Du, which ended Etisalat's domestic monopoly in 2007, said its third-quarter EBITDA (earnings before interest, taxes, depreciation and amortization) margin was 34 percent, up from 32 percent in the second quarter and 30 percent a year ago. 

"The name of the game is better efficiency in our operations," Chief Executive Osman Sultan told reporters on Monday. "We are moving toward better EBITDA margins, not only for the coming quarter, but hopefully for the next year." 

Du made a third-quarter net profit of 244 million dirhams ($66.5 million), compared with a forecast for 214 million.

"The main growth came from mobile revenues," said Sultan. 

Du has provisioned to pay half of its 2011 profit in royalties, or tax, to the federal government. This is the same percentage levied on Etisalat, but in 2010 du paid only 15 percent in a surprise decision by the government. Du is still waiting for confirmation of the 2011 royalty, Sultan said.  

Third-quarter revenue was 2.23 billion dirhams, up from 1.74 billion a year earlier.  

Revenue growth was likely to be "between 26 and 28 percent" in 2011 as a whole, Sultan said, with du's share of total UAE telecoms revenue "close to 28 percent".  

Mobile revenue was up by nearly third to account for more than 75 percent of quarterly revenue. Subscribers rose 162,000 quarter-on-quarter to 4.94 million at the end of September, giving du a 45 percent market share.   

Contract customers, who typically spend more than their prepaid counterparts, continued to grow in numbers, du said, and now account for 7 percent of mobile subscribers, although the company's average revenue per user (ARPU) remained static at 118 dirhams. 

"If we move up for the coming year with a couple of (percentage) points, I would consider this to be a decent result," said Sultan. 

Data income rose 46 percent year-on-year to 167 million dirhams, providing just under 10 percent of mobile revenue. 

Du said it had 639,700 fixed line customers in the third quarter, up 24 percent from a year earlier. It added 16,100 lines in the three months to Sept. 30, implying slowing growth.  

Sultan said this would rise when a long-awaited network infrastructure deal between the two UAE operators is finalized — du and Etisalat already offer landline phone, broadband and TV, but not in the same districts.

Yet this would likely be introduced in phases, rather than a nationwide roll-out, Sultan said, implying it would miss a year-end deadline previously mentioned by the UAE regulator. 

Du has no plans to borrow before the end of 2011, Sultan added, declining to comment on the firm's financing plans for next year. In June, du repaid an $817 million loan facility.