Sunday, May 13, 2012

(This story was originally published Thursday.)

--Studying the potential opportunity of an MVNO, CEO says

--MVNO license could mark first foreign foray

--Du may look at Saudi market

By Shereen El Gazzar

Of ZAWYA DOW JONES

DUBAI (Zawya Dow Jones)--Emirates Integrated Telecommunications Co. (DU.DFM), or Du, is looking at mobile virtual network operator, or MVNO, opportunities to expand its footprint for the first time outside its home market, after posting a sharp jump in first-quarter profit, the U.A.E.-based telco's top executive said Thursday.

"We have people looking at and studying the potential opportunity of an MVNO," Osman Sultan, the firm's chief executive officer, told reporters in a conference call, but noted that a final decision will be taken by the company's shareholders.

MVNOs typically rent capacity on the regular operator's network. Several telcos in the region are looking at acquiring such licenses to expand in foreign markets without incurring huge capital expenditures.

They also tend to create opportunities for both existing operators and the new entrants as MVNOs help penetrate new segments, and for regulators to create more competition instead of offering new infrastructure or facility-based licenses, some analysts say.

"Going abroad with standard mobile network operator model or looking at green fields or some merger and acquisition is not on the agenda today, but the world of telecoms is transforming. We are seeing things like MVNO," Du's Sultan said.

And one opportunity that the company could consider is in Saudi Arabia, as the Middle East's biggest economy is expected to issue three MVNO licenses this year.

"We have to look at the conditions in Saudi and other markets. We will be looking for every opportunity," Sultan said.

The Arab Gulf country's No. 2 telco--which had a 46.7% share of the domestic market at the end of March, where it competes with Abu Dhabi-bases Emirates Telecommunications Corp. (ETISALAT.AD)--earlier Thursday posted a 62% year-on-year jump in first-quarter net profit as it added subscribers and mobile data revenues more than doubled.

Du, in an emailed statement, said net profit before royalty fees amounted to 666 million U.A.E. dirhams ($181.5 million) in the first three months of the year, up from AED412 million in the year before period.

Du shares closed 1.6% higher at AED3.13 Thursday.

-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.elgazzar@dowjones.com

Copyright (c) 2012 Dow Jones & Co.

(END) Dow Jones Newswires

13-05-12 0345GMT