Profits of Telecoms company du DU.DU could double after the federal government slashed its annual royalty fee, analysts said as the shares soared on Tuesday.
The operator, which reports results on March 3, said it would only pay 15 percent of net profits to the government in 2010.
This is far below the 50 percent analysts had expected and which is paid by its main rival, Etisalat (ETEL.AD), fuelling talk that Etisalat may see a similar reduction. Du, which broke Etisalat's monopoly in 2007, has been setting aside funds since 2008 to provision for the royalty fee. It was not required to pay the fee until it became profitable.
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