Du to boost spending on mobile infrastructure
Du CEO: "We will invest in our infrastructure to accelerate our mobile broadband coverage"
Du CEO Osman Sultan said most of the funding from the AED1 billion ($272.2 million) rights issue announced today would be spent on improving the firm's mobile business, which he described as the "main driver" of the telco.
"We will be investing in our infrastructure and we will be investing in continuing and accelerating our mobile broadband coverage," said Sultan, who added that he expects UAE residents' appetite for access to the internet and related services to continue to grow unabated.
"More and more, customers are requesting to have access to bigger and bigger and larger content at higher and higher speeds," Sultan said. "Whatever the technology is, we need to bring it...this is the world of tomorrow, and this is the digital world."
"If you look at the expansion of the capacity that has been needed over the last two years, this is not going to stop, and Du is going to be there. We have our plan for the coming three to five years and we are putting into place the optimal funding structure to make this happen," Sultan added.
Du's strategy of targeting higher spending customers, which it kicked off in April last year when it launched a range of "Elite" postpaid tariffs, will also be ramped up over the next two years.
And Sultan said that through a series of partnerships Du would begin to push into the periphery of its current business.
"This is in relation to this world of the internet, the world of digital content and the world of social networking, like all other operators," Sultan explained. "This is in order for us to find tracks of growth, but we don't think this will be capital intensive for the coming three to four years, so this is to prepare for what we believe is the world for telecom operators in five, six or seven years from now."
At the start of this month Du announced a $269 million deal with telecom infrastructure vendor Nokia Siemens Networks for the expansion of the operator's 2G network, which is primarily used to carry voice calls, and Sultan confirmed that such arrangements would continue to play a role in Du's finances, with similar vendor financing announcements to be made soon.
Sultan also confirmed that "some capital investment" would be needed for Du to offer fixed internet services across the UAE and beyond the small pockets of new developments in Dubai that it currently operates in.
"We are not saying that investments are needed because we intend to go and put in fibre and build a nationwide fibre network - the network is already there. Through an infrastructure sharing agreement we will have access to customers, but nevertheless investments are needed."
Talks regarding the sharing of fixed infrastructure with incumbent operator Etisalat have been taking place since last year, and Sultan said that although progress is being made, there are still some key issues to resolve.
"Discussions are moving, but these are not discussions that take place over night," he said. "They involve a technical part, a pure network part, processes between the operators and it involves a commercial part. All these fronts are progressing. I still believe that somewhere down the road in the second half of this year we will be able to start ramping up commercial services, but I cannot really be more precise that that."