Etisalat’s profit declines in Q1
Telco attributes decline to heavy investments in infrastructure including the deployment of a nationwide fibre-optic network.
UAE incumbent Etisalat experienced an 8.9% decline in profits in Q1 compared with the same period last year, despite reporting a modest increase in revenues.
The company posted a net profit of AED1.8 billion ($490 million) in Q1 2011, compared with AED1.99 billion, in the same period last year.
Etisalat's revenues reached AED8.04 billion in Q1, a modest increase of AED169 million compared to the same period in 2010 when the company posted revenues of AED7.87 billion.
Mohammed Omran, chairman, Etisalat, attributed the decline in profits to capital expenditure on its network, including the ongoing deployment of a nationwide fibre-optic network.
He said the total cost of building the fibre-optic network had reached AED6 billion, in addition to investments in a 4G network.
"These costs have constituted extraordinary pressure on net profits in previous periods but they are considered a long-term investment in the country's economy, while building the latest networks to a global level," he said.
Etisalat, which recently decided shelved a plan acquire Kuwait-based operator Zain Group and also pulled out of the bidding process for Syria's third mobile licence, remains interested in geographic expansion, according to Omran.
He said that Etisalat would continue to look at potential "investment opportunities" in markets the Middle East, Asia and Africa.