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How has DU Contributed to the Success of the UAE’s Technological Sector?

29 July 2014
Mike Dorland

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The United Arab Emirates (UAE) telecommunications sector has been experiencing some exciting developments over the past month, with many of these relating to the second biggest of the region’s leading operators, du.

Firstly, the recently published 2014 Global Innovation Index from Cornell University, the World Intellectual Property Organization and the European Institute for Business Administration ranked Dubai and the rest of the UAE in first place regarding overall performance, with the country’s telecommunications sector potentially playing a part in this.

Commenting on the announcement, minister of state for cabinet affairs Mohammed Al Gergawi stated: “The UAE encourages innovation in the fields of internet, media, renewable energy and industries and our economy is one of knowledge and innovation-based economies as classified by the World Economic Forum, while our technological infrastructure is among the best in the world. And above all, our leadership believes that innovation is the asset of the future.”

Contributing to the country’s growth in part was telecoms operator du, which reported a significant increase in revenues for the second quarter of the year (Q2) during July. Revenue grew by 13.7 per cent for the firm during the three-month period, reaching AED – United Arab Emirates Dirham – 3.02 billion. This is the equivalent of $822,193 dollars, or £484,298.

When compared to the recorded figure for the same quarter last year, this is once again a dramatic increase, as in 2013 revenue was AED 2.66 million. 

Regarding mobile revenue, this rose by 9.5 per cent in Q2 to AED 2.26 billion, which was largely due to an increase of 18.6 per cent – or AED 680 million – relating to data revenue. In addition, fixed revenue grew by an impressive 30 per cent during the quarter, reaching AED 541 million.

In another exciting development for du, the telecoms operator has announced it will begin offering broadband and Voice over Internet Protocol (VoIP) – internet-based phone calls – services to its UAE customers as of October. Following this, IPTV – the ability to access the internet via the television – will be explored as another option to offer to customers.

This is being made possible due to a network-sharing deal with fellow telecommunications company Etisalat, with which it has been negotiating for five years. 

Reuters reports du is largely confined to offering its services in newer parts of Dubai, while rival Etisalat serves customers elsewhere within the region. 

The news provider quotes chief executive of du Osman Sultan to have told the media: “In the fixed segment, competition did not play, so strategically, going forward, this will be a very interesting platform of revenue growth for us.”

Not only has it been an exciting July for du, but it also looks to be an exciting future, with Mr Sultan predicting the company’s revenue growth for the whole of 2014 to be in the region of eight to ten per cent. 

While this is slightly lower than previous estimates of double-digit growth, the investment in expanding into new services will of course require some of the firm’s revenue to be spent on these.