Etisalat rings in record profit

UAE phone giant also issues surprisingly high subscriber figures given that it has lost its monopoly.

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By  Rob Corder and Reuters Published  April 17, 2007

Emirates Telecommunications Corp. (Etisalat), the second-largest Arab telecom firm by market value, made a record first-quarter net profit of Dhs1.84 billion ($501 million), up 37.3% from the year-earlier period.

The earnings growth is above the average 21.7% increase in profit analysts forecast in a Reuters survey last month.

Etisalat reported a net profit of Dhs1.34 billion in the first quarter of 2006.

The company also said that it had added the most new customers ever for a single quarter, despite losing its domestic monopoly on mobile phone services when du telecom started operations in February.

Etisalat's mobile telephone users in the UAE, which account for more than 60% of revenue, grew during the three-month period to 5.78 million users, a net addition of 278,000 users from December 31.

This is the biggest addition ever in one quarter, said Marc Hammoud, senior telecom analyst at Dubai-based investment bank Shuaa Capital.

"It's very surprising. I wouldn't have expected so many net additions in mobile subscribers. That inflated the revenues," Hammoud said.

"Revenues this quarter are only from the UAE operations, that's why the results are so impressive."

Etisalat came 15th in the Arabian Business magazine Most Admired Companies in the GCC list published this week.

Last year, Etisalat won the rights to develop Egypt's third mobile network in a deal worth US$2.9bn.

It also has a 35% stake in Mobily, Saudi Arabia's second telco. As the winning bidder for Saudi Arabia's second GSM licence, it provides mobile services nationwide, breaking Saudi Telecom's monopoly in the wireless business.

Etisalat has also continued to make its presence felt in Pakistan and West Africa, and is currently looking to take a major stake in Algeria's Algerie Telecom, worth up to US$3bn.

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