Dubai: Dubai-based telecom operator du announced yesterday the signing of a $100 million three-year loan with Singapore-based DBS Bank to fund its capital investment in the business.
The investment agreement was signed with the Dubai branch of DBS Bank, which has over 200 branches across 15 markets.
Speaking of the loan, Osman Sultan, Chief Executive Officer of du, explained that the nature of their business requires sustained investment in infrastructure.
“This financing is an essential part of our ongoing programme of capital investment that in this case will fund the acquisition of equipment from Huawei to enhance network performance and operations in HSPA+ [Evolved High-Speed Packet Access], LTE [Long Term Evolution] and Advanced LTE,” he said. “This investment in state of-the-art technologies is expected to further enhance the experience our customers enjoy and enable the launch of new services and applications such as 300mbps speed.”
He added that in the first nine months of 2012, du has invested Dh1.1 billion in improving its network.
Matthew Reed, a principal analyst with Informa Telecoms & Media and head of mobile research for the Middle East and Africa, told Gulf News it is quite common for telecom operators to take out loans and as it becomes important for some to expand and improve their networks.
“Mobile data represents an increasingly substantial and fast-growing revenue stream for many telcos, including du, so it is important for du that it should continue to expand and improve its HSPA and LTE networks,” Reed said.
“In terms of market positioning, du is increasingly trying to target the higher-value end of the market in the UAE, and to do so it needs to ensure it offers the appropriate services,” he added.
Du is 40 per cent owned by the Government, 20 per cent by Mubadala Development Company, 20 per cent by Tecom Investments and 20 per cent by public shareholders. It is listed on the Dubai Financial Market (DFM).