The Emirates Telecommunications Corporation (Etisalat) has recorded net profits of AD1.59bn ($433m) in the second quarter of 2011, down 15 per cent from AD1.87bn during the same period last year.

Revenues also suffered a decline, down to AD7.93bn from AD8.05bn in the second quarter of 2010, even though the company’s total subscriber base grew 20 per cent to 140 million by the end of June 2011.

For the first six months of 2011, the company made a net profit of AD3.4bn and revenues of AD15.97bn. It has set an interim dividend of AD0.25 a share for the year.

The lacklustre performance is a result of higher expenditure on network upgrades and stiff competition from the UAE’s second operator Du. Etisalat’s revenues account for 70 per cent of the group’s total revenues.

“Etisalat incurred capital expenditure of AD1.92bn during the half year, despite a 12 per cent decline in profit … Our performance over the half year is in line with our expectations,” says Mohammad Omran, chairman of Etisalat.

The company faces charges over its operations in India, after its joint venture partner Majestic brought proceedings against it for mismanagement.

Etisalat has operations in 18 countries. The company has a capital base of AD10.8bn.