Du profit jumps 46% on growth in data services

Dubai: Telecom operator du has registered a 45.64 per cent year-on-year jump in second-quarter profit after royalty to Dh474 million compared to Dh326 million during the same period last year due to the strong growth in mobile data revenues.

Revenue for the quarter increased by 12.05 per cent year on year to Dh2.66 billion, up from Dh2.37 billion. Data revenues reached Dh573 million, representing a healthy increase of 44.81 per cent from Dh396 million in the second quarter of last year.

“This quarter we have developed new innovative propositions for our customers which we look forward to launching over the coming months against the backdrop of rapidly evolving consumer requirements and technology advances in the telecommunications industry. I remain excited about our longer term prospects as customer appetite for high speed data continues to increase. By focusing on efficiency and fostering innovation, I am proud to retain our position as the operator of choice,” said Osman Sultan, du’s Chief Executive Officer.

The company’s board has proposed a special dividend payment of Dh0.10 per share and the initiation of an interim dividend payment of Dh0.12 per share in 2013. An extraordinary general meeting will be held in August to approve the dividend payment.

“We are delighted to return Dh1 billion to our loyal shareholders this quarter by way of a special dividend and the start of du’s interim dividend programme. Our balance sheet and cash generation remains strong, and we are committed to generating attractive and sustainable returns to our shareholders by balancing the long-term investment needs of our business and shareholder expectations,” Sultan said.

The operator’s mobile revenues reached Dh2.07 billion, an increase of 13.33 per cent year on year compared to Dh1.82 billion during the same period last year.

Innovation

Sultan said that the company remains focused on innovation and improving service experience to retain high value customers across all segments.

The company added 14,356 new mobile customers during the quarter, bringing the total mobile customer base to 6.65 active mobile customers, a 16.07 per cent increase from 5.73 million active mobile customers a year ago. Du estimates a market share of 46.5 per cent according to the Telecommunications Regulatory Authority (TRA) and competitor reports.

According to Jonas Zelba, senior research analyst at Frost & Sullivan, du’s mobile market share fell in the second quarter because etisalat started offering better bundling deals.

The mobile post-paid customer base grew by 31.21 per cent year on year to reach 589,862 active mobile post-paid customers in the quarter. The postpaid customer base now represents 8.9 per cent of the total customer base. Pre-paid customer base grew 14.78 per cent to 6.06 million.

“We were focusing on post-paid mobile customers but users can accept a competitive momentum in the pre-paid market in the coming two quarters,” Sultan said.

Fixed line customers showed stable growth, with 6,510 new lines, bringing the total to 578,026 lines, a yearly increase of 5.74 per cent.

“Outlook for Du remains rosy and the telco operator is expected to grow its customer base and significantly increase its profit and revenue,” said Zelba.