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UAE mobile phone market to slow - EFG

Bank says user slowdown expected in 2009 as slower population growth hits the Gulf economy.

Growth of mobile phone users in the United Arab Emirates, where penetration exceeds 180 percent, will decline sharply next year as slower population growth hits the Gulf Arab economy, EFG Hermes said.

New additions of mobile phone users at the country's two telecom operators is likely to fall to one million next year from two million this year, EFG telecom analyst Marise Anannian told reporters.

"Mobile additions are going to go down significantly to one million in 2009," Anannian said at an EFG media briefing on the UAE economy.

She attributed the likely decline to a slowdown in population growth as the second-largest Arab economy adjusts to global financial turmoil. "We expect the growth of population to decline aggressively," she said.

EFG expects UAE population growth to fall to 4.8 percent in 2009 from 6.5 percent this year mainly due to a deceleration of growth in Dubai, where companies have been cutting jobs and freezing hiring during a correction in the housing market.

Real economic growth will fall by more than half in 2009 to 3.1 percent on lower oil output and slowing consumer spending, EFG said last week.

Emirates Telecommunications Corp (Etisalat) and du had 9.1 million active subscribers at the end of September in the UAE, home to about 5.05 million people, according to EFG estimates.

Etisalat's net profit would decline almost eight percent in 2009, after surging 28 percent this year, according to EFG forecasts. (Reuters)

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