Dubai: Spurred by a heady growth in its mobile subscriber base, Emirates Integrated Telecommunications Company, (du) reported 106 per cent growth in fourth quarter net profits, totalling Dh431 million. It added 252,000 active mobile subscribers during the quarter, taking total mobile subscribers to 4.3 million. Chief executive Othman Sultan said the company now has a 40 per cent market share in the mobile segment.
The company saw a significant boost in yearly net profits as well, after royalties to the government were decided at a much lower rate than du had provisioned for. The rate of royalties came down to 15 per cent of net profits, from the expected 50 per cent. Competing operator etisalat has been and continues to pay 50 per cent of its net profit to the government in royalties.
Du's yearly net profit grew by 132 per cent to Dh1.22 billion before royalty. Its revenues peaked at Dh7.07 billion, a 32 per cent increase from 2009's Dh5.3 billion, while earnings before income tax, depreciation and amoritisation (EBITDA) was Dh2 billion.
"Our revenues benefited not only from customer additions but also from increased usage, particularly data given the rapid take up of smartphones in the UAE, leading to one of the healthiest average revenue per user levels in this region according to financial analysts," Sultan said. Data usage accounted for 10 per cent of mobile revenues.
Simon Simonian, tele-communication analyst at Shuaa Capital, said the results were "fantastic, across the board".
"They ended the year on a strong positive note. They've been delivering good results but these numbers were exceptional. We have to revise your forecast for 2011 but obviously, you have to expect some easing in growth. But we'll see more of the same," he said.
Infrastructure deal
The long-awaited infrastructure sharing deal between etisalat and du is reaching its final stage as du's Sultan said the company would be launching its fixed-lines services across the country in a "controlled" manner in the second quarter of this year. "The technology is running. It's about processes which are very complicated," he said. The service is expected to launch nationwide in the second half of 2011, after "glitches are minimised."
Chairman of du Ahmad Bin Byat said, "We entered 2010 hoping to see a return to the positive sentiment that drove the UAE economy so successfully in recent years. We were not disappointed."
Strong subscriber acquisition rates continued to drive growth in mobile revenues, which reached Dh5.3 billion for the year 2010, up 43 per cent compared to full year 2009 of Dh 3.7 billion.
Du saw a 89 per cent increase in the number of post-paid subscribers being added during the year, bringing the total to 260,000, equal to 6 per cent of the mobile subscriber base.
Net revenues for du's fixed line business, including fixed telephony, TV and broadband, amounted to Dh1.14 billion for the full year 2010, a 23 per cent year on year increase reflecting approximately 561,000 lines.
"Extensive preparations have been made for a competitive fixed line market, and I am pleased to say we are now well positioned to take full advantage of this and other market developments," said Sultan.
