du posts 36 per cent surge in q3 net profit

Dubai: Du, the UAE's second telecommunications operator, received 233,200 new mobile subscribers in the past three months, taking the total number to 3.12 million, the company announced in its third quarter results.

Its mobile revenues for the quarter rose to a record Dh940.6 million, an increase of 6.7 per cent over the previous quarter and 29 per cent year-on-year.

"[This is] a very encouraging number if we consider the seasonality of the third quarter where it's summer, a slower quarter and we had Ramadan… which is a slower time for activity in the country," Osman Sultan, du's chief executive, said after the results were announced.

Revenues from fixed business, including fixed telephony, TV and broadband, were Dh241.6 million from 358,000 lines compared to Dh242.6 million in the second quarter and Dh211.8 million in the same quarter of 2008.

The mobile sector provided the strongest revenue growth, up 28.8 per cent over the same period last year, the company said in a statement.

Of the net mobile subscriber additions, 25,900 were post-paid mobile subscribers, a 55 per cent increase over the second quarter as a result of a continued marketing effort. Post-paid customers represent 3.6 per cent of du's mobile business.

Mobile broadband

"We had clearly indicated that du wants to put more emphasis on moving to high-end customers in the market segmentation and this is what … we are witnessing," Sultan said.

Irfan Ellam, telecoms analyst at Al Mal Capital, said that in the past quarter holidays and Ramadan had an impact on usage. The forthcoming quarter revenues are expected to be strong as a result of a large number of new subscribers.

He said growth would now be from mobile broadband since the country's active mobile penetration rate is above 180 per cent.

"Du has attractive packages that make it more accessible to users. Mobile internet will become mainstream now while previously it was only for high-end and business users," said Ellam.

Matthew Reed, senior analyst at Informa Telecoms and Media, said the continued strong growth of du in the mobile subscription numbers in the third quarter show that it is offering an attractive alternative to etisalat.

"Although the vast majority of du's mobile customers have prepaid accounts, that company has had some modest success in expanding its postpaid customer base as it tries to make inroads into the higher end of the market. du stands to become an even stronger player in the local market as a result of its launch of iPhone and its partner-market agreement with Vodafone," Reed said.