Etisalat considers massive restructuring in face of challenging market environment

Etisalat has hinted at a wide-ranging restructuring of its business to cope with current challenges.

In a statement, Etisalat said that its board had discussed "the reduction and control of operating expenditures by initiating restructuring and outsourcing plans as a future strategy."

"These suggestions aim to enable Etisalat to cope with the pace of development witnessed in the ICT sectors and face financial challenges that telecom providers across the world, including Etisalat are facing due to rising costs of new technology necessary for organisations to increase their competitive edge in local and international markets, accompanied by drop in revenues of the global telecom industry," the telco added.

Etisalat’s 2011 net profit fell 24 per cent to AED5.8 billion (US$1.6 billion), dampened by a AED1 billion impairment following the recent decision by the Supreme Court of India to cancel 122 2G licences, including that of Indian subsidiary, Etisalat DB. Full-year revenue rose one per cent to AED32.2 billion. Subscriber numbers grew 22 per cent to 167million at the end of 2011.

Etisalat also reduced its capital expenditure during 2011 by 27 per cent to AED4.3 billion following the investment in FTTH in 2010. Capex in international operations was also reduced by “political unrest in Egypt and the on-going uncertainties in India,” which resulted in consolidated capex representing 13.3 per cent of consolidated revenues in 2011 compared to 18.4 per cent in 2010.

"As we develop our international networks and drive greater efficiencies across the group, our overseas operations continue to perform strongly. In particular there were solid performances from Atlantique Telecom in West Africa and Etisalat Misr in Egypt, which witnessed a 40 per cent growth in subscriber numbers,” said Group CEO Ahmad Abdulkarim Julfar.