Du commits to network and digital transformation
Du will continue to invest in its network and its digital transformation to build capacity after a coronavirus-induced communications boom.
The UAE’s second-biggest telecoms operator has committed 19.7 per cent of its quarterly revenue to capital expenditure on an ongoing basis, said acting chief executive Fahad Al Hassawi.
The investment will be focused on digital transformation, core network improvements and fifth-generation network services.
“Digital transformation was always our priority but the pandemic has accelerated our focus and the pace of momentum,” Mr Al Hassawi told The National.
The Covid-19 pandemic led to a steep demand in telecoms services last year as offices switched to remote work and schools to online learning.
A steady investment in capital expenditure partially helped du, which also registered an increase in traffic, to comfortably deal with the communications boom without straining its infrastructure.
“The traffic that we handled during the pandemic has never been seen on our fixed-line networks before, but we were very comfortable ... we were prepared ... it did not create any issue for us,” said Mr Al Hassawi.
The company’s capital expenditure stood at Dh568 million ($154.7m) during the first quarter, about 83 per higher than the amount allocated during the same period last year.
Net profit fell by 28 per cent to Dh257m in the first three months of the year, compared with the previous year.
However, profit more than quadrupled compared with the fourth quarter of last year on the back of an improving economy.
“Du is on the right track to recovery ... we reported three quarters in a row with increased bottom line. We increased our customer base in the first quarter of this year ... we are successfully capitalising on all opportunities,” said Mr Al Hassawi.
“All these are strong signs of recovery ... there is still work that needs to be done but we are seeing a light at the end of the tunnel,” said Mr Al Hassawi.
He expects a “gradual but steady” recovery this year.
“It is very difficult to predict when business will reach pre-pandemic levels ... some expect it within two to three years while some predict three to four years’ time.”
He remains “very optimistic” about the future and said telecoms plays a critical role in everyday life.
“Mobility is increasing with the hospitality sector opening up, international tourism improving and people adapting their lives to new situation[s]. There has been a strong push from physical to online transactions ... this is going to be the story for the rest of the year,” he said.
Founded in 2005, du is 50.12 per cent owned by the Emirates Investment Authority, with Mubadala Investment Company and Emirates International Telecommunications owning 10.06 per cent and 19.7 per cent, respectively, and the rest in public hands.
In January, the operator also raised its foreign ownership limit from 20 per cent to 49 per cent to attract more external investors.
Du became the second service provider in the region to announce the availability of 5G in 2019.
The telecoms operator currently offers 5G services to 80 per cent of the populated areas in Dubai and Abu Dhabi.
A lower penetration of 5G-enabled devices has been one of the hindrances to wider service provision in less densely populated areas, said Mr Al Hassawi.
“We are not worried about the number of 5G sites or towers but what we care about is the coverage of population,” he said.
“Penetration of 5G handsets in the market is small ... the network is ready to receive 5G traffic, but there are not many supporting handsets. Du is offering its customers [the ability] to upgrade their handsets through direct purchase or easy instalment plans,” said Mr Al Hassawi.
The company is also exploring the importance of 5G in the home broadband, ICT, data mining and self-driving vehicle segments, he said.
With a speed that is about 10 times that of 4G networks, 5G will enable real-time video streaming, better gaming experiences and augmented reality services.
The traffic that we handled during the pandemic has never been seen on our fixed-line networks FAHAD AL HASSAWI Acting chief executive of du