Dubai's du to pay 20% royalty

Dubai’s Emirates Integrated Telecommunications Company, better known by its trade name du, today informed the Dubai Financial Market (DFM) that the royalty payable by the telco to the Federal government will be 15 per cent of its net profits and an additional 5 per cent of its yearly revenue.

Du, which launched operations in 2007, was exempted from paying federal government royalty for the first three years of its operations and paid 15 per cent of its profits as royalty for the first time in 2011 (for 2010).

Its rival Etisalat pays the government 50 per cent of its net profits in royalty.

In a statement posted on the DFM website this morning, Mahmood Ahmad, du’s company secretary, said: “The company has today been informed that the royalty payable to the UAE federal government by the company for the year ended December 31, 2011, will be payable at 15 per cent of the company’s net profit before any distribution plus an amount equal to 5 per cent of the company’s revenues.”

Although it has been in operations for only a few years, as against Etisalat’s more than 30 years, du has made significant headway in the UAE market, and its CEO said that it aims at overtaking its rival in terms of mobile phone subscriptions this year.

“The ongoing royalty for 2012 onwards will be advised to the company in due course,” the du statement concluded.

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