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Etisalat’s profits slide in Q2

Etisalat's second quarter profits decline while revenue remains stable

Etisalat's first quarter results disappointed investors with profits falling short of expectations.
Etisalat's first quarter results disappointed investors with profits falling short of expectations.

UAE incumbent Etisalat posted disappointing results for the second quarter of the year, as competition from rival operator Du continues to bite.

Etisalat's net profits declined by 21% to AED 1.9 billion ($517 million), compared with AED 2.4 billion in the same period in 2009, while its Q2 revenue remained unchanged from a year ago, at AED 8.1 billion.

The operator said it had 7.8 million mobile subscribers in the UAE, an increase of 90,000 compared with the 7.71 million subscribers it announced in Q1. But fixed line subscribers continued to decline in Q2 to reach 1.28 million, with the company losing 20,000 fixed line customers in the quarter.

The rate of growth in the Internet sector also slowed, with Etisalat adding just 10,000 internet subscribers in Q2, to reach 1.39 million users. The rate of growth was significantly slower than in Q1, when the company added 50,000 internet users.

The results were worse than expected, with a recent poll conducted by Reuters having predicted an average net profit of $560.8 million for the telco.

The results come as Etisalat faces increasing pressure from the UAE's second operator, Du, which has put pressure on the price of telecom services in the country. Du is expected to announce its second quarter results on July 22.