du major beneficiary of telecom growth

Al Mal Capital has raised the target price for telecom provider du to Dh3.99 from Dh3.00 and the rating to outperform from market perform.

The analysts said that du has been the major beneficiary of the ongoing growth on the UAE telecom market, capturing 80.5 per cent of mobile net adds in 2009 and projected to capture 76 per cent by year end, through targeting of the SME segment, which has higher revenue per subscriber than its traditional subscriber base.

Mobile number portability is expected to be commercially launched in the second quarter of 2010, with technical aspects completed by November 2009.

Al Mal believes this will be a key catalyst for du.

The analysts project du to have 45.8 per cent market share of active mobile subscribers by 2014, up from a projected 32.6 per cent at the end of 2009.