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Tue 3 Nov 2015 10:04 AM

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UAE telco du Q3 net profit declines 12.3% as royalties burden rises

Country's 2nd largest operator reported number of subscribers dropped to 7.28m, down 3.2% in the last year

UAE telco du Q3 net profit declines 12.3% as royalties burden rises

Du, the United Arab Emirates' second biggest telecommunications operator, reported a 12.3 percent fall in third-quarter net profit on Tuesday, missing analysts' estimates.

The firm, which ended rival Etisalat's domestic monopoly in 2007, had also reported declining profits in the preceding three quarters.

Du made a net profit of AED489.8 million ($133.4 million) in the three months to September 30, down from AED558.7 million in the year-earlier period, the company reported in a bourse filing.

Two analysts polled by Reuters had on average forecast du would make a quarterly profit of AED521.3 million.

Third-quarter revenue was AED3.05 billion, compared with AED3.03 billion a year ago.

The operator had 7.28 million mobile subscribers as of September 30, down 3.2 percent from 12 months earlier. Du attributed this to the effect of the UAE Telecommunications Regulatory Authority's 'My Number, My Identity' campaign, which required all users to register their mobile numbers to protect privacy and avoid fraud.

Du paid royalties - or tax - of AED481.85 million in the three months to September 30, up from AED413.04 million in the prior-year period.

For 2014, du paid 10 percent of its regulated revenue - which excludes the likes of handset sales - and 25 percent of its regulated profit in royalties. These taxes have risen to 12.5 and 30 percent respectively this year.

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