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Etisalat mulls outsourcing to trim costs

Dubai, February 23, 2012

UAE telecoms operator Etisalat will outsource network maintenance and support services, the former monopoly said on Thursday, as part of a restructuring plan to cut costs in the wake of profit declines.

Etisalat - which said on Wednesday it will shut down operations at its Indian joint venture amid a telecoms scandal - will shift some staff to companies providing outsourced services, but will not let go of any UAE citizens.

The outsourcing plan will be completed in two years, it said.

'During this time, Etisalat will sign agreements with several international and local specialised partners to conduct regular maintenance on its telecommunications networks,' the Abu Dhabi-based telco said in an emailed statement.

'Etisalat has prepared a plan to shift some of its staff members to work in new centres within the corporation or transfer them into private companies who have been selected to provide specialised services for Etisalat.'

Etisalat, which operates in 17 countries, said it would focus on its core business to improve its financial performance by reducing operating costs.

Etisalat's annual net profit fell 24 per cent to Dh5.8 billion ($1.6 billion) in 2011, due in part to impairments it took relating to Indian affiliate Etisalat DB, which is poised to lose its licence.

Etisalat has reported declining profits in seven of the past eight quarters as earnings from its foreign units fail to make up for sagging home revenue.

The domestic decline is due to price competition from competitor du and a move among the UAE's mainly expatriate population to uses voice over Internet protocol (VoIP) services for international calls.

About three-quarters of Etisalat's revenue is derived domestically, according to its third-quarter results, the most recent revenue breakdown the company has disclosed.-Reuters




Tags: Etisalat | Outsourcing | costs | UAE telecom |

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