Du’s first-quarter net profit fell 0.6 per cent year-on-year as the loss of subscribers and higher royalty fees to the government weighed on earnings.
Net profit for the UAE’s second telecoms operator was Dh487.1 million during the first three months of the year, down from Dh490.3m a year earlier. Du’s revenues grew to Dh3.05 billion, representing a 3.2 per cent increase against the first quarter a year ago. The operator’s mobile subscriber base was down 0.9 per cent during the first quarter to 7.48 million. It attributed the decrease to “rigorously applying” the “My Number, My Identity” campaign requirements over the past nine months.
The “My Number, My Identity” programme is meant to enhance security and prevent the use of unregistered numbers for fraud.
"The SIM registration programme has clearly had a significant impact on du," said Matthew Reed, practice leader for the Middle East and Africa at Ovum in Dubai. "The company said it has suspended more than a million mobile lines, and that contributed to a fairly big quarter-on-quarter fall in revenues,"
Mobile revenue reached Dh2.23bn, up 0.2 per cent year-on-year. Mobile data revenues were 14.4 per cent higher to Dh715.6m, representing 30.9 per cent of mobile service revenues, compared to 27.6 per cent a year earlier.
Mr Reed added that while the “My Number, My Identity” campaign can be considered a temporary setback, it highlights the pressure n du to recover momentum in the mobile market.
“[The suspension of mobile lines] underline du’s dependence on the mobile market, given its limited fixed-market footprint at present and until competition in the fixed sector is introduced.”
Competition between du and Etisalat on home internet and landline services is set to open soon after years of delay. The open competition will expand du's geographical footprint in the country.
Fixed revenue for du increased 20.5 per cent in the quarter to Dh616.1m, versus Dh511.4m a year ago.
Meanwhile, du’s profit was also hurt by higher royalty fees. It paid Dh437.9m as royalty fees during the first quarter, up from Dh375m a year earlier. Net profit before royalty was up 6.9 per cent in the quarter at Dh925m.
Du's competitor Etisalat last week reported an 8 per cent year-on-year increase in net profit to Dh2.2bn, even as earnings from Egypt contracted owing to currency devaluation and also in Pakistan and Morocco because of competition in the mobile segment.
selgazzar@thenational.ae
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