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Du Envisages 2.2b Dh Investment; Profit Beefs up

Dubai : 25 February 2010

Emirates Integrated Telecommunications, Du, announced on Wednesday a profit of 528 million Dh for the year 2009 and revealed a 2.2 billion Dh investment schedule for infrastructure development during current year.

The record growth in profit was due to a surge in numbers of subscriber and last quarter revenues.

Income for 2009 soared by 35 per cent to 5.3 billion Dh as the UAE’s second largest telecom operator increased its active mobile subscriber base by one million or 41 per cent last year from 2.4 million to 3.4 million. Du also succeeded in doubling its fixed line customers to 405,900 last year.

Net profit in the last quarter rose by 155% from 82 million Dh to 209 million Dh due to increase in mobile users.

Chief executive of Du, Osman Sultan said that Du will spend 854 million Dh on the fixed-line and broadcasting business and 1.3 billion Dh on its mobile network infrastructure. Last year, the company spent 2.4 billion Dh.

The telecom company, owned partially by Dubai Holding and Abu Dhabi investment vehicle Mubadala Development Co, set aside approximately 50 percent for royalties, putting last quarter profit at about 104.5 million Dh, said Sultan.

The quarterly results surprised analysts, with Shuaa Capital forecasting 89 million Dh and EFG-Hermes projecting profit of 78 million Dh.

Sales increased by 25% to 1.53 billion Dh in the last quarter as the operator contracted 337,900 active mobile users during the period. A customer is an active customer who has sent or received a call or text message during last 3 months.

Sultan told reporters that Du was a growth story and Du is a growth story. Du has made strides all around.

Sultan said Du’s share of the UAE market has increased from about 27% in 2008 to about 35% in 2009. Trading in Du’s shares was suspended from trading on Wednesday before the release of its earnings. The shares closed at 2.85 Dh on Tuesday.

Sultan said Du would provide its initial set of services utilizing a network share with competitor, Etisalat following an agreement with the Telecom Regulatory Authority.

The services will start by the end of July 2010. The common telecom infrastructure will let the companies to concentrate on service development and modernization.

Du has offered a range of latest services including Homephone Recharge, providing facility of worldwide calls from home landlines, during the past few months. It will permit fixed landline customers throughout the United Arab Emirates to call 190 destinations throughout the globe.

The service will also let its customers to utilize recharge cards on any home landline in the UAE, irrespective of the provider. There were 1.3 million fixed line subscribers in the UAE had at the end of 2009.

Sultan said that their value proposition in IPTV, broadband Internet and fixed telephony is the most technically advanced, integrated and developed in the Arab world. Going forward they see excellent growth scenario ahead by expanding their appeal to more and more clients through the growth of their offering nationwide through an infrastructure sharing contract.

In 2010 the operator will strengthen the basics that will make sure the business is positioned to carry on accomplishing long term expansion and prolonged profitability.

Sultan said that he sees 2010 as a year in which they will increase Emiratisation, improve business competence and carry on to drive their aim to accomplish prolonged growth and continued success which will benefit their shareholders, employees, customers and of course the community at large.

The subscriber expansion resulted in hefty mobile incomes which touched 3.727 billion Dh for the year, up 42% over the last year,  while the highest mobile incomes for a quarter were registered, in Q4 09, touching 1.11 billion Dh mark.

Du’s plan of concentrating on increasing quality for existing clients and attracting new high-end users is paying dividend, more than doubling its post-paid subscriber base from 66,300 to 137,500.

Fixed line, including Broadband, TV and fixed telephony, accounted for 970 million Dh in incomes from 405,900 lines.

Andrew Reid, Staff Writer, Gulf Jobs Market News
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