Dubai: Emirates Integrated Telecommunications Company (du) on Tuesday reported an 18 per cent increase in third-quarter net profit to Dh559 million compared to Dh474 million during the same period last year, fuelled by an uptick in fixed revenue of 36 per cent and an 11 per cent rise in mobile data revenues.
The telecom operator’s revenues grew to more than Dh3 billion for the second consecutive quarter to Dh3.03 billion, a 15 per cent increase against Dh2.64 billion registered in third quarter of last year.
Mobile data revenues increased by 11 per cent from Dh616 million to Dh684 million during the same period last year while fixed revenue increased by 36 per cent to Dh598 million compared to Dh439 million in third quarter of last year.
Osman Sultan, du’s Chief Executive Officer, said that data represents 30 per cent of mobile service revenues, up from 29 per cent in third quarter last year.
He said that data continue to be a key market driver during the quarter as customers’ demand for connectivity remained strong.
A “key challenge facing the industry” is the difficulty in monetising data services. Du is working towards solutions to this issue and as such, there are likely to be further developments in services for customers focused on “driving revenue in this area,” he said.
Mobile revenues increased nine per cent year-on-year to Dh2.24 billion in the quarter.
“Overall mobile revenue is stagnating now for the telecom operators and even monetising data revenue, which used to be the cash cow, is becoming difficult, said Bhanu Chaddha, telecommunications research manager at International Data Corporation (IDC).
Growth in fixed revenue is commendable, he said, but they need to monetise data revenue through “constant innovation” in the business models and getting “new products to the market”.
The telecom operator now has 7.5 million active mobile subscribers.
The company’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the quarter reached Dh1.29 billion, an increase of 21 per cent compared to the same quarter last year but its average revenue per user (ARPU) fell slightly during the quarter to Dh102 compared to Dh106 during the same period last year.
He said the ARPU is quite stable now. It was Dh103 in the second quarter and Dh100 in the first quarter of this year.
To address this issue, he said the company has placed focus on data revenue and increasing the proportion of postpaid customers.
“We continue to experience pricing pressures from competitors and the popularity of VOIP (Voice over internet Protocol) services, a trend the entire industry is facing. ARPU is expected to remain steady over the coming quarters,” he said.
He attributed the fall in mobile revenue growth in the third quarter compared to second quarter to promotions that were offered as value-added to customers.
“Mobile market share is not on top of my radar. What we consider is the value gain rather than the volume gain,” he said.
