The telecommunications company du overestimated the number of subscribers to its premium television channels, leading it to pay unnecessary licence fees to media partners.
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The operator charges subscribers up to Dh315 (US$86) a month for TV packages. It pays a proportion of such fees to operators, including OSN and Al Jazeera, for the right to carry their channels.
But in a report sent to some of these partners, du overstated the number of TV subscribers by thousands.
According to industry executives, the problem was confirmed in an audit of du's subscriber base instigated by OSN. The telecoms company is now seeking reimbursement after paying for subscribers that did not exist.
"Due to a reporting error, two of our partners were over-compensated for the provision of their services to du," said a spokesman for the company.
"Having brought this to their attention, we have been working with them to achieve a satisfactory resolution of the reimbursements due to us."
The company declined to disclose the extent of the problem, or say how much money it is now looking to collect from partners.
However, industry sources confirmed it overestimated its TV-subscriber base by thousands, with one claiming a figure of 20,000, almost 20 per cent of the company's actual subscriber base.
The operator has a total of 108,700 subscribers to its television service, according to the company's most recent financial results.
Farid Faraidooni, the chief commercial officer for du, said the company was working to improve its reporting systems.
He declined to specify which media partners had been affected by the error.
The company's pay-TV partners include OSN, Al Jazeera and ART. Representatives of those companies did not immediately respond to a request for comment.
While du misreported its TV-subscriber numbers to at least two media partners, it insists it has not misrepresented its figures to the Dubai stock market, on which its shares are traded.
The du spokesman also claimed it had not misrepresented its subscriber numbers to the Telecommunications Regulatory Authority (TRA) or to analysts.
"There have been no errors in our reporting of either our financial statements or our subscriber statistics to the financial markets, to the TRA, or industry analysts arising from this issue," said the spokesman.
"We would like to place on record that the alleged misrepresentation of TV subscriptions is incorrect."
Al Jazeera is not publicly traded. OSN is owned by Panther Media Group (PMG), which is part-owned by the Kuwaiti holding company Kipco, which is listed on the Kuwait Stock Exchange. However, OSN itself is privately owned and does not publicly disclose subscriber numbers.
Media planners use audience numbers to determine how much advertising to allocate to a particular channel.
However, the majority of revenues for pay-TV operators like OSN derive from subscription fees, with one a small proportion coming from advertising.
One local advertising executive said the over-estimation of OSN's subscriber base was unlikely to hit advertising rates.
"The advertising on OSN is limited. It's not really their main priority at all," said the executive, who did not wish to be named.
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