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Mon 13 Apr 2009 12:00 PM

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Mobile firm Du braced for dip in subscriber growth

UAE’s second network to focus on broadband as mobile growth begins to slow

Mobile firm Du braced for dip in subscriber growth
Du CEO Osman Sultan said the company was keeping a close eye on market indicators as it prepares for a flatter rate of growth

UAE operator Du expects to see a slowdown in the rate of growth of its mobile subscriber base, the company’s CEO warned yesterday.

The UAE already has some of the highest mobile penetration rates in the world, while analysts at Dubai-based investment bank Al Mal capital last month predicted the telecom sector would be hit by a 4.2 percent fall in the UAE’s population.

Du CEO Osman Sultan said that the company was keeping a close eye on market indicators as it prepares for a flatter rate of growth.

“We don’t expect the number of subscribers to fall down; we expect to see growth, but maybe in line with the more challenging context,” he said.

“In the first year we were growing by 150-160%, then we grew by 100%. So maybe instead of growing by 60-70% we will grow by 25%. It’s very difficult to tell, but we are looking very carefully at daily, weekly and monthly indicators and trying to assess.”

Despite the anticipated slowdown in growth in the UAE, Sultan said there are no plans for the operator to add to its subscriber base by expanding abroad.

As well as targeting consumers with “higher purchasing power” with its latest “Elite” tariff which was unveiled yesterday, Sultan said that he wanted the operator to focus on broadband, which he said was in need of a “profound transformation” in the UAE.

Broadband connectivity across the UAE is mainly provided by Etisalat, with Du connecting homes and businesses in some areas of Dubai.

Talks regarding the sharing of broadband infrastructure are currently taking place between Du, Etisalat, and the UAE’s telecoms regulator the TRA.

“Broadband for us means fibre optic, and fibre optic is not like the mobile network where you build the network. It is about digging and putting in ducts, and this is not something we believe in doing,” Sultan said.

“There is already an infrastructure in the country. If you consider that the major shareholder for Du and Etisalat is the same, I think there is rationale behind that, to use the same infrastructure.”

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