Etisalat, du see drop in new mobile subscribers

The UAE telecom operators – etisalat and du – recorded big drop in new mobile subscriber growth and the new additions will continue slowing down for the second half of this year due to decline in population in the country, said a study yesterday. During the second quarter, the telecom firms added only 83,000 active mobile subscribers, 73 per cent less than last quarter's additions, investment bank EFG-Hermes said in a study on the Mena telecom sector released yesterday. The bank had estimated 185,000 new mobile subscribers for the second quarter, which is lesser by 55 per cent.

Etisalat was hit badly, losing 73,000 mobile subscribers during the second quarter, while its rival du added 156,000. This gave a du a market share of 30.8 per cent versus 69.2 per cent for etisalat. "We calculate that penetration based on active subscribers reached 188.3 per cent at the end of June in the UEA. When calculated based on the total number of mobile subscribers, the penetration rate reaches 209 per cent. We continue to believe that additions will slow down significantly during second half of 2009, owing to an increasingly aggressive decline in the population," the report said. The study calculated that du's average revenue per user (Arpu) reached Dh101.5 in Q2, a marginal increase of 2.3 per cent on quarter-on-quarter, after the significant 14 per cent decline reported in the last quarter. "It seems the operator has been able to increase its usage levels despite the continuing growth of its mobile customer base. This is mainly due to the international calls revenue giving support to the Arpu," it said. Etisalat's Arpu stood at Dh179.5 in the same quarter, up from Dh175.6 in the previous quarter, an increase attributed to the shrinking of etisalat's subscriber base. During the quarter both operators continued to focus on providing offers that target international and roaming services, which EFG-Hermes believes is the most important area to focus on given the high percentage of expatriates living in the country. The UAE's mobile net additions turned negative for the first time, while negative additions in fixed-line subscribers continued for the second consecutive quarter. This is an area of concern given that the UAE operation constitutes 85.5 per cent of estimated equity value for etisalat. "We expect a further decline in the subscriber base during Q3 [after the summer]. However, strong revenue receipts suggest that the subscriber loss is mostly at the level of lower spending subscribers," it added. In Saudi Arabia, the second quarter was generally quiet with no major developments. Mobile operators continued to concentrate their efforts both on value-added services designed to sustain usage levels and on the international and roaming segment. STC expanded its roaming service for customers and introduced new fixed roaming tariffs 50 per cent lower than the original tariffs. Revenue better-than-expected in Mena EFG-Hermes said all eight operators under coverage in the Mena region reported better-than-expected revenue figures during Q2 2009, with an aggregate revenue figure of $8.1 billion (Dh30bn), four per cent better than expected $7.8bn for the quarter. At the Ebitda level, only Saudi Telecom and Zain Saudi Arabia had lower-than-expected figures, the first due to higher-than-expected access charges and the second due to its start-up nature and the volatility in its profitability indicators. Five companies had stronger-than-expected earnings figures, while three missed estimates during the quarter, partly due to one-offs. However, positive surprises outweighed the negatives ones on an aggregate basis, and total earnings for the quarter were 7.9 per cent better than expected at $1.7bn.

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