UAE telco du is steadfast on 5G rollouts - and dividends

The UAE as a global trade, tourist, and banking powerhouse was significantly hit by pandemic-induced market factors. Given that backdrop, it was hardly unexpected that the country rebounded strongly when global economies reopened. Tourists have flocked back as a result of the widespread immunization campaigns and the start of Expo 2020.

These would feed into a greater need for the latest in telecom services and delivered at the highest speeds possible, whether for a business or individual. The UAE intends to be a pioneer in 5G networks and constantly upscale telecom technology and connectivity. The Dubai-headquartered du is one that stands to benefit. du - or Emirates Integrated Telecommunications - has a market cap of Dh29 billion and offers fixed-line, mobile telephone, internet, and digital television services in the UAE. It also provides carrier services, data hubs, internet exchange facilities, and satellite service for broadcasters.

Revenues increased 6.9 percent to Dh2.87 billion in the third quarter of 2021, owing to continued demand for high-speed web services and 5G smartphones. More crucially, mobile services maintained their recovery momentum, mainly from a thriving post-paid market. Post-paid continues to be resilient, with net additions of 13,000 subscribers and raising the total to 1.3 million. du's 'Power Plan' upgrades are also helping generate subscriber leads.

Explaining the profit dip

The EBITDA totalled Dh1.10 billion, thanks to cost efficiency efforts that mitigated direct pressure on margins. Net profit was Dh283 million, a decline of 65 per cent year-on-year due to greater depreciation and amortization expenditures associated with an ambitious investment programme.

Following two years of capital deployment, the 5G network is expected to cover 90 per cent of the UAE population. The du network was also the quickest during the quarter, according to independent tests. In addition, as part of the plans for a successful 5G rollout, the business opened two data centers - at KIZAD in Abu Dhabi and Dubai Silicon Oasis in Dubai.

Riding on future 5G expansion

du has revealed an ambitious strategy to prototype and deliver new solutions for the 5G standalone private network in support of its expansion aspirations. These innovation-focused efforts will be bolstered by a strategic partnership with Intel, which will assist in realizing the full potential of not only 5G, but also next-generation Edge services.

The Dubai telecom group has a dividend yield of 3.78 per cent, paid on a semi-annual basis and continued its payments even when it was hard hit by the pandemic, showcasing the dedication to dividend sustainability.

du could place more emphasis on monetizing its infrastructure investments, notably the 5G network. This could provide the business a significant competitive advantage. Even though the firm has been rolling out 5G services, market penetration of 5G handsets appears to be low, and network utilization will take longer to grow exponentially in the future.

The telco, meanwhile, remains committed to delivering strategic objectives that will allow it a better digital future while providing new ways to interact with businesses and individuals.

TEITDA totaled Dh1,100 million, thanks to cost efficiency efforts that helped mitigate direct cost pressure on margins. Net profit was Dh283 million, down 65 percent year on year due to greater depreciation and amortization expenditures associated with their ambitious investment program. Following two years of capital deployment, the 5G network is expected to cover 90 per cent of the population. Their network was also the quickest during the quarter, according to independent tests. In addition, as part of their development plans for a successful 5G rollout in the region, the business opened two data centers, KIZAD in Abu Dhabi and Dubai Silicon Oasis in Dubai.

du has revealed an ambitious strategy to prototype and deliver an innovative solution for the largest telco provider's 5G Standalone (SA) private network in support of its expansion aspirations. These innovation-focused efforts will be bolstered by a strategic partnership with Intel, which will assist them in realizing the full potential of not only 5G, but also next-generation intelligent edge services. The telecom group has a dividend yield of 3.78 per cent paid on a semi-annual basis and continued its payments when it was hard hit by the pandemic, showcasing the company’s dedication to dividend sustainability. The entity is making enduring efforts to widen its base in the MENA region to increase shareholder value in the long run.

du could place emphasis on monetizing its infrastructure investments, notably the 5G network, which is the telecom industry's future. This could provide the business a significant competitive advantage going forward. Even though the firm has been rolling out 5G, market penetration of 5G handsets appears to be low, and network utilization is expected to grow exponentially in the future, enhancing revenue and profit figures. The Telcom Group remains committed to delivering important strategic objectives that will allow a better digital future while also providing new ways to interact with businesses and customers.