Du expects to see revenues drop in second half

Dubai: Telecom operator du said on Wednesday it expected its revenues to continue to decline in the second half of 2019, having already dropped by 5.3 per cent year-on-year in the first half of this year.

Osman Sultan, chief executive officer of Emirates Integrated Telecommunications Company (also known as du), said the company is facing challenges mainly from consumers of its pre-paid voice services. He declined to provide further details on revenue outlook for the year or how the decline will impact profitability.

“We know that the revenues that we get from international calls are not at all the same and they have been constantly declining for years,” he told reporters during a call to discuss earnings.

He said du needs to find alternative sources of revenue to make up for the decline from pre-paid services, adding that the company is looking at better monetisation of data usage.

“I know that when we say monetization of data, people imagine we’re going to charge more but it’s what I call the move for more. We want to give a lot more and in exchange get a little bit more on the revenues but on a recurring way,” Sultan said.

He explained that the company would like to offer services that would drive consumers to use more and more of its content that can be charged.

The CEO’s comments on declines in revenues from international calls comes over 18 months after the UAE’s telecom regulator banned the use of Voice over Internet Protocol (VoIP) services offered by the likes of Skype, WhatsApp, and Snapchat. The regulator blocked audio and video calls on these apps, as operators du and Etisalat pushed their own subscription-based VoIP apps that are licensed by the regulator.

Asked about the impact of that ban, Sultan said that users have managed to bypass the ban and use the blocked services anyway.

“Of course we comply by the framework and the regulations that comes from the TRA (Telecommunications Regulatory Authority). Whether some people find a way to bypass that, that’s a reality and we deal with that,” he said.

The earnings call came after du on Tuesday evening reported Dh463.8 million in profits for the second quarter of 2019, marking a 2.4 per cent gain over the same quarter in 2018. The earnings brought profits in the first half of this year to Dh913.3 million – down 5.4 per cent year-on-year.

The decline in profits in the first half came as revenues slid and provisions on impairments rose.