Rapid growth tipped for UAE newcomer du

The UAE's second telecom service provider du will have a mobile market share of 33% and a fixed line share of 15% by the end of 2010, EFG-Hermes has predicted.

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By  Administrator Published  January 18, 2007

The UAE's second telecom service provider du will have a mobile market share of 33% and a fixed line share of 15% by the end of 2010, EFG-Hermes has predicted.

The investment firm said it believes the operator, which is due to launch in February, will break even by 2009, with earnings for 2010 estimated at US$156.6million.

Drivers of du's growth will be strong subscriber growth, high average revenue per user, and relatively low cost of debt, the firm said.

The report is further good news for du with CEO Osman Sultan last week stating that over 750,000 mobile numbers had been reserved at the end of its ‘book my number' campaign.

Although the firm acknowledged that du will face "major challenges" in taking on an established monopoly.

"We believe that bringing ‘choice' to customers in a monopoly market will play to the natural advantages of the second entrant and will shorten the critical market share build-up phase," said Wael Ziada, senior analyst at EFG-Hermes.

"Furthermore, we believe that du's trump card will be its ability to address the monopoly's existing areas of inefficiency," Ziada added.

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