Etisalat Group’s third-quarter net profit after royalty remained steady at AED 2.3b when compared to a year ago despite tough market conditions.
The Abu Dhabi-listed telecom operator’s group revenue fell 1.51% to AED 13b when compared to AED 13.2b a year ago.
The pre-paid mobile market is under pressure for the last few quarters due to weak consumer confidence and telecom operators have been focusing on post-paid mobile market to increase the average revenue per user and keep their revenues and profits from decreasing.
According to research firm International Data Corporation, telecom services are feeling the impact of weak consumer confidence and a slowdown in mobile data services.
Even in 2020, the spending in the telecom sector is expected to grow the slowest at 1.01%.
Sukhdev Singh, executive director at research and consulting services provider Kantar, told TechRadar Middle East, that most businesses in the UAE are facing headwinds for the last two to three years, impacting the overall economy in many ways, including the usage of telecom services.
However, he said that Etisalat has managed to broadly retain its bottom-line despite shrinking revenues. “As we get closer to the Expo 2020, which kicks off in the fourth quarter of 2020, economic activities are expected to pick up and help telcos ahead of other sectors,” he said.
Nine-month profit up 2.1%
However, the operator’s nine-month profit amounted to AED 6.7b, an increase of 2.1% compared to the same period last year while its revenues reached AED 38.8b, a decrease of 1.52% to AED 39.4b.
In the UAE, the subscriber base reached to 12.4 million subscribers, while the group’s aggregate subscribers reached 148 million subscribers representing a year on year increase of 5%.
Consolidated EBITDA totalled AED 6.8b, representing an increase of 3% year over year and resulting in earnings before interest, tax, depreciation and amortisation (EBITDA), a measure of a company's operating performance, a margin of 52%.
Etisalat, which operates in 16 markets across the Middle East, Africa and Asia, is investing more than AED 4b in rolling out 5G network base stations this year in a bid to stay ahead of its Middle East peers.
The operator has installed 700 base stations in the UAE out of the 1,000 base stations planned to cover 30% of the populated areas with 5G this year.
5G era opens new opportunities
Saleh Abdullah Al Abdooli, CEO of Etisalat Group, said that the 5G era has opened a world of opportunities to enable the deployment of innovative solutions and services across different sectors which will accelerate digital growth, drive efficiencies and enrich the overall customer experience.
“With continuous collaboration with our partners in the public and private domains, we are well geared to deliver 5G innovative solutions that will alter and reshape our society and industry on a large scale,” he said.
Even though local telcos are taking a lead in offering 5G networks, Singh said that the 5G pickup is not likely to break the ceiling anytime soon, given the limited handsets in the affordable range.
“Furthermore, the excellent 4G network in the UAE leaves a little need to have anything faster except for its novelty factor. IoT and M2M adoption are likely to help the 5G adoption more than the consumer demand in the initial phase,” he said.