UAE telco Du to boost spending as it raises investment in 5G networks

The company is also seeking new a chief executive to succeed Osman Sultan

Osman Sultan, chief executive of du. Jeffrey E Biteng / The National

Du, the UAE's second-biggest telecoms operator, will boost capital expenditure by up to 40 per cent this year as it accelerates investment in 5G networks while it searches for a new chief executive to replace its departing leader.

The firm expects to spend Dh1.3 billion to Dh1.4bn this year in capital expenditure from Dh1bn in 2018 as it works "full speed" to roll out 5G services, Osman Sultan, Du's chief executive, said on Wednesday. Mr Sultan will aid in the selection of his successor then continue to steer the company until a suitable candidate is appointed.

"The Board have asked the CEO for his support in the selection process," Mohamed Al Hussaini, chairman of Du holding company EITC, said. "Osman Sultan, EITC’s founding CEO, is committed to the delivery of the company’s ambitions in 2019 and to ensuring a smooth transition once the successor is appointed.

Matthew Reed, practice leader for Middle East and Africa at UK-based consultancy Ovum, said: "The news that the search is under way for a new CEO to succeed Sultan, who has been with Du parent EITC since 2005, also marks the coming end of an era for the company." 

The company said annual net income after royalty climbed 2.4 per cent last year to Dh1.75bn, buoyed by a rise in fixed revenues. Annual total revenues grew 3.2 per cent to Dh13.4bn.

Pressure on the mobile pre-paid segment will increase this year, Mr Sultan told reporters in an earnings call on Wednesday.

“Du, in common with many other operators, will be under pressure to develop other new revenue streams, perhaps ones based on 5G, the next generation of wireless technology,” said Mr Reed.

The firm's board proposed an annual dividend of 35 fils per share or Dh1.56bn, of which 22 fils per share is the final dividend payment for the year, subject to approval at its annual general meeting.

Du's fourth quarter profit fell 18.3 per cent. Rival Etisalat, the UAE’s biggest telecom operator, earlier this week reported a 2.4 per cent increase in fourth quarter net profit of Dh2bn as it added more customers.