart economy sustainable growth through Dear Shareholders have taken a vital role in the digital transformation. development of the UAE from On behalf of the Board of Directors multiple angles – and this is a and IT managed services. Moving conscious of the need to maintain of the Emirates Integrated commitment that we have every forward, three new divisions will our advantage in this area. Telecommunications Company intention to continue. The UAE enable the development of a PJSC (EITC), it is my honour and is at the core of all our strategic strong portfolio of products and In terms of our business privilege to present our financial goals, which seek to contribute to Ahmad Bin Byat services while consolidating all our performance during 2017, our results for the year ended the nation’s sustainable growth infrastructure operations. revenue of AED 13.0 billion was Chairman December 31, 2017. through digital transformation. the highest ever achieved by the In the same vein, we have also company. Net profit after royalty We are living in an era of rapid The International Monetary Fund promoted two bright Emirati amounted to AED 1.7 billion, change – so much so that at times forecasts an economic rebound for leaders to the positions of deputy equating to earnings per share of it is hard to believe that many the UAE in 2018. EITC plays a vital chief executives, each with AED 0.38. The Board of Directors of the technological advances role in the national economy, and oversight and mandate on specific has recommended a final annual that have come to define our life, we are committed to maximising areas. We believe these changes dividend of AED 0.22 per share, business, and the global economy our contribution to its growth. will help us achieve EITC’s ambition bringing total dividend for the year have occurred over only the past to lead the digital transformation to AED 0.35 per share. few years. In line with this approach is our and keep us at the forefront of intense involvement in creating economic development in Dubai In closing, our strategic goals are This is equally true for our own smart city and smart district and the UAE. aligned to national plans to reinforce company, as the EITC of today is capabilities. We have no fewer the UAE’s position as a global hub becoming virtually unrecognisable than 19 smart services under A strategic focus in a fast changing and a leader in the application of from the organisation that was delivery, from smart buildings to world is mandatory and the telecoms and smart technology. established in 2005. This trend smart signage. As our market Board plays a vital role. Our accelerated during 2017 as our environment transforms, so must Board members have held several I look forward to creating value and company continued to evolve and we, maintaining the industry strategic planning sessions, with strengthening our relationships mature, building upon a strong leadership that has always been the value of strategic thinking with our shareholders, strategic foundation with new initiatives our hallmark. This will happen ranking in importance with our partners, customers, and and organisational changes that through the great opportunities emphasis on sound governance. especially our management are dramatically altering the way brought by the Internet of Things, and employees who make such we do business. Throughout this big data, data science, robotics, Of course, people are always an invaluable contribution to process, we have created and will and artificial intelligence. at the heart of the success of our continued progress. Their continue to create exciting new corporations, so cultivating the collective effort underpins our benefits for our customers, in This philosophy was highly right talent, nurturing potential success and contributes to the turn adding substantial value evident in our structural changes leaders, and enabling high levels development and prosperity of for our shareholders. during 2017, which were part of a of employee engagement are key our organisation and our country. strategic transformation that will priorities. The world of tomorrow I thank my fellow Board members EITC is still a young company. enable expansion into new growth is inextricably linked to a talented for their constant dedication, Since our foundation, we areas such as ICT, data centres workforce, and we are very stewardship, and support. 04 Chairman’s message Chairman’s message 05 Annual Report 2017 Annual Report 2017 We are now a connectivity CEO’s message and non-connectivity business – with equally dynamic telco and A foundation for tomorrow non-telco operations. Dear Shareholders and highlight how growth in this The ICT Solutions Division will CEOs, each with oversight and segment is under pressure. As provide UAE government entities mandate on specific areas, and As our Chairman has so clearly such, we accelerated our exciting and private enterprises with Saleem Al Blooshi was appointed noted, 2017 was a year of change digital journey where our focus advanced end-to-end infrastructure Chief Infrastructure Officer. We for EITC – a year that, in times to is on both the enterprise sector, and services – including enterprise also strengthened our strategic come, may well be considered as expanding into ICT, and the networks, security, data centre capabilities in 2017, appointing pivotal in the growth, direction, and consumer sector where we will services, and Cloud services Eddy Skaf as Chief Strategy Officer Osman Sultan influence of our company. grow our digital, lifestyle, and applications. who will oversee the development Chief Executive Officer and entertainment services. and implementation of EITC’s We now have two customer-facing The Digital Lifestyle and overall corporate strategy. brands, a new organisational The beginning of a new era Innovation Division will focus on structure, and we are moving A clear reflection of our strategic the development of products and We believe our current business beyond our traditional services transformation in 2017 was the services for UAE consumers – model will drive company-wide of voice and data connectivity. change in our brand identity. The including video and smart-home growth in the coming years. Our entire industry is changing adoption of our company name services. We are moving to different in the face of the fourth industrial EITC as our primary identity ecosystems, and the key word revolution, with the Internet of reflects the duality of branding The Infrastructure Division brings for these ecosystems will be Things, big data, and artificial that took effect during the year. all infrastructure related operations ‘partnerships’. intelligence taking centre stage. du – our original brand and for under a single EITC umbrella. so long our public face – has now Notable public-private However, the increased reliance been joined by the Virgin Mobile We are now a connectivity and partnerships created in 2017 on the internet has fundamentally brand, a distinctive new all-digital non-connectivity business – were, in addition to Dubai Smart changed the way people live, work, offering that was the first of its kind with equally dynamic telco and City announced earlier, the Dubai and communicate – and in turn, in the UAE market, complementing non-telco operations. We are Silicon Park, for which EITC is we must change the way we do our traditional du products and approaching potential private the main system integrator of business accordingly. The UAE’s services while catering to changes enterprise and government clients all smart services; the Dubai mobile penetration rate is already in customer expectations and with end-to-end solutions that Sports City partnership, as well one of the highest in the world, demands for certain segments handle all their needs, combining as a public-private partnership reaching 228 per cent at the end of the market. telecom connectivity with IT with the Ministry of Interior and of March 2017, according to the solutions. Our objective is to Injazat to deliver Hassantuk, a Telecommunications Regulatory In line with our intention to protect our core telecom business smart monitoring alert and control Authority. Subsequent data shows transform our company, EITC and grow our adjacent businesses. system for buildings in the UAE. that more than 80 per cent of was restructured and we added We are proud of our involvement mobile phones registered on the three distinct business divisions, I am proud to report that three in developing the Dubai Pulse country’s mobile networks are each with clearly defined strategic bright Emirati leaders were Platform, launched in 2016, where smartphones. objectives and equally well- promoted within the company