Etisalat's mobile subscriber base has fallen for the first time in the company's history, its first-half results announced yesterday revealed, with the company also losing fixed-line telephone customers. The national telecommunications operator reported 7.26 million mobile subscribers at the end of last month, down by more than 80,000 on the 7.34 million it reported in April. Fixed-line customers also fell by almost 20,000. Industry watchers have said they expect to see a drop in mobile subscribers this year as the UAE's population shrinks and the country receives fewer leisure and business visitors. But yesterday's announcement marks the first time a UAE mobile operator has reported a drop in customers. Even so, the company continued to record strong revenue growth, with first-half revenues of Dh14.74 billion (US$4.01bn), up by 10 per cent on the same period last year. Its focus on keeping costs under control also appears to have paid off, as profitability continued to rise. "The financial results for the first half of 2009 reflect that Etisalat was not directly affected by the global financial crisis," said Mohammed Omran, the Etisalat chairman. First-half profits were down 15 per cent on last year, mainly because of a one-off gain of almost Dh900 million in 2008 from the sale of a stake in the company's Saudi Arabian affiliate. Excluding this gain, the company's first-half profit of Dh4.59bn is up 11 per cent over the previous year. "We have reduced our operational expenditure in the period and have become even more selective in choosing our international investments," Mr Omran said. Etisalat became accustomed to adding hundreds of thousands of subscribers each quarter as the economy boomed. However, it has seen its customer growth slow as competition from its rival, du, increased. The du network has placed a big focus on attracting price-sensitive customers with a series of discount offers. As the economy slowed and consumers began watching their wallets, the strategy appears to have paid off. New mobile subscribers in the UAE now overwhelmingly favour du, which attracted more than 80 per cent of the country's 300,000 new subscribers in the first three months of the year. First-half results from du, which launched its services in the beginning of 2007, are expected in the coming week. The UAE now has more than two mobile phones for every man, woman and child in the country, a rate higher than anywhere else in the world. "This high penetration rate reduces the opportunities for growth in the number of subscribers," said Mohammed al Qamzi, the chief executive of Etisalat. The company now planned to increase spending by existing subscribers through services such as mobile internet access, he said. Etisalat also hopes to offset a slowdown in the UAE market with rapid growth in emerging economies such as Nigeria and Egypt, Africa's two largest telecommunications markets. It plans to launch its network in India, the world's fastest-growing mobile market, by the end of the year. Mr Omran said he hoped to see the company reach 100 million subscribers by the end of next year, thanks to growth in overseas markets. "Etisalat is a strategic partner in developing the telecommunication sector in international markets," he said. "The company has gone beyond offering traditional communication services, and is delivering state-of-the-art value-added services across next-generation wireless and wire lines services in Asia and Africa." firstname.lastname@example.org
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