Fierce competition within the saturated telecommunications market contributed to a steep decline in earnings from Etisalat yesterday.
The UAE's largest phone company, which has offered to buy a 46 per cent stake in Kuwait's Zain, said third-quarter profit fell 23 per cent from the same period last year as local competition hit revenues and operating expenses rose. Net income declined to Dh1.74 billion (US$473 million) from Dh2.25bn a year earlier.
The figures fell short of analyst expectations of more than Dh2bn for the quarter. Revenues fell by more than 8 per cent to Dh7.31bn compared with Dh7.99bn in the same period last year.
The company added just 10,000 new mobile subscribers in the quarter to 7.81 million. The operator also lost about 40,000 internet users to 1.35 million.
"What we're seeing right now is a very saturated market in the mobile side," said Irfan Ellam, a telecoms analyst with Al Mal Capital. "Net additions will be in the tens of thousands and not in the hundreds of thousands as we've seen before," he said
Operating expenses factored heavily into Etisalat's earnings, rising 12 per cent to Dh4.11bn in the quarter. Several factors including rising salaries, regulatory expenses and depreciation led to the increase in Etisalat's operating costs.
Etisalat's $10.5bn offer to acquire a 46 per cent stake in Zain would make the UAE telecoms operator one of the largest in the world.
Minority shareholders have yet to approve the deal and the Kharafi Group, one of the largest private investors in Zain, is still working to acquire the shares in the company that Etisalat needs to reach 46 per cent.
"Although some of Zain's markets are maturing in terms of being 100 per cent penetrated, they still have growth opportunities," said Mr Ellam said. "But [Etisalat's] balance sheet remains strong even after the Zain acquisition and they'll generate enough money to take care of their debt.
Etisalat generates about 86 per cent of its sales through its international operations, with its Egyptian unit representing the majority of its foreign revenues.
While analysts have cited Etisalat's Egyptian business as a crown jewel in the operator's portfolio, it also needs to begin performing in its African and Indian operations to help offset a decline in its local revenues.
Etisalat has about 30,000 subscribers in India under the Cheers Mobile brand and has been in talks with several of the country's operators including Reliance Communications and Idea Cellular to expand its presence in the world's second-largest wireless market. Under the country's telecoms laws, however, Etisalat cannot acquire another company until January.
"India hasn't been resolved yet and that's not exactly ramping up its revenue," Mr Ellam said. "[Etisalat's] growth should be coming from overseas acquisitions and internet subscribers."
Etisalat's revenues were also affected by the decrease in its internet subscribers. While Etisalat does not break down its internet subscribers into dial-up or broadband categories, Mr Ellam suggested that users from other emirates had moved to Dubai and signed up with du.
He also pointed at the possibility that a significant number of the operator's dial-up customers cancelled the service and opted for mobile broadband packages.
"There's a substantial number of dial-up customers," Mr Ellam said. "This could be the beginning of those people fleeing."
Etisalat's main rival du is expected to report its third-quarter earnings next week. Analysts expect du to report earnings of Dh138m, a 75 per cent rise compared with last year.
dgeorgecosh@thenational.ae
6 UNDERGROUND
Director: Michael Bay
Stars: Ryan Reynolds, Adria Arjona, Dave Franco
2.5 / 5 stars
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
FIXTURES
Saturday, November 3
Japan v New Zealand
Wales v Scotland
England v South Africa
Ireland v Italy
Saturday, November 10
Italy v Georgia
Scotland v Fiji
England v New Zealand
Wales v Australia
Ireland v Argentina
France v South Africa
Saturday, November 17
Italy v Australia
Wales v Tonga
England v Japan
Scotland v South Africa
Ireland v New Zealand
Saturday, November 24
|Italy v New Zealand
Scotland v Argentina
England v Australia
Wales v South Africa
Ireland v United States
France v Fiji
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
How green is the expo nursery?
Some 400,000 shrubs and 13,000 trees in the on-site nursery
An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo
Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery
Approximately 340 species of shrubs and trees selected for diverse landscape
The nursery team works exclusively with organic fertilisers and pesticides
All shrubs and trees supplied by Dubai Municipality
Most sourced from farms, nurseries across the country
Plants and trees are re-potted when they arrive at nursery to give them room to grow
Some mature trees are in open areas or planted within the expo site
Green waste is recycled as compost
Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs
Construction workforce peaked at 40,000 workers
About 65,000 people have signed up to volunteer
Main themes of expo is ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.
Expo 2020 Dubai to open in October 2020 and run for six months
THE SPECS
Engine: 2.0-litre four-cylinder turbo
Transmission: eight-speed automatic
Power: 258hp at 5,000-6,500rpm
Torque: 400Nm from 1,550-4,400rpm
Fuel economy, combined: 6.4L/100km
Price, base: from D215,000 (Dh230,000 as tested)
On sale: now
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Company%C2%A0profile
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Moral education needed in a 'rapidly changing world'
Moral education lessons for young people is needed in a rapidly changing world, the head of the programme said.
Alanood Al Kaabi, head of programmes at the Education Affairs Office of the Crown Price Court - Abu Dhabi, said: "The Crown Price Court is fully behind this initiative and have already seen the curriculum succeed in empowering young people and providing them with the necessary tools to succeed in building the future of the nation at all levels.
"Moral education touches on every aspect and subject that children engage in.
"It is not just limited to science or maths but it is involved in all subjects and it is helping children to adapt to integral moral practises.
"The moral education programme has been designed to develop children holistically in a world being rapidly transformed by technology and globalisation."
MATCH INFO
Liverpool v Manchester City, Sunday, 8.30pm UAE
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
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
Killing of Qassem Suleimani
RESULTS
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A general guide to how active you are:
Less than 5,000 steps - sedentary
5,000 - 9,999 steps - lightly active
10,000 - 12,500 steps - active
12,500 - highly active
UAE currency: the story behind the money in your pockets
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Killing of Qassem Suleimani
LOVE%20AGAIN
%3Cp%3EDirector%3A%20Jim%20Strouse%3C%2Fp%3E%0A%3Cp%3EStars%3A%20Priyanka%20Chopra%20Jonas%2C%20Sam%20Heughan%2C%20Celine%20Dion%3C%2Fp%3E%0A%3Cp%3ERating%3A%202%2F5%3C%2Fp%3E%0A
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Step by step
2070km to run
38 days
273,600 calories consumed
28kg of fruit
40kg of vegetables
45 pairs of running shoes
1 yoga matt
1 oxygen chamber
New Zealand T20 squad
New Zealand T20 squad: Tim Southee (captain), Finn Allen, Todd Astle, Hamish Bennett, Mark Chapman, Devon Conway (wicketkeeper), Lockie Ferguson, Martin Guptill, Adam Milne, Daryl Mitchell, Glenn Phillips, Ish Sodhi, Will Young
