With the focus on data, du is now hoping to attract high-value mobile phone users from Etisalat once mobile number portability becomes a reality.
UAE consumers’ growing usage of mobile data bolstered a 45 per cent jump in du’s third-quarter profits.
For the third quarter, the Dubai-based telco posted a net profit after royalty of Dh474 million as total revenues increased 8 per cent to Dh2.64 billion.
Mobile data revenue – accounting for 29 per cent of total mobile revenue – rose nearly 35 per cent to Dh616m.
Earnings before interest, taxes, depreciation and amortisation increased 11 per cent to Dh1.06bn.
“The voice revenues are flattening, but still the growth is fuelled by data,” said Osman Sultan, du’s chief executive, adding the telco was focusing on data-centric services.
Indeed, data usage has become the sole strategy for mobile operators, analysts say.
“Two years ago mobile revenues were so high because a lot of expats were calling back home,” said Petr Molik, the head of financial advisory at Menacorp. “International calls were a big part of revenue. But now with internet and VOIP [services] like Skype, long-distance calls are free.
“Mobile data today is the only growth factor in developed markets because of the smartphone penetration, which has achieved the point that it’s ubiquitous and people are used to getting email and internet on their mobiles.”
Smartphone penetration of nearly 90 per cent in the UAE is among the highest in the world. Demand for data services has increased steadily over the years as users watch videos on Youtube, send Whatsapp messages and make calls on Viber, all of which consume data.
With its focus on data usage, du hopes to attract high-value mobile-phone users from Etisalat when mobile number portability (MNP) takes effect.
Mr Osman says the deadline for this is December 22, and both telcos must accommodate new customers who want to keep their mobile number.
While he does not see this as a “game changer”, du still sees value in trying to attract high-value, post-paid mobile-phone users.
However, the telcos’ sharing of their networks appears to be a long way off. While the technical difficulties have been overcome, disagreements over fee structures are causing the delay.
“I believe that it [network sharing] is an important track for growth. We have turned to the TRA [Telecommunications Regulatory Authority] and said this is where we are and this is our position. I don’t know how long this could take,” said Mr Sultan.
Du has abot 6.9 million mobile subscribers and 587,000 fixed-line customers. Liberalising the UAE’s broadband internet infrastructure would give du access to thousands of potential new customers and foster greater competition. Etisalat currently has the monopoly over Abu Dhabi’s fixed-line networks, while the majority of du’s fixed-line presence is in Dubai.