For 2016, du will pay 15 percent of its regulated revenue and 30 percent profit of its regulated profit in royalties
Du, the UAE's No.2 telecom operator, will continue to see weak revenue growth in the next two quarters and earnings from the mobile market are not enough to offset higher taxes, its CEO said on Tuesday after reporting a sixth straight drop in quarterly profit.
The company, which ended rival Etisalat's domestic monopoly in 2007, made a net profit of 480.1 million dirhams ($131m) in the three months to March 31, down from 487.1 million dirhams a year earlier, it said in a statement.
Analysts at EFG Hermes and SICO Bahrain had forecast du would make a quarterly profit of 480.7 million dirhams and 501.6 million dirhams respectively.
First-quarter revenue was 3.09 billion dirhams, up 1.3 percent on a year ago.
"I still see pressure on revenue growth, I see it continuing for the second and third quarters," du's Chief Executive Osman Sultan told reporters on a conference call.
Sultan said growth in the UAE's mobile market had declined since late 2014 and was insufficient to offset the increase in royalty - or tax - rates.
For 2016, du will pay 15 percent of its regulated revenue - which excludes the likes of handset sales - and 30 percent profit of its regulated profit in royalties. These taxes are up from 12.5 and 30 percent respectively in 2015 and have steadily increased since 2012.
Du's first-quarter pre-tax profit rose 10.4 percent year-on-year to 1.02 billion dirhams.
The company's quarterly mobile revenue slipped 0.9 percent to 2.21 billion dirhams, with mobile data now accounting for 34 percent of mobile revenues versus 30.9 percent a year ago.
The company's profits have now fallen for six successive quarters year-on-year.
Du's shares were up 0.2 percent as of 0703 GMT, while Dubai's stock index was up 1 percent.