UAE Telco Du Q1 Net Profit Rises 4.8%

Du, the United Arab Emirates’ No.2 telecom operator, reported a 4.8 percent rise in first-quarter net profit on Thursday, beating analysts’ estimates as it reduced capital expenditure and revenue rose.

The firm, which ended rival Etisalat’s domestic monopoly in 2007, made a net profit of Dhs490.3 million ($133.5 million) in the three months to March 31, up from Dhs467.9 million in the year-earlier period, according to a bourse statement.

Analysts polled by Reuters on average forecast du would make a quarterly profit of Dhs433 million.

First-quarter revenue was Dhs2.96 billion. This compares with Dhs2.63 billion a year ago. Mobile accounted for more than half of du’s additional revenue.

That rise comes despite du’s average revenue per user (ARPU) falling nine per cent year-on-year to Dhs100.

Du’s costs fell to 24.8 per cent of first-quarter revenue from 26.6 per cent a year ago as sales and marketing spending dipped relative to income and the company reduced its bad debts.

Du’s quarterly capital expenditure also fell by more than two-thirds to Dhs116 million.

Mobile accounted for 75.4 per cent of du’s quarterly revenue, fixed services 17.3 per cent, wholesale 5.9 per cent and broadcasting 1.4 per cent.

Data provided 28.2 per cent of mobile service revenue. This was up from 24.6 per cent in the prior-year period.

Du now has a 47.3 per cent share of the UAE’s mobile subscribers, but only a 30.4 per cent share of the UAE telecom sector revenue, with rival Etisalat claiming the remainder.

Postpaid subscribers, which account for nearly a tenth of du’s mobile subscribers, made on average 611 minutes of calls in the first quarter, nearly triple the average for pay-as-you-go customers of 207 minutes. The latter segment was down from 223 minutes in the year-earlier period.

Fixed revenue rose 28 per cent to Dhs511 million, outpacing a seven per cent increase in fixed line subscribers.