Business | Telecoms

Du reports 57% net profit rise in Q2

Subscriber additions slow down due to high mobile penetration in UAE

  • By Deena Kamel Yousef, Staff Reporter
  • Published: 17:55 July 30, 2012
  • Gulf News

  • Image Credit: Ahmed Ramzan/Gulf News Archives

Telecoms operator du reported a 57 per cent rise in second-quarter net profit Monday as mobile data revenue increased and the number of post-paid mobile customers grew.

Du, formally known as Emirates Integrated Telecommunications Company, made a net profit of Dh325.5 million in the three months to June 30, up from Dh207.2 million in the same period last year. This is after paying royalty fees of Dhs325.5 million.

Quarterly revenue reached Dh2.5 billion, rising 12.9 per cent from a year earlier. Mobile customers contributed Dh1.9 billion to revenues, an increase of 14 per cent year on year. Mobile data revenue rose 84.8 per cent year on year to Dh278 million in the second quarter.

Du had 5.7 million mobile subscribers by June 30, up by 3.5 per cent from the previous quarter and 20 per cent higher than the year before.

At the end of July, du’s share of the UAE mobile subscribers was 46.5 per cent, according to data from the Telecommunications Regulatory Authority (TRA).

“While du continues to narrow the market share gap with etisalat it is worth noting that quarter on quarter subscriber additions have slowed down as a result of the extremely high mobile penetration in the UAE,” said Krishna Mohan Chinta, senior research telecommunications analyst at IDC Middle East.

“In view of this, maintaining revenue momentum could remain difficult and hence we may see shift in the company’s strategic direction with a focus on revenue diversification. One way to achieve this could be international expansion.”

In April, du said it may bid for a virtual operator license in Saudi Arabia in what would be its first foray abroad.

Du added 196,300 active mobile customers and 36,300 post-paid mobile customers added. Fixed line subscribers increased to 546,600, a 10.6 per cent increase from the second quarter in 2011.

 

“The second quarter remained strong for du, with continued healthy customer additions, particularly in the high-value post-paid segment, which now represents nearly eight per cent of our mobile customer base. There are clear signs that the Company is entering the next phase of its evolution.” said Osman Sultan, du’s chief executive.

Outsourcing activities and other efficiency programmes will yield benefits to be seen in future financial performance, he added.

Chinta noted: “du continues to witness impressive top-line growth and significant improvement in the bottom-line, resulting from cost optimisation initiatives. Focus on offering flexible and innovative tariff plans, attractive promotional schemes, and emphasis on mobile data services have worked well for du.”

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