The telecommunications operator du more than doubled first-quarter profit as it increased market share by drawing mobile phone customers away from its bigger UAE rival Etisalat.
The Emirates' second operator added 272,000 active mobile subscribers in the first three months of the year, bringing the total to 4,604,800, and claims its total market share now exceeds 40 per cent.
The company's net profit grew by 112 per cent to Dh205.8 million (US$56m), which was above analysts' expectations.
"We have the highest growth rate in the region of any telco," said Osman Sultan, the chief executive of du.
Analysts agree du has attracted mobile customers from Etisalat, which has lost subscribers over the past year.
Etisalat reported it had 7.43 million mobile subscribers in the UAE for the first quarter of this year, compared with 7.71 million in the same period last year.
"Since 2009 du has been consistently delivering good numbers," said Simon Simonian, a telecoms analyst at Shuaa Capital. "We're seeing every quarter that they're gaining market share … Etisalat has been in retention mode, rather than chasing new subscribers."
Mr Simonian had forecast a Dh181 million net profit for the first quarter, significantly below du's reported earnings of Dh205.8m.
He added du was attracting higher-spending customers, with a higher average revenue per user (Arpu).
"Up until 2009, they were attracting the low Arpu subscribers. Now we're seeing them being more active - getting iPhone, BlackBerry and data subscribers," he said. "They were coming from a very low base."
Other commentators agreed that du is winning market share. "Absolutely they are taking customers from Etisalat," said Philip Brazeau, who heads the telecoms practice at the Middle East law firm Al Tamimi. "There's a big proportion of the population that is going to du."
Irfan Ellam, a telecommunications analyst with Al Mal Capital, said while du was winning some customers there could be other factors at play.
"Subscribers appear to be voting with their feet, and seem to prefer du's offering, which is cheaper," said Mr Ellam. "On the surface, it looks as if du has captured those subscribers from Etisalat. But Etisalat's losses are bigger than du's gains."
He added possible changes in the way Etisalat accounts for mobile subscribers could be another reason behind the sharp drop in its reported mobile subscribers. Etisalat did not respond to a request for comment.
A royalty fee is paid by du to the Government, which the company has provisioned at a "conservative" 50 per cent of net profits. Before this provision, du's net profit for the first quarter stood at Dh412m.
First-quarter revenues of Dh2 billion marked a 29 per cent increase on the same period last year, but were flat compared with the end of last year. "Revenue was about 3.7 per cent below our estimates for the quarter," said Mr Ellam.
Last year du paid a 15 per cent royalty fee, much lower than expected given that the incumbent operator Etisalat pays half of its profits to the government.
The figures from du come amid mixed first-quarter results for the telecoms industry.
Etisalat reported an 8.5 per cent decline this month in first-quarter profits to Dh1.82bn. The decline was attributed to high capital expenditure, outlay and greater competition in the domestic market.
Mr Ellam said newcomers to the market, such as du, were performing better than more established rivals. "The new players seem to be faring better than the old incumbents," he said.
Imminent liberalisation within the UAE telecoms sector will this year bring increased competition between the rival operators.
The planned infrastructure-sharing between Etisalat and du, through which the operators will be allowed to compete on landline and broadband services across the country, is expected before the end of the year, Mr Sultan said.
"Testing is already happening," du's chief executive added. "Some customers will be called within weeks on an invitation basis."
The delayed launch of mobile number portability, through which customers will be able to switch between providers but keep their number, will not have a "massive impact" on customer numbers, Mr Sultan said.
bflanagan@thenational.ae
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
Results
6.30pm: Maiden Dh165,000 (Dirt) 1,400m. Winner: Rio Angie, Pat Dobbs (jockey), Doug Watson (trainer).
7.05pm: Handicap Dh170,000 (D) 1,600m. Winner: Trenchard, Pat Dobbs, Doug Watson.
7.40pm: Maiden Dh165,000 (D) 1,600m. Winner: Mulfit, Pat Dobbs, Doug Watson.
8.15pm: Handicap Dh210,000 (D) 1,200m. Winner: Waady, Dane O’Neill, Doug Watson.
8.50pm: Handicap Dh210,000 (D) 2,000m. Winner: Tried And True, Pat Dobbs, Doug Watson.
9.25pm:Handicap Dh185,000 (D) 1,400m. Winner: Midnight Sands, Pat Dobbs, Doug Watson.
The Outsider
Stephen King, Penguin
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Killing of Qassem Suleimani
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Schedule:
Friday, January 12: Six fourball matches
Saturday, January 13: Six foursome (alternate shot) matches
Sunday, January 14: 12 singles
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
