du brushes aside Huawei security concerns

UAE telco du has confirmed it will continue to work with Huawei, ignoring the security complaints and warnings passing across the Atlantic from the White House.

Speaking to Reuters this weekend, du CTO Saleem Albalooshi said the telco would continue to work with the under-fire vendor as 5G deployment plans gather pace.

“Huawei is our partner in rolling out our 5G network,” said Albalooshi. “From a security perspective, we have our own labs in the UAE, and we visit their labs, we have not seen any evidence that there are security holes specifically in 5G.”

Although it does not necessarily attract the same headlines as elsewhere, the 5G revolution has been gathering pace very quickly in the Middle-East, with du one of the most advanced telcos.

Alongside competitor Etisalat, du launched its 5G networks in June. And if eye watering download speeds weren’t enough to attract the interest of consumers, du also said it was giving away free Axon Pro10 handsets from ZTE for those who pre-registered to the service.

In making this statement, the UAE becomes the latest nation to defy demands from the US, risking the intelligence-sharing relationship in place between the two countries.

“Of course, this is definitely a concern, but such a thing is the government’s decision,” said Albalooshi. “We follow our government’s roads and we are governed by the regulator.”

This is becoming an increasingly common threat from the US, though it might find itself very isolated before too long. Although losing valuable intelligence from the US is a considerable threat, the same risk goes the opposite direction. If the US severs all the relationships it has promised, it will soon find itself missing a lot of insight.

To date, the threat has been directed towards the UK, Germany, India, certain states in Eastern Europe, and most recently, Italy.

The US is a powerful voice in the international political community, but perhaps it is not as influential as it believes. The number of countries who are choosing to ignore the requests of the US are starting to add up.

Du profit jumps 15% on increased postpaid share and efficiencies

UAE operator group Du managed to post a healthy jump in profits in Q4 2017 thanks to increasing its number of high-value subscribers.

Net profit after royalty (which seems to mean payments to the state in some form or other) jumped 14.9% year-on-year on revenue that remained pretty flat, implying a fairly significant margin improvement. There don’t seem to have been any significant one-offs so the increased profit seems to just be down to doing things better.

“The successes achieved last year are an indication that the strategic transformation our company has undertaken is enabling us to adapt to the evolving industry and accommodate the changes in customer and business behaviour,” said Ahmad Bin Byat, Chairman of EITC (the proper name for Du). “Our strategic goals have the UAE at their core, contributing to the nation’s sustainable growth through digital transformation. During 2017 we made good progress in this regard, having developed the Dubai Smart City platform, now fully operational, with core infrastructure in place and delivering.”

Commenting on the results, Osman Sultan, EITC’s Chief Executive Officer, said:

“Looking at our financial performance, I am pleased to report a record Revenue of AED 13 billion for 2017, representing a 2.2% increase over 2016,” said Osman Sultan, EITC’s CEO. “This comes as we continue to attract higher quality customers resulting in a 12.3% growth in our post-paid segment during the year, stimulated by our increased focus on that segment. Revenue growth was also supported by a solid performance in our fixed line business.

“Net Profit after Royalty had an excellent growth quarter on quarter, up 14.9% in Q4 2017 to AED 425 million, which helped maintain a stable annual Net Profit after Royalty of AED 1.71 billion, recovering from a weak quarter in Q1 2017. Growth was supported by the increase in revenue, improvement in gross margin and the impact of our cost optimisation programme. EBITDA margin is solid at 40% for the year.”

The Middle East has been one of the parts of the world where telecoms investment has seemed to remain buoyant as it tails off in North America and Europe. Some of this could be as a result of sovereign wealth funds moving away from areas that have failed to live up to expectations, such as construction, but the region also seems to see 5G as a broader economic strategic opportunity, so it wouldn’t be surprising to see this investment continue and for the region to be a global test-bed, to some extent.