UAE gives first details of liberalisation process

State interest in the second operator will exist, with the state pension and social security fund and other private investors expected to hold a 40% stake in the new company.

  • E-Mail
By  Tawanda Chihota Published  May 8, 2005

The UAE’s Telecommunications Regulatory Authority has begun the anticipated move towards the liberalisation of the telecoms sector by awarding an all-service telecoms licence to a second provider, known as WAM. State interest in the second operator will exist, with the state pension and social security fund and other private investors expected to hold a 40% stake in the new company. The remaining shares are expected to be sold through an initial public offering. Further details regarding the offer of the outstanding 60% in the new operator and the timing of its commercialisation are expected in the coming months. The state already owns 60% of incumbent telco Etisalat, and the TRA’s decision to liberalise the sector in this fashion dashes expectations that a company devoid of state involvement would be established. It had been speculated, for instance, that Saudi Telecom was in a good position to be awarded the second mobile licence in the UAE in reciprocation for the licence an Etisalat-led consortium won in Saudi last year, to operate the kingdom’s second mobile network. Etisalat has been preparing for the entry of competition for over a year now and is commended for acting much like a competitive telco ahead of the introduction of competition. The UAE was ranked as a leader in the Arab world in international connectivity measures, for example, according to a recent report by Arab Advisors Group, and offers amongst the lowest internet connection rates in the region. “The UAE (telecoms) market by nature is very competitive despite having only one operator. It relates to customers and suppliers in a competitive manner and Etisalat is supportive of the liberalisation process,” said Ahmed Bin Byat, director general of Dubai Technology & Media Free Zone earlier this year. Earlier this year Etisalat established an international business unit to warehouse it foreign investments and has been aggressively expanding into the African mobile communications market. This move is seen as a play by the telco to diversify beyond the local telecoms sector.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code