Gulf state's second telco has seen recent earnings affected by royalties increases
UAE telecommunications provider du is restructuring operations and outsourcing jobs in a bid to boost earnings, the company’s CEO told Bloomberg.
The operator, the smaller of the Gulf state’s two telcos after Etisalat, has outsourced roles in some call centres to its IT department since the start of this year, said Osman Sultan. This strategy is expected to continue throughout the year and into 2014.
“We’re entering a new phase in the life of this company, and that requires that the company shapes itself,” Sultan told the news service. He added that the company is on track with growth plans. “For this we have to do certain things like restructuring operations in the most optimal manner,” he added.
Late last year there was speculation du, which unlike Etisalat does not have any sources of international revenue, may see its earnings suffer as a result of the UAE government raising the percentage of royalty fees it must pay.
The provider has about a 47 percent share of the UAE mobile phone market, one of the areas where du actually competes with Etisalat. Customers in the Gulf state are normally provided fixed line telephony and broadband services from one of the two operators depending on where they live.
In its 3Q2012 financial results, du reported a 34 percent rise in net profit to AED326.9m (US$89m) as it increased its margins and added new mobile and fixed line customers.
Quarterly revenue was AED2.52bn, compared to AED2.23bn the year before.