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Thu 1 May 2014 11:06 AM

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UAE telco du Q1 profit rises 4.8%

Mobile accounted for more than half of telcom operator's revenue

UAE telco du Q1 profit rises 4.8%

Du, the United Arab Emirates' No.2 telecom operator, reported a 4.8 percent rise in first-quarter net profit on Thursday, beating analysts' estimates as it reduced capital expenditure and revenue rose.

The firm, which ended rival Etisalat's domestic monopoly in 2007, made a net profit of AED490.3m ($133.5m) in the three months to March 31, up from AED467.9m in the year-earlier period, according to a bourse statement.

Analysts polled by Reuters on average forecast du would make a quarterly profit of AED433m.

First-quarter revenue was AED2.96bn. This compares with AED2.63bn a year ago. Mobile accounted for more than half of du's additional revenue.

That rise comes despite du's average revenue per user (ARPU) falling 9 percent year-on-year to AED100.

Du's costs fell to 24.8 percent of first-quarter revenue from 26.6 percent a year ago as sales and marketing spending dipped relative to income and the company reduced its bad debts.

Du's quarterly capital expenditure also fell by more than two-thirds to AED116m.

Mobile accounted for 75.4 percent of du's quarterly revenue, fixed services 17.3 percent, wholesale 5.9 percent and broadcasting 1.4 percent.

Data provided 28.2 percent of mobile service revenue. This was up from 24.6 percent in the prior-year period.

Du now has a 47.3 percent share of the UAE's mobile subscribers, but only a 30.4 percent share of the UAE telecom sector revenue, with rival Etisalat claiming the remainder.

Postpaid subscribers, which account for nearly a tenth of du's mobile subscribers, made on average 611 minutes of calls in the first quarter, nearly triple the average for pay-as-you-go customers of 207 minutes. The latter segment was down from 223 minutes in the year-earlier period.

Fixed revenue rose 28 percent to AED511m, outpacing a 7 percent increase in fixed line subscribers.

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