Dubai: UAE telecoms brand du saw its net profits drop by more than 12 per cent in the first quarter of 2019, while the company’s revenues slipped over 6 per cent.

Du, one of only two internet and mobile phone network providers in the UAE, saw its net profits drop from Dh512 million in the first three months of last year, to Dh449 million in the first quarter of 2019.

The company’s revenues fell to Dh3.1 billion in the first quarter of this year, down from Dh3.3 billion in 2018, which it blamed on a decline in mobile revenues.

Du also pointed to a one-off benefit related to regulatory costs that positively impacted the company’s profitability in the first quarter of 2018 as another reason for the subsequent drop.

“We had a good start to the year,” said Osman Sultan, EITC’s chief executive officer, “focusing on driving efficiency across the business to maintain profitability and increasing our capex spend (capital expenditure) as we prepare for the 5G launch very soon.”

Industry-wide challenges, Sultan added, including “continued pressure on voice revenues and data monetisation,” were reflected in du’s topline results, with revenue decreasing in the first quarter of 2019, mainly driven by the 8 per cent decline in mobile revenues of to Dh1.66 billion.

“The decline in our mobile base is a result of a clean-up of our prepaid base … and our strategy to focus more on the higher value post-paid segment,” he said.

Du’s post-paid business increased by 12.4 per cent in the first quarter of 2019, compared to the same period last year.

Fixed revenues, meanwhile, continued to show growth, increasing 9 per cent to Dh611 million.

“Despite the decline in revenue and the negative impact from the implementation of new accounting standards,” Sultan said the company’s net profit had increased, if the one-off benefit from last year was not considered, reflecting “good operational efficiency across the business.”

“We take a long-term view and remain focused on implementing our strategy to drive more efficiency in our core business, while capturing new areas of growth through ICT as we reposition our company for the future of the telecom business.”

Sultan added that the company had a strong capital position, enabling it to “make the right investments in our business.”

Capex spend in the first three months of 2019 was Dh181 million, up by 74 per cent compared to the same period last year as the company prepares for the launch of 5G.

In February, du announced the appointment of Peter Larnholt as its chief information officer.

“I am pleased to welcome Peter Larnholt to our leadership team, who brings a wealth of experience from the ICT and telecommunications sector and who will help drive forward our digital strategy,” Sultan said.

During the quarter, du announced a partnership with Nokia, Affirmed Networks and MediaTek to launch IoT services.

“This new technology is critical to the successful adoption of 5G, as it will enable devices to deliver a wealth of smart city applications ranging from smart metering, smart parking, trackers, smart health, industrial and agriculture use cases,” Sultan added.