Celtel goes Zain in global rebranding exercise

Telecoms

On 8 September 2007, MTC, the Africa and Middle East mobile network operator and owner of Celtel, presented its new brand identity, Zain, in Bahrain, writes Andrea Bohnstedt. ‘Zain’ translates into ‘nice’ or ‘beautiful’ in Arabic, and the brand identity ‘Zain’ had been developed in a meticulous 18-month process with keading consulting firms and advertisers. It has also been subjected to a rigorous process of testing with consumers and was found to evoke positive connotations not only in the Arab region, but beyond. In the launch, Chief Operation Officer, Dr. Saad Al Barrak, emphasized the group’s intention to combine its Arab roots with an ambitious global outlook. Zain represents the company’s intention to take the group global, and connect its customers to the rest of the world. “We are proud of our Arabic heritage, but we don’t want to be imprisoned by it”, says Dr. Saad Al Barrak, who heads what is now the largest private company in the Middle East.

MTC’s operations have expanded exponentially in just a few years: From being a single operator in Kuweit in 2003, newly branded Zain now has over 32 million customers in 21 countries. Zain aims to consolidate the various Middle Eastern operations under a common identity, and the change will become effective immediately for the group’s Mobitel in Sudan, Fastlink in Jordan, and MTC-Vodafone in Bahrain and Kuweit. The new operation in Saudi Arabia, for which the license had been awarded in July 2007, will also start up as Zain in early 2008. Iraq’s MTC Atheer will be rebranded as Zain in the near future.

Given the diversity of former MTC’s Middle East brands, the introduction of a unified brand identity in a rapidly expanding company is an obvious step. However, a key factor in the group’s expansion has been the acquisition of Celtel, which added mobile operators in 14 sub-Saharan countries to the portfolio and represents over 70% of the group’s operations. Its brand equity, i.e. the value of the brand itself, is estimated at over US$1 billion. Celtel has underpinned its strong brand identity across the continent with the integration of its networks through the cross-border ‘One Network’ that removes all roaming charges for Celtel connections and effectively gives Celtel customers the benefits of a domestic network across country borders. Kicked off in the East African Community (EAC), i.e. Tanzania, Kenya and Uganda, the network has now been expanded to include six countries, and the addition of one of Africa’s largest markets, Nigeria, is envisioned soon. The market unsurprisingly questions the value of abandoning this strong brand in favour of a new one that has yet to be filled with life. In addition, two Celtel operators in sub-Saharan Africa, Kenya and Nigeria, had just undergone a rebranding process after Celtel took over existing operators, and this is bound to create further confusion for customers.

In the press conference to launch Zain, Al Barrak was emphatic that Zain will supersede all previous brands in the group. However, Tito Alai, the Group’s chief commercial officer, was more cautious. Zain will be the group’s new face towards investors, capital markets, regulators and other actors, but this does not imply that the Celtel brand will be phased out with immediate effect. “We will do what is right for each market,” he emphasises.

The discussions in the Zain launch press conference certainly showed that Arab observers expressed reservations over what is perceived as the group’s globalised outlook, citing fears that it would loose its Arab roots. These concerns as well as the fact that Celtel was created as an aspirational brand to speak to Africa’s emerging middle class – ‘Making Life Better’ ‑ show that extending the brand Celtel to the Middle East operations would not have been advisable.

Although Alai, who is not just the architect of new Zain, but also the brain behind the creation of Celtel, is confident that the brand Zain should work just as well in sub-Saharan Africa as it will in the Middle East despite its Arab origins, he indicates that Zain has not yet come to a final conclusion how to deal with the group’s African members, and will continue to assess its options. It appears that Zain has also not yet come to a final conclusion whether new acquisitions in sub-Saharan Africa will immediately rebranded Zain or Celtel. Another Africa-specific concern, however, could be put to rest: Given that in many towns and villages, entire buildings are painted in the colours of competing mobile phone operators, the new Zain logo’s dark background would have suggested a fairly sombre outlook after Celtel’s bright red and yellow. So the fact that Zain’s key colour will, in fact, be the turquoise green of the swirling logo and that the logo will also be used on a light underground should provide a more cheerful outlook for local construction.