In an exclusive interview with Telecom Review, du's CEO, Fahad Al Hassawi, elaborated on the company's commitment to fostering a more prosperous future grounded in knowledge and innovation. He discussed various aspects, including du's remarkable financial performance, ongoing commercial initiatives, digital innovation endeavors, expansion in fintech, robust workforce, sustainability objectives, and key targets set for 2024.
du delivered a historic financial performance in 2023. How did this underscore the company’s commitment to digital transformation and accelerated growth?
du has demonstrated its unwavering commitment to digital transformation and accelerated growth through its historic financial performance in 2023. The company's record-breaking revenues, expansion of gross margins, and investment in core infrastructure and IT illustrate its dedication to embracing the digital age and meeting ever-changing customer demands. Furthermore, the company's alignment with government initiatives and support for economic and social development in the UAE reflects its role as a key partner in the country's digital growth journey.
The company's full-year revenues increased by 6.9% to AED 13.64 billion, highlighting the sustained demand for mobile services and strong growth in postpaid and fixed services. du's EBITDA surged by 12.8% to AED 5.80 billion, showcasing the expansion of gross margins and disciplined cost management. The net profit reached an impressive AED 1.67 billion, a 36.8% increase year-over-year, reflecting strong EBITDA growth. This remarkable performance underscores the company's ability to drive top-line growth and margin expansion.
In terms of operating highlights, du witnessed an 8.3% growth in its mobile customer base, reaching 8.6 million subscribers. Strong net additions in the last quarter were driven by a significant increase in prepaid customers, benefiting from seasonality and promotional campaigns. The postpaid customer base also grew by 10.5% year-over-year to 1.6 million, driven by data-centric plans and attractive offers.
The fixed customer base saw a robust 12.6% year-over-year growth, ending the year with 604,000 subscribers. This impressive performance was a result of ongoing commercial efforts in various product categories and the successful implementation of du's broadband strategy.
From a financial perspective, du experienced significant growth in revenues, with Q4 revenues growing by 7.3% year-over-year to AED 3,558 million, and full-year revenues growing by 6.9% to a record-breaking AED 13,636 million. Mobile service revenues also saw a substantial increase of 6.2% year-over-year, reaching AED 6,105 million for the full year.
du's capital expenditure (CapEx) in Q4 2023 amounted to AED 759 million, while the full-year CapEx was AED 2,198 million, remaining stable compared to the previous year. The focus of CapEx was on the expansion of the 5G network, deployment of fiber, and the transformation of the existing IT and network infrastructure.
The company has achieved significant operational milestones, including expanding the 5G network to 98.5% population coverage and increasing the digitalization of customer touchpoints. du has been recognized with multiple industry awards for its innovative product offerings.
du remains aligned with the country's strategic plans, complies with the directives of the wise leadership, and supports the vision for a more prosperous future built on knowledge and innovation. The company has also provided extensive support for government initiatives and policies aimed at accelerating economic and social development in the UAE.
What factors contributed to du's record-breaking results?
du's historic financial performance in 2023, with record revenues, gross margin, and EBITDA, reflects its strong performance in the core business and accelerated growth in new business ventures. The company remains committed to its digital transformation strategy, investing in core infrastructure and IT, and enhancing customer experience. du aims to reinforce its leadership in the core business through a differentiated digital-first approach, disruptive customer-centric innovation, and operational efficiencies.
du's achievement of these results can be attributed to a combination of key factors in line with the CEO's strategy. Firstly, du has capitalized on a strong macroeconomic environment, demonstrating the company's ability to thrive in a competitive industry. This financial stability has allowed du to invest in its brand and customer experience, ensuring continued success. The expansion of its 5G coverage has positioned the company at the forefront of technological advancements, offering customers faster speeds and enhanced connectivity.
du has strategically focused on segments that leverage technological innovation, employee development, and sustainability. Moreover, du has proven its ability to collaborate effectively with partners on various projects, including mobile services, cloud computing, and other ICT solutions. These collaborations have accelerated digital transformation in the UAE, showcasing du's commitment to innovation and delivering impactful technological solutions.
What are the ongoing commercial efforts in various product categories that support du’s successful nationwide 5G implementation? What is the status of du's 5G coverage, and how does it enable digital innovation?
du's ongoing commercial efforts in various product categories have been instrumental in supporting its successful nationwide 5G implementation. These efforts include the expansion of du's 5G coverage, which now reaches an impressive 98.5% of the population. This extensive coverage ensures that a vast majority of customers across the UAE can benefit from the high-speed and low-latency capabilities of 5G technology.
In addition to expanding coverage, du has also prioritized the digitalization of its customer touch-points, with over 80.7% of customer interactions now taking place online. This shift towards digital channels has not only improved the efficiency and convenience of customer experiences but has also allowed du to leverage data and analytics to personalize services and offerings for its customers.
du has fostered strategic partnerships with key institutions in the UAE. These partnerships enable du to collaborate with industry leaders and leverage their expertise in driving digital innovation.
In addition to these efforts, du has also made significant advancements in multi-carrier aggregation technologies within its commercial wireless network. By aggregating carriers within the C-Band and 2.6 GHz bands, du can deliver data speeds three times faster than what is currently available to users in the UAE. This enhancement is particularly significant for du's home wireless services, which have gained popularity among users. The multi-carrier aggregation allows du's subscribers to enjoy bandwidth-intensive applications such as artificial intelligence (AI), 8K video streaming, metaverse functionalities, and UHD cloud gaming without any compromise on performance or quality.
As du continues to invest in and upgrade its 5G technology, including the adoption of 5G-Advanced, the company remains committed to providing its customers with best-in-class solutions that address their evolving technology needs and supporting the UAE's vision for greater technology usage and innovation in all aspects of the country's development.
As a leading digital telco, du will work on building a 5G-Advanced country in the UAE. Why is this important? How will 5G-Advanced enable digital innovation further? Can you provide details on du's smarthouse project, which is utilizing 5G technology?
As a leading digital telco in the UAE, du is dedicated to spearheading the development of a 5G-Advanced country. This strategic initiative holds immense importance as it will pave the way for increased digital innovation and drive the transformation of industries across the nation. One of the key advantages of 5G technology is its ability to enable digital innovation on a whole new level. With 5G, the UAE will experience ultra-fast and low-latency connections, unlocking unprecedented opportunities for businesses and consumers alike. From autonomous vehicles to smart cities, the possibilities are endless.
To showcase its commitment to this vision, du has embarked on a groundbreaking project in collaboration with Huawei. The company has unveiled the world's first 5G-Advanced demonstration Villa. This architectural marvel is a testament to the seamless integration of cutting-edge technologies, offering an unparalleled smart home experience.
The 5G-A Villa serves as a glimpse into the future of connected living, empowered by a staggering 10 Gbps network. It showcases the convergence of various applications such as naked-eye 3D and XR, adding a new dimension to user experiences. By offering incredible 10 Gbps connectivity indoors, du is redefining the boundaries of internet connectivity for its valued subscribers.
Moving forward, du remains committed to building the best 5G networks in the UAE and exploring the commercial use of 5G-Advanced technology. The 5G-A Villa represents just the beginning of this journey as the limitless potential of 5G-Advanced technology continues to unfold. With the latest FWA solutions, du is poised to unlock vast business opportunities and reimagine the concept of smart home living.
du's focus on building a 5G-Advanced country in the UAE is crucial for enabling digital innovation and shaping the future of industries. Through groundbreaking projects—like the smarthouse and partnerships with industry leaders like Huawei, Nokia and Ericsson—du is paving the way for a connected and technologically-advanced nation.
In what ways has du leveraged ICT to drive digitalization?
du has collaborated with government entities to leverage ICT and drive digitalization in several impactful ways. For instance, the successful completion of the Dark Factory project for Industry 4.0 highlights du's contribution to integrating robotics and automation in manufacturing, driving efficiency, productivity, and sustainability.
Additionally, du's collaboration with the Dubai Municipality has transformed the park experience for visitors through a seamless ticket journey initiative. As of December 2023, eight parks have implemented this platform, enabling ticketless entry and ensuring a hassle-free user experience.
Furthermore, du's partnership with the Environment Agency Abu Dhabi (EAD) has resulted in the development of the naha community app. This groundbreaking app promotes environmental awareness, climate action, and sustainability, particularly among the youth, through personalized digital platforms.
du has also played a key role in supporting various government entities in their digitalization efforts. For example, they have provided top-tier data centers to host ENBD's complete IT systems, reflecting the trust placed in du's exceptional data center services for optimal performance, reliability, and security.
Moreover, the collaboration between du and Microsoft has led to the launch of an ICT marketplace, offering customers a comprehensive digital platform to access a wide range of innovative ICT solutions.
Finally, du's technology has enabled the launch of smart services for the Dubai Digital Park in Dubai Silicon Oasis (DSO). These services promote a holistic and integrated platform for district management, breaking traditional information silos and fostering a more responsive and efficient ecosystem in Dubai.
What initiatives has du taken in the fintech sector, and how have they contributed to the company's success?
The convergence of telecommunications and financial services has created a significant opportunity for telcos to enter a rapidly growing payment and digital banking market. EITC has taken a strategic initiative to enter the fintech sector in line with its vision for development and innovation in the UAE. It has received licenses from the Central Bank of the UAE to offer new digital financial services, positioning the company at the forefront of the evolving fintech landscape in the region. These licenses enable EITC to introduce financial solutions that will contribute to the development of a modern and future-ready financial ecosystem in the UAE.
This development aligns with the ongoing initiatives of the UAE government to promote financial technology and foster innovation, competition, and financial inclusion by promoting a cashless society. By leveraging its core capabilities, EITC aims to empower individuals and businesses with convenient, secure, and efficient solutions that simplify their financial transactions and meet their diverse needs. EITC's entry into digital financial services will enhance the UAE's financial landscape, focusing on customer-centric solutions. This shows EITC's commitment to innovation and adaptability to the digital era. EITC aims to contribute to the UAE's growth and be a pioneer in fintech collaboration and innovation.
Could you provide insights into the strategies implemented by du that aim to foster employee engagement and promote a positive culture within the organization?
du's commitment to fostering a strong, efficient, and innovative workforce is evident through its emphasis on values and culture. The organization has achieved remarkable results in the Culture & Employee Engagement Index survey conducted through Glint, showcasing year-over-year improvement, with a worldwide score of 81%. In the global technology sector, the company ranked in the top 25% and the top 10% worldwide across all industries.
To support transformative changes, du has implemented strategies such as an innovative headquarters design and a streamlined organizational structure. These initiatives contribute to a progressive, people-centric culture that fosters high performance. Employee engagement is prioritized through comprehensive feedback mechanisms, revamped spot awards, and frequent recognition.
du's commitment to creating a people-centric culture is reflected in its headquarters design in Dubai Hills, which promotes collaboration and efficiency. By investing in employee engagement and fostering a positive work culture, du has positioned itself as a leader in the region. Its innovative strategies and initiatives demonstrate the organization's dedication to creating an exceptional work environment for both employees and customers.
How does du incorporate sustainability into its operations, and what measures does the company take to minimize its environmental impact?
As a digital leader, du is well-positioned to help the UAE achieve its sustainability vision through various technologies and services. In 2023—the year marked as the ‘Year of Sustainability’ for the UAE—we played a very strong role in enhancing our sustainability journey and supporting the UAE in its ambitions. We have actively contributed to setting net-zero targets and undertaking actions for sustainability awareness and social development.
Continuing our focus on sustainability, du is committed to building upon the ‘Year of Sustainability’ initiatives. Our commitment extends to our headquarters in Dubai Hills, where we have implemented sustainable practices and invested in a future-proof workspace. We are actively working towards minimizing our environmental impact, reducing our carbon footprint, and supporting the United Nations' Sustainable Development Goals (SDGs). As we strive to create a better future for all through our actions at du, more exciting initiatives supporting sustainability and CSR are on the horizon.
In order to increase the use of eco-friendly alternatives and renewable energy sources across our network, we have implemented various initiatives. One notable example is the deployment of hybrid generators, which has resulted in a 41% increase in the number of sites using this sustainable solution since 2021. By consuming significantly less diesel, these generators have contributed to a 50% reduction in greenhouse gas emissions compared to previous models.
We have also expanded our utilization of solar energy, with 78 sites now exclusively powered by solar panels—a 30% increase since 2021. Our goal is to further enhance our commitment to renewable energy by installing solar panels at an additional 100 sites. As we transition to 5G and face increased network traffic, our focus on energy efficiency remains unwavering. Through the implementation of 1,100 free cooling systems in mobile sites and the optimization of our data center infrastructure, we are driving even greater energy savings.
Our sustainability efforts extend beyond reducing our carbon footprint to engaging stakeholders and fostering a culture of environmental responsibility. Our Solar on Tower (SOT) solution, for example, exemplifies our innovative approach to sustainability. By installing solar panels on monopole towers, we maximize limited space at mobile sites while generating renewable energy. With 60 sites already equipped with the SOT solution and plans to expand to 270 sites by the end of 2024, we are making significant strides in energy conservation and carbon emissions reduction.
In collaboration with the Environment Agency Abu Dhabi (EAD), we have launched the naha environmental engagement platform to promote sustainability beyond our operations. This digital platform empowers individuals to embrace environmental stewardship, adopt green practices, and participate in environmental initiatives, contributing to a more sustainable future.
Our overarching goal is to achieve operational net-zero by 2030, and our sustainability initiatives are instrumental in realizing this ambition. Through our investment in renewable energy, reduction of our carbon footprint, and our engagement of stakeholders at every level, we are driving positive change and demonstrating our dedication to sustainability and environmental conservation.
What are du’s key targets for 2024? How can the company transform challenges into opportunities to deliver the optimal network experience?
In line with our commitment to customer experience, network expansion, and continuous innovation, du is dedicated to meeting the evolving market demands and needs of our valued customers. We understand that in today's digital era, providing seamless and reliable connectivity is essential. Therefore, we adhere to the UAE Digital Government Strategy 2025, which focuses on delivering a world-class digital infrastructure.
Our objective is to provide integrated, easy, and fast digital services that are specifically designed based on the needs of our customers. By investing in cutting-edge technologies, we aim to continuously innovate our products and services, ensuring they align with the changing dynamics of the market and enable our customers to stay connected and empowered.
Operational efficiency is a top priority for us as we strive to optimize our processes and resources. By embracing structural efficiencies, we remain agile and cost-effective, enabling us to adapt quickly to the challenges of a constantly evolving digital landscape. As we expand into new business ventures, we aim to diversify our offerings and explore new opportunities for growth.
