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New Subscribers Boost du Profits

Du, which launched operations in 2007, posted Dh242 million in net income before interest, taxes, depreciation, and amortization for the April-June quarter. The result marked a 52 per cent increase over the comparable income figure for the first quarter and a 734 per cent jump from the second quarter of 2008, du’s first full year 
of operations.

Du took a provision for a 50 per cent royalty fee it expects to have to pay to the government. Its second-quarter net income, after this provision, improved to Dh115.3 million, more than double its Dh47 million net income for the first quarter and a turnaround from a second-quarter loss of Dh44 million in 2008, the company said in a statement.

Osman Sultan, du’s Chief Executive Officer, said in a statement that the operator’s launch this spring of its first post-paid billing service helped propel its growth.

Sleiman Aboulhosn, an analyst at Abu Dhabi-based Prime Emirates, told Reuters that du’s quarterly profit was ahead of his estimates, as revenue per available user (ARPU) picked up by 5 per cent in the second quarter after dropping by 14 per cent in the first quarter and after du’s main competitor Emirates Telecommunications Corporation, or etisalat, lost 
80,000 subscribers.

“People are starting to realise the value du is offering ... In these times people want to cut costs and focus on expenses,” Aboulhosn said, referring to cheaper international and local calls offered by the Dubai-based operator.

Du’s revenues in the second quarter rose to Dh1.31 billion, up by 12 per cent from the first quarter and 44 per cent higher than the same period last year. The company attributed this revenue growth in particular to a continued increase in mobile subscribers and a strong performance from its wholesale business.

The firm’s number of mobile subscribers in the second quarter increased to 2.9 million following a net addition of 155,900 subscribers at a time when mobile subscriber growth in the UAE slowed amid the economic downturn.

“Having already reached our target of 30 per cent market share one year ahead of schedule, we are now working towards capturing 35 per cent of the market in 2010. However, we do expect to be operating in challenging times for the next one or two quarters,” du Chariman Ahmed bin Byat said in
the statement.

Du’s shares closed 4.8 per cent higher at Dh2.82 on the Dubai Financial Market following the announcement.

· issacjohn@khaleejtimes.com

· With inputs from agencies