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All Du respect

All Du respect

This week, Du’s Q3 report recorded an all time high profit of Dh163 million. Kipp takes a closer look at recent news surrounding Du.

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November 8, 2010 4:58 by



Du. It is an impressive story. Entering the telecom market at a time when it was dominated by a monopoly – a thirty year old monopoly, at that – is no easy feat. Three years later, Du reports a healthy, impressive 37 percent share of the UAE mobile market.
Du’s increasing presence in the UAE telecom market is one of the reasons analysts say Etislat has suffered a 23 percent decline in profit in its third quarter report. This week Du is in the spotlight as Kipp takes a closer look at where it came from, where it’s at and where it is headed.

Recent achievements: du’s Q3 report
This week Du reported a record profit of Dh163 million. According to The National, in the third quarter of 2010, du added 159,800 new subscribers, a significantly higher rate than Etisalat’s 10,000 new subscribers added this quarter. Du Q3 profits are both significantly higher than last year’s level (Dh.78.5 million) and analyst’s expectations (Bloomberg predicted a profit of Dh.148 million)

About du
Launched in February 2007 by Emirates Integrated Telecommunications Company under the brand name “du”, the majority of the company (just under 40 percent) is owned by the UAE government (a fact that causes naysayers, Kipp included, to often complain that du is no different than Etisalat). According to its own website, Du is owned by the Emirates Investment Authority (39.5 percent), Mubadala Development Company (19.75 percent), Emirates Communications & Technology Company LLC (19.5 percent) and by public shareholders (21.25 percent). Du offers fixed and mobile telephony, broadband connectivity and IPTV services to individuals, homes and businesses. Commended for its Emiratization efforts, 20 percent of Du’s 2,000 workforce are Emirati, and they make up 35 percent of the senior management.

Competitive edge
Amongst Du’s attempts to differentiate itself from Etisalat (from cheaper start up costs to absolutely no annual renewal charges) perhaps the most distinctive plan is Du’s charge per second policy — as opposed to Etisalat’s charge per minute policy. In the recent months, as more of the UAE mobile market began to switch to Blackberry’s, Du capitalized on the change by offering a specialized package (this was before the infamous BlackBerry ban saga, of course). Du special BB package gave BB users free service for the first three to six months and a 50 percent discount on international services. Quite a good deal, and boy, did a lot of Kipp’s friends take advantage, often Du first timers. Anecdotally, Kipp can think of at least eight different friends who switched to Du this year.



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2 Comments

  1. Andrea on November 9, 2010 10:56 am

    Let’s not fool ourselves, Kipp: this is a market with ample potential for 3, maybe even four operators.

    The fact that the government is barring anybody else from entering the market is an anti-competitive policy that explains how these two operators can remain profitable in spite of embarrassingly poor customer service and fenomenally high prices.

    Neither of these two operators could survive in any healthy, competitive market like the ones found in other parts of the world.

    And we – the customers, that is – are paying the brunt of this anomaly.

     
  2. Andrew on November 10, 2010 8:08 am

    If my company operated in a du(opoly) environment and received price protection from the regulator for the first 3 years … I’d be pretty damn successful too.

     

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