x Abu Dhabi, UAEWednesday 26 July 2017

Du to pay royalty charge for first time

Telecoms operator to pay 15 per cent of earnings to Government.

ABU DHABI // Du, the UAE's second-largest telecommunications operator, will pay the Government royalty charges this year for the first time.

The company has been exempt since it launched mobile services in 2007, to help it to become profitable while competing with Etisalat. Du will now have to pay a fee of 15 per cent of its earnings from last year, it said in a statement yesterday to the Dubai Financial Market.

The company is due to report its 2010 fourth-quarter earnings next week, which will determine how much it has to pay. It earned Dh795 million in the first three quarters. Its future royalty fee will be "will be advised to the company in due course", it said.

Etisalat pays half its earnings as a royalty charge. Last week it announced profits of Dh7.631 billion for last year.

Mohammed Omran, the chairman of Etisalat, has said he would like to see its royalty charges lowered. The head of telecommunications investments for Emirates Investment Authority, the sovereign fund that is a major shareholder in both Etisalat and du, said last year that the royalty payments were not sustainable.