UAE-based Etisalat reported a 24 percent decline in annual net profit for 2011 – a shortfall partly blamed on the recent cancellation of its Indian mobile licence – and has hinted at a wide-ranging restructuring of its business to cope with challenges.

In a statement, Etisalat said that its board had discussed "the reduction and control of operating expenditures by initiating restructuring and outsourcing plans as a future strategy."

"These suggestions aim to enable Etisalat cope with the pace of development witnessed in the ICT sectors and face financial challenges that telecom providers across the world, including Etisalat are facing due to rising costs of new technology necessary for organisations to increase their competitive edge in local and international markets, accompanied by drop in revenues of the global telecom industry," the firm added.

Etisalat’s 2011 net profit fell 24 percent to AED5.8 billion (US$1.6 billion), dampened by a AED1 billion impairment following the recent decision by the Supreme Court of India to cancel 122 licenses, including that of Indian subsidiary, Etisalat DB. Full-year revenue rose 1 percent to AED32.2 billion. Subscriber numbers grew 22 percent to 167million.

Etisalat also reduced its capital expenditure during 2011 by 27 percent to AED4.3 billion following the investment in FTTH in 2010. Capex in international operations was also reduced by “political unrest in Egypt and the ongoing uncertainties in India” which resulted in consolidated Capex representing 13.3 percent of consolidated revenues in 2011 compared to 18.4 percent in 2010.

"As we develop our international networks and drive greater efficiencies across the group, our overseas operations continue to perform strongly. In particular there were solid performances from Atlantique Telecom in West Africa and Etisalat Misr in Egypt, which witnessed a 40 percent growth in subscriber numbers”, said CEO Ahmad Abdulkarim Julfar