UAE’s Du Posts 57% Rise In Q2 Profit

Du, the UAE’s second biggest telecommunications operator, reported a 57 per cent rise in second-quarter profit on Monday, which was at the low end of analysts’ estimates as subscriber growth for fixed-line services lagged that for mobile.

The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of Dhs325.5 million ($88.6 million) in the three months to June 30, up from Dhs207.2 million in the year-earlier period.

Analysts polled by Reuters had on average forecast du would make a quarterly profit of Dhs332 million.

Quarterly revenue was Dhs2.45 billion, up 12.9 per cent from a year earlier. Of this, Dhs1.9 billion came from mobile customers.

Du had 5.73 million mobile subscribers as of June 30, up 3.5 per cent from March 31 and 20 per cent higher than a year ago. But its share of the UAE’s mobile subscribers fell slightly to 46.5 per cent, indicating Etisalat is fighting back against its smaller rival after du rapidly won market share in the first few years following its launch.

The UAE mobile market is saturated, with mobile penetration at 149 per cent or almost 1.5 subscriptions per person. Rising use of internet-based phone services has hurt operators’ lucrative international calls business and weighed on call margins, spurring operators to diversify revenue.

Du’s fixed phone, broadband and television units recorded year-on-year subscriber growth of between 13.2 and 19 per cent, but subscriber numbers were almost flat compared to the first quarter, with television subscribers down 0.4 per cent.

Total overheads were Dhs733 million in the second quarter, which equates to 29.9 per cent of revenue, down from 35.2 per cent in the corresponding period of 2011.