UAE operator du increased its net profit by nearly 5 per cent year on year in the first quarter of 2014, on the back of rising mobile data revenues and lower capital expenditure (capex).
The company reported a profit of 490 million dirhams (€96.2 million/$133 million) in the opening quarter of 2014, up from 488 million dirhams in the same period of 2013, on the back of a 12.5 per cent year on year rise in total revenues. The profit beat an average of 433 million dirhams predicted by analysts in a Reuters poll.
In a presentation for analysts, du said mobile data is a key market driver. Data revenues rose from 527 million dirhams in the first quarter of 2013 to 639 million in the recent quarter, and contributed 28.2 per cent to the company's mobile sales during the period.
du's mobile business remained its biggest earner in the first quarter, contributing 75.4 per cent of total revenues, compared to a 17.3 per cent contribution from du's fixed line operations--the company's second largest sector.
Mobile also dominated du's capex in the opening quarter, accounting for 49.3 per cent of its 116 million dirham spend in the period. The outlay was down from 368 million dirhams in the first quarter of 2013, and a 686 million dirham outlay in the final quarter of 2013--a spike in spending du said was associated with ongoing infrastructure investments.
The analyst statement revealed mobile will continue to dominate du's capex through the rest of 2014, as it seeks to improve its products and customer experience. Investments in new services for consumer and enterprise customers are a priority, the company said.
Chief executive, Osman Sultan, said the company plans to "actively engage with plans to implement a Smart Government across the UAE, and transform Dubai into a Smart City," during the remainder of 2014.
Domestic rival Etisalat recently reported that first-quarter net profits rose 11 per cent year on year to 2 billion dirhams.
Matthew Reed, principal analyst at Informa Telecoms and Media, said both operators benefitted from better economic conditions in the UAE over the past year, The National reported.
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