Du steps up chase for fixed-line customers

Du steps up chase for fixed-line customers

Dubai - Landmark deal with etisalat would boost du's revenue: CEO.



By Issac John

Published: Thu 6 Aug 2015, 12:00 AM

Last updated: Fri 7 Aug 2015, 10:39 AM

Telecom operator du said on Wednesday that it is making headway with the fixed-line network infrastructure sharing deal with bigger rival etisalat.
The landmark deal that was set into motion on July 14 marked the opening up of the country's fixed-line consumer telecom market to competition.
Osman Sultan, chief executive officer of du, said the operator started offering fixed-line services from last month for limited customers after five years of negotiations for rights to access to etisalat's networks.
Sultan said the fixed-line sharing deal is a game changer because it would open up the entire country for increased competition.
In a statement, Sultan said the deal would help du protect its mobile business as customers seek a single provider for telecom services and also boost revenue. However, it will not necessarily have a big impact on profit because fixed-line was a low margin business, he said.
Du and etisalat, both part-owned by federal fund Emirates Investment Authority, will limit how many customers can switch provider each month.
Sultan said customers can change fixed phone line and Internet provider, but television will not be added until 2016.
In the second quarter, du made a net profit of Dh502 million, down from Dh547.7 million in the year-earlier period. The company has proposed a half-year dividend of Dh0.13 per share, up from Dh0.12 for the same period of 2014, plus a special dividend of Dh0.1 per share, it said. The company reported a 2.2 per cent rise in quarterly revenue to Dh3.09 billion and said it paid quarterly royalties of Dh476.4 million compared to Dh401.2 million a year earlier.
For 2014, du paid 10 per cent of its regulated revenue, which excludes the likes of handset sales, and 25 per cent of regulated profit in royalties. These rose to 12.5 and 30 per cent respectively this year.
Highlights of the second quarter included a 20.2 per cent increase in fixed-line revenue, and a 4.9 per cent rise in data revenue. Earnings before interest, tax, depreciation and amortisation (Ebitda) climbed 3.5 per cent to Dh1.34 billion.
Total mobile customer base stood at 7.36 million at the end of the quarter, up 2.7 per cent from the same 2014 period.
Mobile revenue totalled Dh2.23 billion, a 1.4 per cent drop while mobile data revenues increased by 4.9 per cent to Dh719.3 million. Fixed-line revenue climbed 20.2 per cent to Dh649.8 million compared to the same 2014 quarter.
Ahmed bin Byat, du's chairman, said the company remained committed to the UAE's smart government initiatives. He said du's partnership with the TRA's FEDNet programme is testament to its ongoing support for the government in its push to strengthen the UAE's position as a global leader. "The recently launched bit streaming agreement with etisalat also reflects our commitment towards supporting the UAE's efforts to deliver the best choice and customer experience to its residents and visitors, and will help to strengthen the telecommunications sector through healthy competition," said Byat.
- issacjohn@khaleejtimes.com


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