Du profit rises 57% to Dh325.5m

Du, the UAE's second biggest telecommunications operator, reported a 57 per cent rise in second-quarter profit on Monday, which was at the low end of analysts' estimates as subscriber growth for fixed-line services lagged that for mobile.

The firm made a net profit of Dh325.5 million ($88.6 million) in the three months to June 30, up from Dh207.2 million in the year-earlier period.

Analysts polled by Reuters had on average forecast du would make a quarterly profit of Dh332 million.

Quarterly revenue was Dh2.45 billion, up 12.9 per cent from a year earlier. Of this, Dh1.9 billion came from mobile customers.

Du had 5.73 million mobile subscribers as of June 30, up 3.5 per cent from March 31 and 20 per cent higher than a year ago. But its share of the UAE's mobile subscribers fell slightly to 46.5 per cent, indicating Etisalat is fighting back against its smaller rival after du rapidly won market share in the first few years following its launch.

The UAE mobile market is saturated, with mobile penetration at 149 per cent or almost 1.5 subscriptions per person. Rising use of Internet-based phone services has hurt operators' lucrative international calls business and weighed on call margins, spurring operators to diversify revenue.

Du's fixed phone, broadband and television units recorded year-on-year subscriber growth of between 13.2 and 19 per cent, but subscriber numbers were almost flat compared to the first quarter, with television subscribers down 0.4 per cent.

Total overheads were 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.

Du in April said it may bid for a virtual operator licence in Saudi Arabia in what would be its first foreign foray.

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