Foreign interests help Etisalat beat forecasts
A rise in revenues from Etisalat's international subsidiaries helped the national operator to surpass annual profit forecasts despite increased competition in the UAE telecommunications market.
Etisalat made a profit of Dh7.631 billion (US$2.078bn) last year, a decrease of over 13.6 per cent per cent on 2009, mainly due to a loss of local mobile and internet customers.
However, the company's international subsidiaries helped to increase revenues by 2 per cent to Dh31.9bn.
Etisalat lost 50,000 mobile subscribers in the fourth quarter ending in December and now has 7.76 million users. The operator has steadily lost mobile market share to du, Etisalat's only competitor, over the past year after ending 2009 with 7.79 million users.
Etisalat also lost 20,000 internet subscribers, the second-straight quarter it has lost customers. It now has 1.33 million internet customers.
"Etisalat realised well ahead of time that growth opportunities in the UAE telecom market would start diminishing due to high saturation of the UAE's mobile market," said Mohammed Omran, the chairman of Etisalat.
"Therefore, we developed a long-term strategy that would maintain the rate of growth, revenues and profit margins for our stakeholders - primarily the UAE federal government who owns 60 per centof the corporation - by diversifying our source of income and moving towards regional and international markets."
Etisalat added 25 million new subscribers from its international operations and now has 135 million customers across 18 countries. Etisalat's foreign subsidiaries now represent about 20 per cent of the company's total revenue, up from 14 per cent in 2009.
The operator is in the due diligence process of acquiring a 51 per cent stake in Kuwait's Zain for 1.7 dinars per share in a deal worth about $11bn. The process is scheduled to be completed at the end of this month and could make Etisalat one of the top operators in the world with about 162 million subscribers across 25 countries.