Emirates Telecommunications Corporation (Etisalat) is looking to restructure and outsource its operations in a bid to cut costs and halt falling profits.

In a statement, Etisalat says it is trying to cope with the rising costs of new technology, while dealing with falling revenues in the telecoms sector.

“As the incumbent operator in a two-player market in the UAE, it is expected that we should feel competitive pressure especially in the mobile segment,” says Ahmad Abdulkarim Julfar, group chief executive officer at Etisalat.

The operator’s revenues for the end of 2011 grew by just 1 per cent to AED32.2bn ($8.76bn) when compared to 2010. Net profit reached AED11.6bn before the 50 per cent federal royalty, This is a 24 per cent drop when compared with profits in 2010.

The drop in profit reflects the AED1bn impairment after federal royalties when Etisalat wrote off its Indian subsidiary following the decision by the Supreme Court of India to cancel 122 telecoms licences amid allegations of corruption.

Growth from data and internet revenues reached AED8bn, up 20 per cent compared with 2010. Etisalat has invested AED1.8bn in its fibre-optic infrastructure and high-speed mobile broadband long-term evolution technology.

Mobile subscribers grew 22 per cent to 167 million in 2011.