UAE operator Du this week announced that the company had made a net profit of AED 31 million (US$8.45 million) for the three months to end-September, its first net profit since the company started trading in February 2007 and a year ahead of the financial plan announced during the IPO.

Total revenues exceeded AED 1 billion during the quarter for the first time, an increase of 157 per cent year-on-year to AED 1.06 billion. Revenue growth was attributed primarily to continued strong expansion in mobile revenues from new subscribers and increased international inbound roaming. In Q3 2008 Du recorded revenues from mobile subscribers amounting to AED 819 million, an increase of 233 per cent year-on-year and 22 per cent quarter-on-quarter.

Gross margin amounted to 63 per cent, up from 53 per cent in Q3 2007. EBITDA stood at AED 101 million, for the quarter, up from a loss of AED 186 million in Q3 2007

Du reported that it added 453,000 subscribers during the quarter to total 2.671 million at the end of September, with the number of active users reaching 2.07 million, up impressively from 659,000 in the same period last year.
Fixed-line subscribers reached 248,000, an increase of 30,000 in the quarter.

“Achieving net profit in just 19 months of operation is a very significant milestone in Du’s history,” said Osman Sultan, Du CEO. “This is all the more significant considering we entered a market with such a high level of penetration.”   

Fixed line revenue accounted for AED 212 million in the quarter, a 54 per cent year-on-year increase and two per cent growth quarter-on-quarter, reflecting seasonality while broadcasting revenues remained stable in the period in line with forecasts.

Capital expenditure continued in the period, with a total of AED 347 million being invested into the development of Du’s fixed and mobile networks in the UAE.

MTN Group announced that its subscriber base increased to 80.73 million as at September 30, 2008 across the group’s 21 operations in Africa and the Middle East. This represented a 9 per cent increase from 74 million subscribers recorded at the end of June 2008.

MTN closes in on 100 million mobile subscribers, the first African operator to reach that milestone

MTN’s South and East Africa (SEA) region contributed 28 per cent of the group’s total subscribers while West and Central Africa (WECA) and the Middle East and North Africa (MENA) regions contributed 44 per cent and 28 per cent respectively.

The South African operation contributes 72 per cent to the SEA region’s subscribers, with its subscribers increasing 4 per cent to 16.17 million for the quarter to end-September. Prepaid growth was underpinned by the value proposition, MTN Zone, which was enhanced to include off net calls and which continues to be a success.

Meanwhile Uganda increased its subscriber base by 16 per cent following the introduction of MTN Zone in late July, with approximately two million subscribers on this price plan at the end of September.

MTN Nigeria, which contributes 56 per cent to the WECA region’s subscriber base, recorded a 9 per cent increase in subscriber base to 20.17 million. Aggressive network rollout in Nigeria continued in Q3 with 524 base stations rolled out during the quarter. Quality of service improved significantly resulting in the advertising ban being lifted by the Regulator.

In the WECA region, MTN Zone was introduced in Ghana, Cameroon and Benin during the period under review. Ghana rolled out 377 base stations and increased its subscriber base by 14 per cent to 5.7 million.

The MENA region recorded a 10 per cent increase in subscribers for the quarter. This was mainly due to continued growth from the Iran operation, which increased its subscribers by 13 per cent to 13.14 million. Following the substantial disconnections in Q2, subscriber growth in Sudan started to show an improvement with a 7 per cent increase in its subscribers to 2.26 million.

“We are satisfied with the subscriber growth across our operations. As competition increases, MTN continues to explore growth opportunities," commented Phuthuma Nhleko, MTN Group president and chief executive officer.

Zain Group has increased its stake in Zain Iraq from 30 per cent to 62 per cent through exercising a pre-agreed call option between Zain and the owners of Athir National (Bahrain), which is one of the three founders of Atheer Telecom Iraq (Zain Iraq) for a total consideration of US$34.5 million.

Zain Iraq CEO Ali Al-Dahwi has been hard at work integrating the former MTC-Atheer and Iraqna into a single operation

Zain Iraq is the leading mobile provider in the country with over 8.5 million active customers.

“We have taken this step due to our enduring faith and trust in the future of Iraq and the enormous potential of its telecommunications industry, commented Saad Al-Barrak, CEO of Zain. “We are confident this increased shareholding will positively impact Zain Group’s future financial results in many facets, to the delight of our many stakeholders.”

Zain has been providing mobile telephony in Iraq since December 2003 (previously under the name of MTC-Atheer). In August 2007, the company acquired a 15-year nationwide licence for US$1.25 billion, shortly thereafter followed by the acquisition of Iraqna for US$1.2 billion on December 31, 2007. On January 5, 2008 Zain Group merged Atheer with Iraqna under the new brand name Zain.

Iraq has been witnessing significant growth rates in mobile users over the last few years with penetration rates now reaching 50 per cent.

France Telecom has confirmed that it has acquired a 53 per cent stake in Hits Telecom Uganda, ending months of uncertainty with respect to whether or not the Ugandan licensee’s concession would be revoked.

Hits Telecom Uganda was at risk of having its licence revoked had it not been rescued through the deal with France Telecom

As reported by Comm. in August, Uganda’s telecoms regulator, the Uganda Communications Commission (UCC), had earlier this year warned that Hits Telecom Uganda risked losing its operating licence if it did not commercially launch its network by September. The licensee was granted a mobile concession in March 2007 and was given 18 months from that date to start offering services.

Hits Telecom Uganda has built out part of its network, which is supplied by Alcatel-Lucent, and has carried out test calls, however, planned commercial launch dates were missed.

Hits Telecom Uganda – not to be confused with Hits Africa – had been backed by Middle East and African Investment Company (MEAIC), a private equity firm registered in the UAE, and owned by a number of high profile individuals and institutions of significant means, predominantly from within the Gulf region.

The universal service licence in Hits Telecom Uganda’s possession allows it to operate a range of access technologies including CDMA, GSM, WCDMA and WiMAX, and also permits the licensee to deploy an international gateway.

The cost of the acquisition by France Telecom was not revealed, though it has been speculated that the telco is looking to invest as much as US$375 million in the deployment of a network across Uganda.

Norwegian operator Telenor has acquired a 60 per cent stake in Unitech Wireless, an Indian GSM licensee with concessions to roll out its network to all 22 telecommunications circles in India. The cost of the stake was US$1.07 billion.

Telenor CEO Baksaas is confident the company can replicate the success it has enjoyed in Pakistan, in India. It became the second largest operator by market share within four years

Telenor is accused of paying too high a price for the stake and of bad timing given the global economic downturn. However, in comparison to the US$900 million Etisalat paid last month for a 45 per cent stake in Swan Telecom, which only has licences extending to 13 of India’s 22 circles, Telenor’s investment looks like shrewd business.

Telenor is the second largest foreign operator in Asia after Vodafone, and following the announcement to finance the deal through a rights issue, its shares tumbled 15.4 per cent. Shares in Unitech Ltd, the parent company of Unitech Wireless and India’s second-largest listed real estate firm, rose as much as 10 per cent in the day.

Telenor’s CEO Jon Fredrik Baksaas said that India Telenor could “replicate its experience” from Pakistan where it became second largest in terms of market share within four years.

Oslo-based Telenor is 54 per cent owned by the Norwegian government and has operations in Pakistan, Bangladesh, Thailand, Malaysia, Serbia, Russia, Ukraine, Hungary and Montenegro, as well as its home Nordic markets.