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Etisalat Group’s net profit rises 15% to Dh6.7b in 2012

Group added 21 million subscribers last year to take total subscriber base to 139 million

Gulf News

Dubai: Emirates Telecommunications Corporation (Etisalat) Group on Tuesday said its net profit after royalty in 2012 increased by 15 per cent year on year to Dh6.7 billion, helped by the partial disposal of an investment in Indonesia’s third-largest mobile phone operator XL Axiata and lower impairment losses related to investments in Pakistan and Sudan.

The group’s consolidated revenues increased by just two per cent to Dh32.9 billion.

As per the new royalty fee structure, Etisalat paid Dh6.45 billion last year compared to Dh5.84 billion in 2011.

The operator said the decline in revenues is mainly attributed to decrease in voice revenues in both mobile and fixed segments that were mostly compensated by growth in internet and data segments.

Revenues from internal operations grew by 11 per cent to Dh9.4 billion, representing 29 per cent of group consolidated revenues.

“Net profit during the year was mainly impacted by three items. These relate to the new royalty scheme that was applied last year, profit recognised on disposal of asset in XL Axiata and impairment charges related to investments in Pakistan and Sudan,” the telco operator said on the Abu Dhabi stock exchange website.

The net impairment losses amounted to Dh2.83 billion while impairment losses in relation to the group’s investments in PTCL amounted to Dh2.36 billion .

The group added 21 million subscribers last year to take the total subscriber base to 139 million, registering a year-on-year growth of 18 per cent.

Upon ratifying the results, Etisalat Group’s board approved a full year dividend of 70 fils subject to shareholder approval.

In the UAE, subscribers grew eight per cent year-on-year to nine million.

Mobile subscribers grew to 7 million, registering a growth of 12 per cent but fixed line subscribers fell six per cent to 1.1 million.

The telco operator attributed the decline to the successful migration of customers to eLife segment (double and triple-play customers) that grew by 46 per cent surpassing half a million customers.

Fixed broadband subscribers grew by 8 per cent to 0.8 million.

Etisalat UAE revenues fell one per cent year on year to Dh22.7 billion.

“UAE telecoms market is likely to undergo a transformational shift facilitated by availability of high speed broadband and growing competitive intensity as demonstrated by the launch of per-second billing options by Etisalat — which has so far served as key selling proposition for du,” Bhanu Chaddha, senior research analyst at IDC, told Gulf News.

In 2013, he said that both the telco operators in the UAE will focus on services based competition wherein offering better customer experience and creating differentiation through digital services will remain key factors for success.

Revenues from international operations grew by 11 per cent to Dh9.4 billion, representing 29 per cent of group consolidated revenues.

Consolidated capital expenditures declined year-over-year by three per cent to Dh4.2 billion resulting in capital intensity ratio of 13 per cent.

The operator said the capital spending focused on capacity and coverage and deployment of 3G networks and expanding LTE rollout. In the UAE, capital spending increased by two per cent to Dh1.8 billion while capital intensity ratio remained at eight per cent, the same level as last year. Capital investment in the UAE focused on enhancing capacity and ensuring 4G leadership.