There will be increased competition in the telecoms sector next year, affecting the earnings growth of the UAE’s two operators, analysts said.
The third quarter of this year, however, should still show a positive performance for both du and Etisalat, helped by a rise in mobile data revenue, ahead of the opening up of the fixed-line market by the end of this year.
"If the infrastructure sharing goes ahead, it's thought that the first phase will allow for competition between du and Etisalat in fixed voice and fixed broadband access," said Matthew Reed, the practice leader for the Middle East and Africa at Ovum.
“Competition in triple-play services – fixed voice, fixed broadband and TV – will come later, in a second phase,” he said.
Currently, consumers are obliged to use either Etisalat or du for home and fixed-line services, depending on their location.
They will have a choice between the two operators once infrastructure sharing is introduced, likely to be by the end of this year according to comments made in April by the regulator the Telecommunications Regulatory Authority.
According to analysts this could lead to better profitability from more efficient business models.
Du is expected to benefit more than Etisalat, as its infrastructure is limited to new developments in Dubai.
Beltone Financial expects du to report a net profit after royalty of Dh585 million for the third quarter of this year. Bahrain-based Sico forecasts profits at Dh569m. Net profit after royalty in the same period last year was Dh474m, a jump of 45 per cent on a year earlier.
“Higher data revenue will be the driver for du’s third-quarter earnings,” said Nishit Lakhotia, the head of research at Sico.
Karim Riad, a telecoms analyst at Cairo-based Beltone, said: “Du is a simple and strong story. We expect the company to post revenue of Dh3.13 billion in the third quarter, driven by a higher number of subscribers and stronger mobile data revenue.”
He added that he sees an improvement in du’s efficiency ratio – or how well a company uses its assets compared to its earnings – in line with the company’s plan to lower its operating expenses.
“The telecoms sector is highly penetrated, with mobile penetration rates close to 180 per cent,” Mr Riad said. “We expect growth to come from the mobile data segment going forward.”
According to a research note from the UAE brokerage Naeem, du’s market share growth is expected “to slow down because of intense competition from Etisalat and two-fold market penetration.”
The UAE remains the biggest market for Etisalat, generating about 51 per cent of the international communications company’s total revenue.
It will, however, also be looking to its operations outside the UAE to boost its earnings, with Maroc Telecom expected to contribute about 24 per cent of its revenue.
Etisalat was only able to book six weeks of Maroc Telecom’s revenue in its last results, as it only finalised a deal to acquire a majority stake in the North African operator in May.
Meanwhile, Etisalat’s Asian operations are expected to account for 12 per cent of total revenue, driven mainly by a strong performance in Pakistan which had been a drag on profits a year earlier. Egypt is forecast to report Dh1.1bn in the quarter and African operations will account for 5 per cent of the company’s revenue, according to Beltone.
Beltone expects Etisalat to post a net profit of Dh3.3bn in the third quarter, while Sico forecasts a net profit of Dh2.7bn. In the third quarter of last year, net profit after royalty was 18 per cent lower-year-on year at Dh1.8bn because of rising staff costs driven by the consolidation of its operations in Pakistan.
“For Etisalat, earnings will reflect full consolidation of Maroc Telecom for the first time,” said Mr Lakhotia. “We expect growth to continue in the domestic operations for Etisalat.”
Shares in du and Etisalat closed TK.
selgazzar@thenational.ae
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
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
Essentials
The flights
Emirates and Etihad fly direct from the UAE to Los Angeles, from Dh4,975 return, including taxes. The flight time is 16 hours. Alaska Airlines, United Airlines, Delta Air Lines, Aeromexico and Southwest all fly direct from Los Angeles to San Jose del Cabo from Dh1,243 return, including taxes. The flight time is two-and-a-half hours.
The trip
Lindblad Expeditions National Geographic’s eight-day Whales Wilderness itinerary costs from US$6,190 (Dh22,736) per person, twin share, including meals, accommodation and excursions, with departures in March and April 2018.
UAE cricketers abroad
Sid Jhurani is not the first cricketer from the UAE to go to the UK to try his luck.
Rameez Shahzad Played alongside Ben Stokes and Liam Plunkett in Durham while he was studying there. He also played club cricket as an overseas professional, but his time in the UK stunted his UAE career. The batsman went a decade without playing for the national team.
Yodhin Punja The seam bowler was named in the UAE’s extended World Cup squad in 2015 despite being just 15 at the time. He made his senior UAE debut aged 16, and subsequently took up a scholarship at Claremont High School in the south of England.
THREE
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Voices: How A Great Singer Can Change Your Life
Nick Coleman
Jonathan Cape
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
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S23%20ULTRA
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What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
