Du earnings will continue to grow amid competition - CEO

Analysts estimate that the telco may announce a 57% increase in Q3 earnings to $33.5m
DU DEAL: The financing deal was arranged by Nokia Siemens Networks (NSN). (Getty Images)
By Bloomberg
Sun 17 Oct 2010 11:27 PM

Emirates Integrated Telecommunications expects earnings to continue to grow even as competition in the UAE intensifies, chief executive officer Osman Sultan said.

“If we’re talking compared to last year, Du is a good growth story and will continue to grow” with respect to earnings, Sultan said in Dubai on Sunday.

Profit at the company known as Du more than doubled in the second quarter from a year earlier as its client base grew.

Du may this week announce a 57 percent increase in third quarter earnings to 123 million dirhams ($33.5 million) according to a mean estimate of two analysts in a Bloomberg survey.

Shares of the company, which competes with Emirates Telecommunications Corp, or Etisalat, surged 32 percent in the third quarter and closed at 2.95 dirhams on the Dubai bourse today.

Du has about 4 million active mobile subscribers and expects its customer base to grow at a slower pace next year.

The company has a 37 percent share of the mobile market in the UAE and sees that rising to 40 percent by the end of next year.

Sultan said: “Growth is going to become more and more challenging because of the levels of penetration, I see this intensifying."

The company expects “substantial” growth among internet and data users in 2011.

The Dubai based phone company obtained $255 million in financing from the Export-Import Bank of China this month as it seeks to repay debts and upgrade its network.

Du plans to spend at least $598.96 million this year and about the same amount in 2011, Sultan said May 11.

The phone company does not plan to issue bonds in the immediate future, Sultan said. “At the end of the year we will study different things we may need to do.”

The company will start offering services through a network sharing arrangement with Etisalat in the first half of 2011 after a delay, Sultan said.

The company has no plans to expand operations outside the UAE and plans to grow through offering regional internet and digital services.

Sultan said: “Du going in the track of regional expansion in the traditional model either by licenses or acquisition will be value destructive for the company and its shareholders."

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