AGM 2011

Etisalat General Assembly Approves Dividends at 60%

The General Assembly of Etisalat today approved the recommendation of the Board of Directors to distribute dividends at 35% of nominal share value for the second half of 2010. This makes the total dividend awarded by Etisalat in 2010 to be 60%.

Mohammad Omran commented: “On behalf of Etisalat board members, I would like to thank the leadership of the UAE and the UAE government for their significant ongoing efforts to continue to enhance the leading position of the UAE, and also for their ongoing strives to support the technology and ICT sector in the UAE, particularly through its advanced laws and regulations.”

“Further to our efforts to include our shareholders in the benefits, we have proposed a final dividend of AED 0.35 per share, bringing the total dividends for the year to AED 0.60, in line with our policy in previous years. This represents a dividend yield of 6% at the year-end stock price. We are pleased that total share returns for the 12-month period ended December 31, 2010, including capital gains and dividends, were a healthy 13%.”

“This year Etisalat has witnessed positive growth in new customer acquisition and revenues. In Egypt, for example, Etisalat Misr celebrated its 15 million customer milestone, and the subsidiary reached break-even point after only three years of operations. Among consolidated operations where we exercise management control, the customer base has increased by 30% while revenues increased 46%. It is notable that our international operations today make up 23% of the Group’s top-line results.”

Omran discussed Etisalat’s financial position, commenting: “In line with past years, Etisalat has maintained its very strong cash position, a strategy that is especially relevant given the recent state of financial turmoil worldwide. Our healthy balance sheet has served as a cushion against the recent financial shocks, and allowed us to comfortably finance our operations and capital investments. As a testament to our financial health, we maintained our investment-grade credit rating and positive outlook from the three major credit rating agencies.”

“The growth was offset though by the revenue and earnings decline in our flagship UAE operation – which is natural and expected as our home market has entered an advanced stage of saturation and maturity. As a result, mobile and fixed services witnessed a modest decline in operations. Etisalat UAE management has taken proactive measures to meet this new challenge,” he continued.

When discussing technology advancements, Omran commented: “We carried on our strategy of investing rationally in our network infrastructure to capture organic demand within AED 5.8 billion in capital expenditure. Notably, we continued to invest in our country-wide fibre-optic network as part of our commitment to keep the UAE at the global forefront of state-of-the-art telecommunication services.”

Omran then went into details about Etisalat’s acquisition strategy, saying: “The corporation maintained its prudent approach to evaluating acquisition opportunities that are in line with its strategy to expand internationally and add value to its operations portfolio, as well as several strategic stake increases to our existing assets.”

Nasser Bin Obood, Acting Chief Executive Officer, Etisalat, commented: “Etisalat continued its strong track record given the challenges during 2010, exhibiting strong performance in the period under review. We are confident that Etisalat is poised to dynamically adapt to the evolving industry landscape and our business environment.”

“In general, the global telecommunications industry witnessed a slowdown due to various conditions that impacted an already highly saturated UAE market, where penetration levels are the highest in the region. This consequently affected overall performance. In response to this effect Etisalat has been working on innovating new packages and services such as value-added and broadband services, which should lead to balancing revenues and profits.”

“That being said, Etisalat faced local competition under scrupulous regulations, including increasing pressure on international tariffs from competition and Voice over Internet Protocol (VoIP) usage. The market also witnessed competition in mobile data, with a focus on smart phones, which led to voice revenue disruption in favour of data revenues – a natural phenomenon in light of the technological advancement and introduction of a new generation of services and handset equipment. Etisalat has proactively introduced selected value propositions that responded to relevant current and future market needs, focusing its efforts on stabilizing our market share – as the major service provider,” Bin Obood continued.

In terms of technology, Bin Obood stated: “As a main player, Etisalat is investing prudently to achieve excellence in customer experience for the UAE. This commitment was highlighted by the further development and roll-out of the Fibre-To-The-Home (FTTH) network. Etisalat is on track to reach its goal of covering all of the UAE with its fibre network by 2012.”

“In addition to this, we have begun a commercial trial of Long Term Evolution (LTE), an important step towards 4G technology. Etisalat has successfully combined the protection of the environment and advanced technology by investing in optical fibre networks that enhance the energy efficiency of our networks and reduce our carbon footprint and operating cost,” Bin Obood concluded.

To highlight UAE operations for the year ended 2010, Mobile subscribers reached a total of 7.76 million, while fixed line subscribers stood at 1.24 million and Internet subscribers totaled 1.32 million. In addition the corporation recorded AED 24.3 billion in revenues and capital expenditure totaled AED 2.2 billion.

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