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Du profit climbs 57%

The UAE telecom company du on Monday posted a 57 per cent increase in second quarter profit before royalties compared with the same 2011 period on growth in revenues as it increased the subscriber base.

The company, the second largest telecommunication provider in the UAE, said it made a net profit of Dh325.5 million in the three months to June 30, up from Dh207.2 million in the year-earlier period.

Net income in the second quarter increased to Dh651 million from Dh414 million in the corresponding period a year earlier.

Du’s chief executive officer Osman Sultan said: “There are clear signs that the company was entering the next phase of its growth. Delivering value for our shareholders remains our priority and we will consistently seek to do this through a continued emphasis on driving efficiencies, and a sustained focus on innovation and the introduction of new customer-centric products and services, he said in a statement.”

The has been an increase in the number of subscribers in the second quarter, with post-paid customers accounting for about 80 per cent of the operator’s 5.73 million mobile users, up 3.5 per cent from March 31 and 20 per cent higher than a year ago. The company increased its fixed line subscribers 10.6 percent to 546,600 in the second quarter. The telecom provider said the combined revenues for the second quarter reached Dh2.5 billion, an increase of 12.9 percent year on year from Dh2.2 billion and 0.2 percent quarter on quarter from Dh2.4 billion.

Citing Telecommunications Regulatory Authority data, du said its share of the UAE mobile market stood at 46.5 percent at the end of July. Sultan said he expects total revenue of the company for the year to remain at these levels. The company has not as of yet taken a decision as to whether it will bid for a licence in Saudi Arabia, he said.

Du is 39.5 per cent owned by the UAE Federal Government, 19.75 per cent by Mubadala Development Company, 19.5 per cent by Emirates Communications & Technology Company and the remaining stake by public shareholders. Analysts said increasing use of Internet-based phone services has taken a toll on operators’ international calls revenues and weighed on call margins as the UAE mobile market gets saturated with a penetration of 149 per cent or almost 1.5 subscriptions per person.

Total overheads of the operators stood at Dh733 million in the second quarter, which equates to 29.9 per cent of revenue, down from 35.2 per cent in the corresponding period of 2011.

issacjohn@khaleejtimes.com