The dispute between the BlackBerry manufacturer Research In Motion and the UAE is making investors wary of telecommunications stocks. Etisalat, the bigger of the country's two telecoms operators, has lost 3.3 per cent in the past six days, declining in five of the six sessions. The other telecoms operator, du, lost 0.4 per cent yesterday but has shown little movement since the Telecommunications Regulatory Authority (TRA) indicated last week that it was looking to curb BlackBerry services for security reasons. The regulator said on Sunday it would suspend the services from October 11, which will affect about 500,000 customers in the UAE. Saudi Arabia also announced plans to suspend BlackBerry services.
The investment bank Rasmala said in a note yesterday "we believe that the prolonged suspension of the BlackBerry services without a viable alternative will negatively affect operators' performance" for the rest of the year. It added, however, that it was "tough to quantify the impact". Moody's Investors Service issued a report saying the effect on earnings would not be apparent until fourth-quarter figures were released after March 31 next year, although investors were already making their own predictions.
"Investors are sceptical about what the real issues are and how much it will affect the companies' business," said Faisal Hassan, the head of research at Global Investment House in Kuwait. "It is more of a perception issue rather than what material impact it can have on the revenues," he said. "The negative impact on the stocks is just short term." Khalifa al Shamsi, Etisalat's senior vice president for marketing, said yesterday the company was "working to keep constant profit and revenues" and hoped all existing BlackBerry customers would migrate to the alternative smartphone packages the company was offering. "We are not expecting any profit losses," he said yesterday.
Shares of Etisalat, which faces the prospect of increased competition from du because of a regulatory order opening up the market, are down more than 12 per cent since hitting a 12-month peak in March. Mr Hassan said he remained bullish on Etisalat, as did Simon Simonian, a telecoms analyst at Shuaa Capital in Dubai. Mr Simonian said that at the current price of about Dh10, Etisalat shares presented "good value".
skhan@thenational.ae
