Du revenues rise 3.2% to Dh3. 05b

TELCO AIMS TO BECOME AN ICT PLAYER AS IT SEEKS OPPORTUNITIES BEYOND CONNECTIVITY

Emirates Integrated Telecommunications Company (du) yesterday reported a year-onyear 3.2 per cent increase in revenues to Dh3.05 billion in the first quarter of this year, with strong contributions from the mobile data and fixed line segments of the business.

“This quarter we delivered against our strategy of focusing on ‘quality growth’ as evidenced by the 20.5 per cent rise in fixed revenue to Dh616.1 million, the 9.7 per cent increase in EBITDA (earnings before interest, taxes, depreciation, and amortisation) to Dh1.30 billion and the 6.9 per cent rise in net profit before royalty to Dh925 million,” said Osman Sultan, du’s chief executive officer.

Mobile data continues to be a key earnings generator for du and now represents 30.9 per cent of mobile revenues in the first quarter, compared to 27.6 per cent during the same period last year.

Mobile data revenues rose 14.4 per cent to Dh715.6 million during the first three months of the year as compared to Dh625.6 million a year ago.

“The mobile data contribution to the mobile revenues is in the high end compared to other operators in the region. Growth will come from mobile, fixed business, enterprise business and value-added end-to-end services going forward,” Osman Sultan, du’s chief executive officer, told Gulf News.

Total mobile revenues of the company increased 0.2 per cent to Dh2.23 billion while fixed revenues climbed 20.5 per cent to Dh616.1 million from Dh511 million a year ago.

Regarding this, he said the challenge, of course, is how to keep monetising it and this is the challenge all the telecommunications fims are facing.

“We are trying to find ways to monetise and making use of it,” he said, adding that the UAE market is growing and is the strongest in the region.

“We will see the impact of ‘My Number, My Identity’ campaign in the second quarter subscriber numbers also. The growth in subscribers is expected to happen in the third quarter,” he added.

Market share

“We are confident of attaining a major share. We are aiming to become an ICT player rather than a pure telco player and are identifying the ICT [information and communications technology] growth areas. Telcos have to go beyond connectivity,” he said.

Sukhdev Singh, associate vice-president at market research and analysis services provider AM RB, said the results clearly show that du is focusing on fixed-line networks to increase its revenues if network sharing does not happen soon.

“Du is trying to create its own territorial network and expand its fixed-line networks and it is going to be the highest growth revenue earner in the near-term future,” he said.

The network-sharing agreement between etisalat and du was supposed to be sealed last year.

“I cannot comment on this [network sharing agreement] and TRA is the right authority to talk on this. One thing I can tell you is that we are making good progress [towards achieving] the agreement,” Sultan said.

Singh said that terrestrial network sharing, as and when it happens in UAE, is likely to benefit “du more than etisalat” in acquiring more subscribers.

It might also result in significant churn in customer base for fixed services.

Even if fixed network sharing happens, he said that it will grow only for the next two to three years, but beyond that du needs to look at new geographical areas. Du doesn’t have any plan to grow beyond the UAE right now but it needs to after a certain point of time, he said. “There are still untouched opportunities like fixed networks for du.”

Mobile is the way “going forward” for the operator, but etisalat’s ‘Five’ prepaid mobile connection targeting lowincome workers is eating into du’s ‘Hello’ Vo IP card.

“The low-income workers have been the core market for du. My guess is that the fall in du’s mobile subscribers is partially due to this and ‘My Number, My Identity’ campaign,” Singh said.

Growth will come from mobile, fixed business, enterprise business and value-added end-to-end services going forward.”

Osman Sultan

| du CEO