Dubai: Higher usage of 5G services and continued increase in the subscriber base is keeping the UAE telecom provider du’s revenue and profit growth buzzing. There have also been gains from Dubai headquartered du’s recent foray into fintech services, notably with remittances.
“Of our total mobile phone traffic, 65 per cent is coming from the 5G networks,” said Fahad Al Hassawi, CEO. “This is amazing purely because the percentage is well ahead of many other markets where 5G has been deployed commercially. It signals healthy adoption of our services - and we will continue to grow from both a user and traffic perspective.”
On whether a significant portion of du’s new subscribers are opting specifically for 5G-linked services, the CEO said: “The UAE policy is that all plans provided by its telcos offer this access. All that users need to have are 5G-enabled smartphones.”
5G and AI
In the coming weeks, a fresh surge of smartphone sales growth is expected by UAE tech retailers, as more manufacturers, most notably Apple, bring out models featuring heavy AI-enabled features. Samsung had an early start in this particular race, launching its flagship Galaxy S24 back in January.
Late on Monday (July 22), du announced its H1-24 results, with revenues of Dh7.1 billion driving net profit returns of Dh1.18 billion. The profit tally growth was a heavy 54.2 per cent year-on-year. (The April to end June period netted a profit of Dh581 million. the du board has approved an interim cash dividend of Dh0.20 per share, a 53.8 per cent increase year-over-year.) “That makes for an excellent second quarter and first-half 2024,” said Al Hassawi. “We have grown our subscriber base, revenues, profitability and cash generation, solidifying the stellar start we made this year.
“Our commercial momentum led to a strong growth in our service revenues in Q2 buoyed by significant large enterprise deals with a robust pipeline of new projects as well as the launch of new innovative consumer products.”
For the first-half 2024, du’s EBITDA margin comes to a solid 44 per cent, a gain of 1.5 points. (On the DFM, the du stock is trading close to its 52-week high of Dh6.95. It will open today at Dh5.99.) The du mobile subscriber base closed H1-24 with 8.2 million users.
5G ‘private networks’
One reason for the margin gains has been the 5G take up rates, especially with corporate and institutional clients. This is through creating 5G ‘private networks’ for these clients.
“How this is done is clients sign up for the 5G private networks as part of the overall ICT solutions from du,” said Al Hassawi. “We have been successful in implementing a couple of high-profile private network projects, including helping create a ‘dark factory’ for a manufacturer where robots that are used on its assembly-line are connected to the 5G network.”
du’s pay services push
It’s still early days for the telecom provider’s foray into payment services, including remittances, peer-to-peer payments, and utility bill settlements.
“We will continue to add more features where possible, either through expanding partnerships or after clearing the approval from the regulator,” the CEO said. “A couple of these are under review currently.
“What I can say is that the adoption of our remittance features has been far better than our initial projections. I can see that in both the total value of remittances being sent and in the number of transactions done.”
To use these features, the sender does not need to be a du subscriber. “All that the individual needs is a valid Emirates ID…” added Al Hassawi.
