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Tue 21 Apr 2020 07:49 PM

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UAE telco Du reports 4.8% drop in year-on-year revenues for Q1

Q1 2020 EBITDA and net income were down by 10.8 percent (AED1.266bn) and 21 percent (AED335m) year-on-year respectively

UAE telco Du reports 4.8% drop in year-on-year revenues for Q1

Du’s subscriber base was up 7.9 percent yoy, to 224,000 subscribers in Q1 2020.

Emirates Integrated Telecommunications Company (EITC), Du, has announced a 4.8 percent drop in revenues to AED2.99 billion for the first quarter of 2020 compared to the same period last year (AED3.14bn), which has been blamed on a contraction in mobile and other revenues.

According to a company statement released on Tuesday, mobile revenues for Q1 declined by 9.3 percent year-on-year (yoy) to AED1.5bn “impacted by lower voice revenues and a reduction in the prepaid customer base”.

It added that mobile revenues were particularly under pressure due to movement restrictions put in place across the country amid the Covid-19 outbreak and subsequent efforts to contain the virus, which led to “a shift toward fixed usage that affected particularly the company due to the importance of prepaid in its revenue mix”.

However, this was partly offset by the fixed revenues for the first quarter of the year, which increased by five percent yoy to AED641m as a result of an increase in the subscriber base, boosted by higher home connectivity as a result of movement restrictions.

Q1 2020 EBITDA and net income were down by 10.8 percent (AED1.266bn) and 21 percent (AED335m) year-on-year respectively, driven by a decline in mobile revenues as a result of customers moving towards more prepaid options as opposed to fixed contracts.

Johan Dennelind, CEO of EITC, said: “We are now living through uncertain and unprecedented times. At EITC, we are working hard, our contingency plans have been activated, and we have implemented a raft of measures to protect our people and our operations.

“Financially, we are taking proactive cost optimisation measures to manage the erosion of the revenues, which is being driven by a reduction in mobile and ‘other revenues’.

“Operationally and capacity wise, we are in a good position to continue to sustain the increase in data traffic on our network, and remain committed to maintaining our infrastructure deployment and investment plans accordingly.”

Du’s subscriber base was up 7.9 percent yoy, to 224,000 subscribers in Q1 2020.

However, Dennelind cautioned: “Going forward, and similar to many other companies in the UAE and globally, we expect to see a material negative impact on our operations and financial results as a result of Covid-19 disruptions in particular due to the mix of our base towards higher prepaid share and lower fixed share.”

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