Du eyes Saudi move after strong profit
Dubai, May 10, 2012
Du may bid for a virtual operator licence in Saudi Arabia in its first foreign foray, its chief executive said, after the UAE's No 2 telecom operator reported a 62 percent jump in quarterly profit.
Du, majority-owned by government institutions and which ended rival Etisalat's domestic monopoly in 2007, said on Thursday mobile data revenue more than doubled in the first quarter and it added subscribers.
It operates in a market with one of the highest penetration rates in the world - 1.45 mobile subscriptions per person in the United Arab Emirates - leaving limited growth prospects at home.
'Going abroad with a standard mobile network operator model, looking at greenfield or some merger and acquisitions is not on the agenda today,' CEO Osman Sultan said on a conference call.
Asked whether du would join bidding for Saudi Arabia's three mobile virtual network operator licences in 2012, Sultan said: 'We are studying ... the final decision will be for the shareholders. We have to look at the conditions in Saudi and other markets.' MVNOs lease excess network capacity from telecoms operators.
Sultan would not say whether du has held talks with Saudi Arabia's three mobile operators - Etisalat affiliate Mobily , Saudi Telecom and Zain Saudi - on hosting a du MVNO on their network.
Du is owned by the government-controlled Emirates Investment Authority, Abu Dhabi investment vehicle Mubadala and a unit of Dubai Holding, the ruler of Dubai's personal investment firm.
The Dubai-based operator's first-quarter net profit after royalty was 333 million dirhams ($91 million), up 62 percent and compared with a forecast for 268 million in a Reuters poll. It is to pay 50 percent of net profit in royalties - or tax - to the government.
Quarterly revenue was up 20 percent at 2.45 billion dirhams.
Revenue from mobile services rose 22 percent to 1.9 billion dirhams, while mobile data revenue more than doubled to 297 million.
The firm added 320,600 mobile subscribers to March-end, increasing its mobile customer base to 5.5 million to give it a 46.7 percent market share in the country.
Contract mobile subscribers, who are typically wealthier and less likely to switch providers, now account for 7.5 percent of du's total mobile subscribers. Sultan said this percentage would reach double figures in 2013.
Du's total revenue share of the UAE telecoms sector was nearly 29 percent, while its share of mobile revenue was about 32 to 33 percent, he said. Average revenue per user, an industry metric of profitability, rose to 119 dirhams in the quarter, from 118 dirhams a year-ago. 'You will see voice ARPU declining a little bit, (but) the growth in data is offsetting this,' said Sultan. - Reuters
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