UPDATE 2-Dubai's du Q4 net profit surges on subscribers

(Repeats story published late on Wednesday)

* Q4 profit before 50 pct royalty at 209 million dirhams

* Set aside $600 mln for investments in 2010

* Profit beats poll average of 110.5 mln after royalty

* Adds 1.01 mln customers in 2009

(Adds details, quotes, background)

By Tamara Walid and Jason Benham

DUBAI, Feb 24 (Reuters) - Dubai-based telecom du DU.DU said on Wednesday net profit in the fourth quarter rose 155 percent on a surge in mobile users in the quarter and has set aside $600 million to boost its network in 2010.

Du, owned partly by the ruler of Dubai's investment company Dubai Holding and Abu Dhabi investment vehicle Mubadala Development Co, said net profit before provisions for a 50 percent royalty fee to the government rose to 209 million dirhams ($56.90 million) from 82 million dirhams in the year earlier period.

The net profit result beat forecasts from analysts polled by Reuters in January, which was an average of 110.5 million dirhams for the quarter after royalty. [ID:nLDE60902C]

The company saw the biggest growth in subscribers during the fourth quarter, it said, adding more than a third of its new customers for the year.

"Over the year, we have added a further 1.01 million customers with our total active subscriber base at 3.47 million," Chief Executive Osman Sultan said in a company statement.

Thousands of expatriates have lost their jobs in the Gulf trade and tourism hub of Dubai since the global financial crisis took hold, hitting earnings across sectors, but the results appear to signal a slowdown in the migration.

Du's results took into consideration provisions for a royalty fee to the government, for which a decision by the UAE regulator had been expected in late 2009.

Including royalty fee, du's net profit for the year rose to 528 million dirhams from 8 million dirhams in 2008.

Sultan said the 50 percent provision would continue in 2010 as no decision had yet been made by the government.

"All in all the results were very good. They have attracted more customers than we expected throughout the year," said Sleiman Aboulhosn, senior investment analyst at Prime Group in Dubai, who forecast 95 million dirhams in the quarter.

Aboulhosn put the firm's target share price at 3.37 dirhams a share. Its shares, suspended on Wednesday, closed at 2.9 dirhams on Tuesday.

FINANCING, 2010 GROWTH

The operator, which broke Emirates Telecommunications Corp's ETEL.AD monopoly in 2007, invested about 2.4 billion dirhams in building its mobile, broadband and fixed network last year and has an investment programme exceeding 2.2 billion dirhams ($599 million) for 2010, Sultam said.

"This is more than we expected," Aboulhosn said. "It might hurt their cash flow a little bit but that could be offset by further growth."

Du has drawn upon a 3 billion dirham long-term loan, which is scheduled to be repaid by June next year.

Speaking to reporters Sultan said the company was in talks for "lender financing" to raise the 2.2 billion dirhams. He declined to give futher details.

Sultan said the firm would benefit from mobile portability in 2010 as it looks to increase its market share beyond 30 percent and the formalisation of an infrastructure sharing agreement enabling it to expand more aggressively to other emirates beyond its primary market in Dubai.

"We have not slowed our investment because we were in a crisis," Sultan said. "On the contrary, this was the time to grow."

($1=3.673 dirhams) (Writing by John Irish; editing by Karen Foster)