DUBAI: Du, the United Arab Emirates’ No.2 telecom operator, aims to capitalise on wealthy customers’ appetite for data via smartphones to offset margin pressures in its mobile phone business that held back third quarter profit growth.
The firm yesterday posted a 34 percent rise in profits for the three months to September 30, but this fell short of analysts’ forecasts.
Du, which ended rival Etisalat’s domestic monopoly in 2007, made a third quarter net profit of Dh326.9m ($89m), compared with Dh244.3m in the year-earlier period.
Analysts polled by Reuters on average forecast du would make a quarterly profit of Dh333.3m.
The UAE’s telecom sector as a whole is experiencing a slowing in revenue growth due to the country’s largely foreign workforce increasing use of Internet-based services, hurting operators’ lucrative international call and text businesses.
“We continue to witness pressure on voice, while mobile data revenue increased significantly,” Chief Executive Osman Sultan told reporters on a conference call.
Third-quarter mobile data revenue nearly doubled to Dh323m from a year ago. This was 17 percent of total mobile revenue, which rose 13 percent to Dh1.94bn.
“I wish to see it (mobile data) in the 25 percent range at the end of next year,” Sultan said.
Data’s growing contribution to mobile revenue is part of Du’s push to focus more on increasing earnings per-customer rather than on expanding mobile market share.
To achieve this, du will try to up the proportion of mobile customers on post-paid monthly contracts to more than 10 percent by 2013-end, from eight percent as of September 30. These customers are typically wealthier and spend more on telecom services.
The operator had Dh5.96m mobile subscribers on September 30, adding 227,800 in the quarter.
Reuters
