du notes profit gains, market share loss

du, the number two operator in the United Arab Emirates, has said it will focus on profitability and worry less about market share, after reporting second-quarter results earlier this week.

The operator reported an impressive 57.1% increase in net income, year on year, to 651 million dirhams ($177 million), but noted a slight fall in its mobile market share, to 46.5%, due to renewed competition from rival Etisalat.

du, the number two operator in the United Arab Emirates, has said it will focus on profitability and worry less about market share, after reporting second-quarter results earlier this week.

The operator reported an impressive 57.1% increase in net income, year on year, to 651 million dirhams ($177 million), but noted a slight fall in its mobile market share, to 46.5%, due to renewed competition from rival Etisalat.

Sales rose by 12.9%, year on year, to 2.5 billion. The company also continued to sign up new customers, despite the loss of mobile market share, adding 196,300 mobile subscribers (but just 36,300 post-paid ones) and ending the quarter with 546,600 fixed-line customers, 10.6% more than in the same period last year.

Osman Sultan, du’s chief executive, says the company is now entering the next phase of its evolution and needs to focus on driving efficiencies and innovation.

The comments appear to reflect a recognition that Etisalat is doing a better job of defending its market share than in previous years. du first entered the market in 2007 and few would still consider it to be a new entrant.

du will be encouraged, however, by the growth of its mobile data business. Revenues soared by 84.8%, year on year, to 278 million dirhams.

Nevertheless, mobile ARPU has fallen from 188 dirhams a month in the second quarter of 2011 to 112 dirhams now, as spending on voice services continues to fall. The metric also shows that du is still reliant on new sign-ups for revenue growth.