Tuesday, Feb 19, 2013
DUBAI (Zawya Dow Jones)--Dubai's Emirates Integrated Telecommunications Co. (DU.DFM) has scrapped plans to expand into Saudi Arabia and is instead focusing on increasing revenue from mobile data and offering enterprise solutions to corporate customers, according the telco's chief executive.
The firm, better known as Du, was looking to expand abroad through an MVNO partnership in Saudi Arabia, but the telco doesn't meet the required regulatory criteria to bid for a licence, Osman Sultan told reporters at a press conference to announce the company's results.
"I have announced previously that we are looking at something interesting like an MVNO in Saudi...we are not anymore in this situation," said Mr. Sultan.
MVNOs, or mobile virtual network operators, buy wholesale access to an incumbent operator's network and then market and sell telecoms products without having to invest in physical infrastructure assets. The Communications and Information Technology Commission (CITC) in Saudi Arabia issued a report in January outlining the process and eligibility criteria to apply for one of three MVNO licences being offered in the kingdom. However, Du does not meet at least one of the CITC requirements that applicants must already operate two MVNOs in other countries.
Discounting expansion outside the U.A.E. in the near term, Du will now focus on growing its data revenues as a percentage of its total mobile revenues from 23.8% today to nearer to 30% by the end of this year, Mr. Sultan said. The telco will also invest about 1.7 billion U.A.E. dirhams ($463 million) in its network and operations this year and look to increase revenues in its enterprise business, offering services and IT solutions to its corporate customers. Talks between Du and Abu Dhabi rival Etisalat on sharing fixed-line infrastructure are progressing slowly as the two companies currently have divergent views on the process, Mr. Sultan added, without elaborating further.
Earlier Tuesday, Du said it was planning to double its annual dividend to AED0.30 a share as it posted a 71% rise in fourth-quarter net profit
"We continue to view operational progress promisingly, as Du continues to deliver on key performance indicators," analysts at NBK Capital said in a note. "We are particularly positive on the increased dividend payout, which in turn makes Du an attractive dividend play."
Du shares last traded 10% higher at AED4.07, outperforming a broadly higher overall market.
Write to Rory Jones at rory.jones@dowjones.com
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(END) Dow Jones Newswires
19-02-13 0916GMT
