Du net adds outstrip Etisalat; targets profitability by early 2009

25 Jul 2008

Local newspaper The National reports that mobile operator Du signed up more twice as many mobile subscribers than rival Etisalat during the second quarter. The cellco, which launched in January 2007, added 500,000 customers in the three-month period to bring its total subscriber base to 2.3 million, while Etisalat gained only 200,000, taking its total to 6.8 million. ‘The right value proposition is creating momentum,’ said Osman Sultan, CEO at Du. ‘Do not underestimate the importance of being better value for money,’ he added. However, the newspaper states that as much as 20% of the company’s customer base is reported to be inactive. Industry observers say the high proportion came about after the company’s number pre-booking offer led to many people reserving a number on Du’s network, but keeping their Etisalat connection as their main line. Sultan said he expected the percentage of inactive customers to decrease as new subscribers were added. ‘We have been carrying a large number of inactive customers from the very beginning,’ he stated.

In the fixed line arena, the executive said that 20% of the company’s revenues now come from voice telephony subscribers. The Telecommunications Regulatory Authority (TRA) plans to further liberalise the wireline market through its carrier pre-selection (CPS) policy, and Du hopes to take advantage. ‘It will be a breakthrough,’ said Sultan. ‘It will allow us to provide seamless triple-play [voice, internet and television] services nationwide, which is something we can’t do today.’ Sounding a note of caution, however, he said that he thought it unlikely that the technical work needed to implement CPS would be completed by the end of the year, the date initially targeted by the TRA.

For the three months ending 30 June Du posted a net loss of AED43.8 million (USD11.9 million). After it launched last year the company claimed it would become profitable by the end of 2009. Sultan now expects this point to come almost one year early. ‘Being conservative, I estimate the first quarter of 2009 to be positive,’ he said. ‘It might be even the last quarter of 2008.’