UPDATE 1-UAE Etisalat profit rises as revenue and subscribers grow

Sun Apr 27, 2014 8:13am EDT

* Q1 profit 2 bln dirhams vs 1.8 bln dirhams a yr ago

* Q1 revenue 9.9 bln dirhams vs 9.6 bln dirhams a yr ago (Adds details)

By Matt Smith

DUBAI, April 27 (Reuters) - Etisalat, the Gulf's No.2 telecom operator by market value, reported an 11 percent rise in first-quarter profit on Sunday as its revenue and subscriber base increased and capital expenditure and taxes declined.

The former monopoly, which operates in 15 countries across the Middle East, Africa and Asia, made a net profit of 2 billion dirhams ($544.5 million) in the three months to March 31, beating analysts' forecasts for 1.8 billion dirhams ID:nL6N0MY031]

Etisalat, which has agreed to buy Paris-listed Vivendi's 53 percent stake in Maroc Telecom, generated quarterly revenue of 9.9 billion dirhams, up from 9.6 billion dirhams a year earlier.

The UAE remains Etisalat's core market, providing 6.5 billion dirhams of quarterly revenue, up 8 percent from a year earlier to account for almost two-thirds of the group total.

"We will continue to expand our service offering and geographic footprint in order to diversify our revenue base," Ahmad Julfar, Etisalat Chief executive, said in the statement.

"Africa remains a strategic region for our business."

First-quarter capital spending fell 14 percent to 900 million dirhams.

The UAE government has introduced a new royalty - or tax - regime for Etisalat and its rival operator du.

This has eased the tax burden on Etisalat slightly, with the company paying an effective royalty rate of 48 percent on its first-quarter profit, down from 50 percent a year earlier.

Etisalat had 145 million subscribers as of March-end, up 3 percent from a year earlier. ($1 = 3.6730 UAE Dirhams) (Reporting by Matt Smith; Editing by David French and Sophie Walker)