x Abu Dhabi, UAETuesday 25 July 2017

Telecoms firms thrive on mobile connections

What's Up: Mobile internet connections are spurring growth for telecommunications operators in the Arabian Gulf as revenues from voice calls "flatline", analysts say.

Mobile internet connections are spurring growth for telecommunications operators in the Arabian Gulf as revenues from voice calls "flatline", analysts say.

The Saudi Arabian mobile operator Mobily on Sunday posted a 22 per cent rise in second-quarter profit, which it attributed partly to the greater uptake of data packages.

Data revenue grew to 25 per cent of Mobily's total revenues during the second quarter, the firm said in a statement posted on the Tadawul, the Saudi Arabian stock exchange. The company sells smartphone packages as well as home-internet connections that run on mobile networks. Such data packages mark a big opportunity for telecoms operators in the Gulf, analysts said. "It's the data side that is exciting - that's where the growth is," said Ibrahim Masood, a senior investment officer for asset management at Mashreq.

"Voice telephony is more or less flatlining. There is no traction there whatsoever," he added.

The UAE telecoms operator du reported mobile-data revenues of Dh297 million in the first quarter of this year, more than double the amount during the same period last year. Mobile data accounts for more than 15 per cent of du's mobile revenues, the operator said this year.

Matthew Reed, a senior analyst at Informa Telecoms & Media in Dubai, agreed data services, including mobile broadband, was a growing source of revenue.

"There is a general trend across the telecoms industry for voice revenues to grow very slowly, be static, or in some cases decline," he said. "Data services will continue to account for a greater proportion of operators' revenues."

In some markets in Europe and the Asia-Pacific region, data accounts for more than half of operators' revenues, Mr Reed said. That suggested an even greater opportunity for companies such as Mobily and its rival Saudi Telecom Company.

Shares in Mobily which trade under the company's full name Etihad Etisalat Company, yesterday closed unchanged at 65 riyals.

bflanagan@thenational.ae