Du Company: Review


Du telecommunication UAE is an organization that operates in the UAE by providing telecommunication products and services to the entire UAE population. The organization established its Du brand in 2006. This brand unveiling forms one of the company weaknesses because the brand lack experience in of the telecommunication industry in UAE. However, the weakness is overcome by provision of high quality products and services that fit directly into consumer needs. The organization has the opportunity of exploiting the available opportunities in the high performing telecommunication industry in UAE. The financial reports of Du telecommunications indicate gradual growth in the revenue, income and assets. The total revenue of the company has grown since 2006 up to 2010. The increase in the revenue has led to increased net income and earnings per share. This study examines financial reports of Du telecommunication UAE and its ability to grow in the UAE business environment.

Du Company Profile

Du is an organization that operates the UAE as a service provider. The company positively contributes towards the transformation of the UAE through provision of quality products, innovation and price leadership. The company has over 4.5 million subscribers who actively rely on the services of the company. Given the large database of subscribers, it is evident that the company is well established as an operator of choice for UAE residents (Du, 2010).

The company offers a range of services such as fixed and mobile telephony, connectivity of the broadband and the provision of IPTV services to the market. The services provided target individual people, homes, organizations and carrier services for firms. While the company offers value for its services, it depicts state of the art technology that has enabled the enhancement of company services to the clients. The organization has grown rapidly leading to increased employment opportunities for UAE residents. The organization has a staff of about 2000 employees providing quality services to the company. The diverse human capital in the organization comes from various countries throughout the world. Thus, the rich cultural diversity of the employees is reflected in the variety of services bundles that satisfy the diverse UAE culture. Given that the firm operates in the UAE, it is necessary that over 50% of its top management be from UAE hence provision of cosmopolitan working environment. The vision of the company is “To enhance your life – anytime, anywhere” (Du, 2010).

Company Mission

Du Corporation has the mission of delighting its clients, becoming an employer of choice for the excellent talents existing in UAE. Thus, it creates optimal value for its investors by excelling in innovations while contributing to the UAE community. The firm achieve sits mission through utilization of existing talent and skills to connect, inspire and rewards its well-connected customers.

Brand positioning: Du Corporation has positioned its brand well in the UAE market. The organization acts as the most diverse and active firm that relentlessly provides communication services to the diverse UAE market at the most affordable prices while enabling the customers to get involved in their important issues in life. The company brand values include confidence, friendly, honesty and surprising. Following these values, the brand promises “add life to life” to its clients.

Du SWOT Analysis

A SWOT analysis establishes the strengths, weaknesses, opportunities and the threats affecting the company.


Strong Brand: Du Telecommunication launched it new brand of Du in 2006. The establishment of the brand was conducted in a manner that the brand hit the market with a positive impact that resulted in positive effect on the financial performance of the organization.


The organization has the weaknesses of a newly established brand that is has no much experience in the market. The company’s Du brand was introduced in 2006. It has not gained much experience compared to its competitors. Due to this weakness, the firm is likely to incur many expenses in its familiarization to the market. The expenses could reduce the profit earned.


The telecommunication industry in UAE has many potential investment opportunities that Du telecommunications UAE could embrace. For instance, the company has the opportunity of venturing into the provision of the smartphone sector and provides smartphones to the market. The smarthones can be provided together with the other services of the firm. Alternatively, the company can venture into internet solutions in the region.


Competition: the telecommunications industry in UAE is characterized by free entry and exit. This has led to increased number of entrants in the industry. The entrants are attracted by the profitable opportunities in the industry. Due to large number of new entrants, competition is increasing in the industry forcing Du telecommunication to establish a competitive advantage for survival (Du, 2010).

Company Products

Du Corporation provides a range of products and services to its customers. The products and services provided by the company are divided into two broad categories that are products and services for small businesses and for large organizations and the governments. Under company products, teher are business mobile, business voice and business broadband. The company services comprise of business managed services and business power bill.

Business mobile: Du provides business mobile phone products that suit into specific customer needs. Under this product, the company provides products that fit into different segmented customer needs. For instance, the organization provides mobile phone services for women entrepreneurs and professionals operating in UAE. Under this product, specific bundles for national and international calls are established. For instance, bundles exist for businesses, international roaming calls, shopping rewards and pay per second billing. The premier product plan targets personal mobile services and businesses while providing freedom to the use of the services. In addition, the service provides value, flexibility and control.

Du business Voice: this provides clients of the company with inbound and outbound services that fulfill the communication needs of clients adequately. The rates are discounted for international calls while local calls are billed per second. In addition, service differentiation exists to meet the specific market segments within the UAE.

Business Broadband: Du corporation broadband services acts as a communication tool for organizations with their clients. They provide reliable information for firms regarding the trends in the environment while providing an enabling environment for manufacturing activities. Similar to other products and services, the broadband services are segmented to fit into the different market segments existing in UAE such as low income and high-income individuals and organizations.

Business managed services: the services provided by Cu Corporation aim at enhancing the business value of the company’s clients who have invested in IT. This objective is achieved through operational efficiency and high service levels. According to Du (2010), the services provided by the fir allows the customers to maintain either much or little control over IT operations and infrastructure as deemed by the client. The services are differentiated into various services for specific markets. For instance, the global managed services helps in the integration of customer IP needs that constantly increase over time. National ip vpn service targets business and provides them with high performance, security and reliable platform to connect into all company websites within UAE. The managed LAN service offers business with high speed Ethernet.

Power Bill: this is a tool introduced by Du to all its customers to be able to view and manage telecommunication bill online. The service creates a comprehensive multi-user environment. Through this environment, user authorized by the firm such as financial managers, accountants, It managers and other human resources administrators are able to view and analyze the use of telecommunication.

Business Environment

The business environment in UAE is encouraging. This environment would be analyzed using PESTLE analysis tool.

Political environment: the political environment of UAE is favorable for business. UAE is divided into emirates that have their own governmental institutions. The ruling family in the emirates constitutes the supreme council that is responsible for policy formulation and the election of the president and the vice president who hold office for five years. Therefore, stability of the political environment encourages business growth.

Economic environment: the economic environment of UAE is based on oil and gas in Abu Dhabi. The oil and gas are the bases for wealth creation. Increased spending on the side of the government is meant to create jobs and develop infrastructure in order to increase business opportunities in the country. A surge in the real estate and share prices resulting in increased inflation.

Socio-cultural environment: UAE is mainly Islam by religion. Therefore, Islam plays an important role in business. The culture of the residents is based on the Islam religion. Rights protect women and privileges lay down by the religion hence being seen as equals to men.

Technological environment: the country is technologically well served with various means of communication such as telephone (landlines), radio broadcast, TV and lately, the internet.

Environmental conservation measures: the country is located in arid, tropical and sandy desert that border the sea.

Legal environment: due to many legal issues, court proceedings consume much time for businesses. This could be due to inadequacy of juries with only a single judge or a three-judge panel hearing the case. Another setback for business operating in the country is that all evidence for any case must be submitted in Arabic.

Industry Analysis

The UAE telecommunication is characterized by free entry and exit of firms. Due to this, competition in the industry is on the increase hence forcing organizations operating in the industry to establish competitive advantages. The UAE consumers are free to choose the products and services provided by the companies including high-speed broadband. The Telecommunications Regulatory Authority (TRA) regulates the industry. Etisalat is a major stakeholder in the fixed line telephone in the industry hence it has established a monopoly in other industry sectors such as internet cable and TV services. According to Microwave Communication (2010), Etisalat and Du telecommunications merged their internet and TV networks meaning that they now share the services. The telecommunication industry in UAE has seen dramatic transformation with the coming of high-speed internet because the internet is readily accessible by consumers yet affordable for small-scale consumers. However, large organizations and commercial users still face high costs of internet. Competition is likely to increase in the mobile, satellite, broadband and fixed lien markets.

Growth in the telecommunication has been gradual over time. Industry penetration increased by 166% in 2007 with more opportunities being unveiled for investors. The fixed line sector is still underdeveloped. Increased education and search for knowledge and low production costs are the drivers behind the establishment of the high-speed internet. Due to this, the industry is booming (Microwave Communication, 2010).

Why Choose Du Telecommunications

Du Telecommunication Corporation was chosen for this study because the company operates in a fast growing market full of opportunity for further growth. The company was selected because its brand is not as old as its competitors are and the researcher would like to know its capabilities in utilizing its strengths to exploit the existing opportunities in the industry in UAE. In addition, the ability of the firm to overcome its weaknesses would necessitate the overcoming of the threats in the UAE business environment.

Major Competitors

According to GAN (2010), the UAE telecommunication industry is booming and therefore attracts entry of new firms since it is possible to enter the market freely and leave freely too. Due to this feature of the industry, competition in the industry is increasing wit time. The major competitors of Du telecommunications include:

  • Etisalat UAE: this is one of the dominant firms providing telecommunication services in UAE. Some of the provided services include telephone services, TV and internet (GAN, 2010).
  • Tawasol Telecom: the firm has specialized in the provision of turkey acquisitions, surveys, design, execution and maintenance of projects in telecommunications industry. Thus, it is a telecommunications service provide and a solution to networking issues.
  • Ol-Otaiba Communications: this organization is known for its pricing strategy that offers the lowest priced GSM mobile phones to its clients. The firm serves as a retailer to its products as well as a wholesaler.
  • Efonica: the organization provides services such as phone-to-phone call solutions, internet phones and calling cards. Their target markets are mainly homes and offices in large corporations.
  • iZone Telecom UAE: this is a solution provide for wireless telecommunications and mobile phones.

Financial Analysis

Total Revenue

Every organization usually aims at maximizing the revenue while minimizing the costs incurred. The total revenue realized by an organization usually results from sales activities. In this case, the sales revenue of Du telecommunications results from the sale o fits services to the entire UAE market. The total revenue that was realized by Du telecommunication in the financial year that ended in June 2010 was AED 3,283,407 (Du, 2010). The total revenue indicates high income from the sale of the company services. The comparison of the sales revenue for the company in previous seasons was AED 2,475,932 in the first half of 2009. This indicates an increase in the total revenue of the firm. The higher the total revenue experienced by an organization, the higher the chances of making higher profits.

Gross Profit

Gross profit is the profit that an organization receives net of the cost incurred in the production of goods sold but before deduction of other expenses and tax. The gross profit is found through the deduction of the cost of sales from the total revenue. The grow profit realized by DU telecommunication UAE for the financial period ended in June 2010 was AED 2,168,855. This amount is higher than the gross profit realized in a similar period in 2009, which was AED 1,638,536. The gross profit of the firm indicates the efficiency of the organization in managing its labor and other resource inputs in offering services to the UAE market (Du, 2009).

Operating Profit

This type of profit is realized from normal operations of the organization. The profit does not include the income earned from investment activities of the organization. It is also calculated before the inclusion of tax and interest effects. The earnings before tax and interest rates for the 2009 financial year were AED 1.1 billion. This figure was high when compared to the 2008 period that was AED 368 millions. Thus, the company turned profitable since launch of its brand in 2009 with the profitability being extended to the 2010 financial year.

Other incomes/expenses

An organization realizes other expenses besides the normal costs of production. For instance, the firm incurs normal administrative and general expenses in the course of doing business. The general and administrative expenses of Du telecommunication for the financial period that ended in June 2010 were AED 1,677,342. These had reduced from expenses of a similar period of AED 1,504,406. Du telecommunication incurred the financial expenses of AED 25,058 in the financial period that ended in June 2010. The expenses were very high when compared to the financial expenses of a similar period in June 2009 that was AED 6,817. Financial expenses are incurred whenever an organization in search of funds to finance its investment activities such as interest rates and taxes. The expenses affect the net income (Du, 2009).


Every organization operating in various business environments is required to pay tax in accordance with the tax regulation in the region / country. Tax forms revenue for the government. The taxation regulation sin UAE provides that an organization pay tax in form of royalty on its earnings per annum. The royalty incurred by DU telecommunication for the financial period that ended in June 2010 was AED 234,471. The royalty was almost three times the royalty incurred by the firm in the financial period that ended in June 2009.

Extraordinary Items

Firms operate in diverse environments that are characterized by different business environmental actors. The environmental factors of an organization can result in the firm incurring unnecessary costs on its income statements. The unnecessary cost items may not recur in a similar period in future. These are referred to as extraordinary items. Such items affect the net income of the firm negatively. A good example of an extraordinary item on the income statement is a loss to the firm that results from a forceful takeover of an organization. Given the case in hand, extraordinary items are provided under the heading other Income (expenses). It is clear that the items reduced the net income of the firm by AED 22 in the financial period that ended in June 2010. This figure was negative when compared to the positive figure of AED 31,280 that was realized in a similar financial period in 2009.

Net Income

The firm realizes this income after deductions of all expenses. It is the income available for the investors in the organization. The net income of Du telecommunications for the financial period that ended in June 2010 was AED 234,471. This was triple compared to the 2009 net income that was AED 81,015. Net earnings indicate the firm’s profitability. The net income is very important for the investors of the organization since it determines the earnings per share (Du, 2009).

Earnings per Share

Investors receive this income on their invested capital in an organization. The income is earned on the shared of an individual investor. An investor with large number of share usually earns a higher amount of income. High earnings per share indicate a high amount of profitability for the firm since the figure depends on the net income. The earnings per share of Du telecommunications UAE for the financial period that ended in June 2009 was AED 0.06. This figure was higher than a figure of AED 0.02 for a similar period in 2009. The sharing of the earnings per share differs from one organization to another depending on the capital structure of the organization.

Comparison of Financial reports

The comparison of the financial reports reveals an increase in almost every item on the income statement. In 2007, the financial report reveals an increase in revenue from AED 434025 in 2006 to AED 1,537,368 in 2007. The revenue increased to AED 3.95 billion in 2008. The market share stood at 19%. The cost of sales increased from AED 208,357 in 2006 to AED 678,904 in 2007. The gross profit rose from 225,668 in 2006 to 858,464 in 2007 (Du, 2007). The net income and the EPS too increased form negative values to positive values. For instance, for the two periods (2006 and 2007), the firm realized loses of AED 608,923 and AED 885,267 respectively. However, these values changed to positive values as discussed above (Du, 2008).


This study has examined the financial reports of Du telecommunication UAE. The income statement in the report is made up of several items such as the total revenue, gross profit, net profit and the earnings per share. The total revenue of the company has increased gradually over years leading to increased grow profit and net profit. The operating expenses of Du Telecommunication also increased resulting to a negative effect on the net profit of the firm. The net profit also suffered a reduction when the royalty charged in form of tax to the company increased gradually. The earnings per share were negligible between 2006 and 2008. However, the EPS rose to AED 0.2 in 2009 and AED 0.6 in 2010 indicating an increase in the net profit of the firm. The overall business environment in which the organization operates is favorable for the operation of the organization. The study recommends that the firm diversify its investments in order to tap on the many opportunities in the industry. However, the investments should be made strategically without losing the market. The market share can be maintained through the employment of a cost leadership strategy.


Du, (2007). Annual Report. Web.

Du, (2008). Annual Report. Web.

Du, (2009). Annual Report. Web.

Du, (2010). Annual Report. Web.

Du, (2010). Company Profile. Web.

GAN, (2010). Abu Dhabi Telecommunications industry opens Further in UAE. Web.

Microwave Communication, (2010). Tremendous Growth in the UAE’s Telecommunication Market. Web.

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BusinessEssay. "Du Company: Review." January 10, 2023. https://business-essay.com/du-company-review/.