Text size:

  • Small
  • Normal
  • Large

Mixed bag expected for region's operators

Investors should expect the telecommunications sector to ring in another quarter of revenue growth when Etisalat and du announce their earnings this month.

Investors should expect the telecommunications sector to ring in another quarter of revenue growth when Etisalat and du announce their earnings this month. 

Both operators should report double-digit sales growth in the third quarter, with du expected to be up 28 per cent and Etisalat 12 per cent compared with the same period last year, according to analysts at EFG-Hermes.

Subscriber figures for both operators are also expected to increase. But when it comes to net profits, analysts have mixed expectations. Simon Simonian, a telecoms analyst with Shuaa Capital in Dubai, expects du growth to continue, with the operator estimated to report earnings of about Dh136.5 million, (US$37.1m), a 75 per cent rise compared with last year. "In terms of du, we expect the company to deliver another strong quarter in terms of growth," said Mr Simonian.

He expects Etisalat, the UAE's largest telecoms operator, to post a net profit of Dh2.04 billion, an 8 per cent decrease on last year. "I think the growth obviously has slowed down for them in the UAE," Mr Simonian said. "Earlier this year, we saw the beginning of the company being impacted by the slowdown in the UAE." Mr Simonian said increased competition from du as well as a slowdown in earnings from Etisalat's growing foreign operations base had been factored in to the company's projected profit.

"Etisalat's UAE margins are coming off a very high base of close to 70 per cent last year, but now the margin is closer to 65 per cent. This has had an impact," Mr Simonian said. "On the other hand, the contribution of international has been progressing every quarter and it really has been led by the Egyptian operations, whose performance has been fantastic." Mr Simonian does not expect issues relating to BlackBerry smartphones over the past two months to affect the revenues of either operator and should not be a factor in their third-quarter earnings.

Furthermore, any financial impact on the UAE's planned broadband-sharing regime should be felt next year, he said. Both Etisalat and du are expected to share each other's networks to provide internet and television services by the end of the year, giving consumers a choice of telecoms provider.


Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National