Etisalat announces 25% dividend to shareholders and 25% increase in gross profit :: Strategiy

Quote:

The year witnessed commendable growth in all major areas. Mobile connections reached 4.5 million lines, a 23% increase over 2004. This service has remained the main contributor to revenue, with a share of 58% during the year. The UAE can now boast of nearly 100 per cent penetration – this is comparable to the most advanced countries in the world. Fixed lines also saw a marginal growth of 4% to reach 1.2 million installed lines. Total Internet connections, including high-speed internet access, crossed the half million mark during the year.

Unless the population of the UAE has grown more than 0.3 million in the 6 months since Etisilat made a similar pronouncement, that amounts to more than 100 per cent penetration. At least by whatever method Etisilat uses to measure penetration.

Perhaps this explains Etisilat's captive customers' (i.e. any phone user in the UAE) use of the "r" word in referring to Etisilat rates. Too bad Etisilat blocks downloading Skype, etc. At least there's a duopoly in our future. But some foreign competition would be nice.

The irony is, although the UAE collect royalties of 50% on Etisilat profits, the UAE it would be a lot better off if it opened its borders to competition in telephony. All the Etisilat monopoly does is make it more expensive to do business here whether directly (stifling development of call centers) or not so directly (raising the cost of living for the imported labor which translates into higher wages necessary to attract labor from overseas).

And after all, the business of the Emirates is business.

TAGS: Etisilat UAE telephony