Etisalat reported healthy financial results for the second quarter of 2008, with profits up 58 per cent on 2007 figures. The Dh2.99 billion (US$815 million) profit was helped by a Dh1.78 billion windfall from the sale of a quarter of the company's 35 per cent stake in Mobily, its network in Saudi Arabia. "Our strategy to become one of the largest ten operators is on track," said Mohamed Omran, the chairman of Etisalat, referring to its current status as the largest telecommunications business in the Arab world.
But domestic customer growth continued to slow. Etisalat reported 6.83 million subscribers, adding 200,000 new customers in the three month period ending on June 30 ? 60,000 fewer than were added in the first three months of the year. The slowdown in new customer acquisition suggests that the UAE market is reaching saturation point. With du likely to report at least two million subscribers in its first half results, due in the coming weeks, the UAE now has almost nine million mobile phone lines, or two for every person in the country.
Telecommunication analysts believe that, despite high saturation, operators will continue to add customers, a result of the highly cyclical nature of the country's expatriate workforce and the growing trend of mobile users having more than one account. In first quarter results released in April, du reported that 80 per cent of its customers were active subscribers ? those who had made or received calls or messages in the previous 90 days.
Etisalat did not report active subscriber numbers in its earnings statement released yesterday, but analysts expect the company to have a slightly higher percentage than its younger competitor, du. Despite slowing new domestic subscribers, Etisalat's profitability and international growth means that investors continue to favour the company's stock. In an analyst note published in late June, the investment bank Shuaa Capital said that the company's domestic business alone had a value of Dh23.35 per share. With a share price of Dh20, "investors are getting for free an attractive international telecom portfolio", the report said.