Much A-du About Nothing

It now transpires du will be unable to meet the February 12 deadline set by the TRA for the launch of its mobile operations after a press conference in Abu Dhabi witnessed Osman Sultan admitting his company’s commercial launch could be as late as March 2007. If that is the case it is highly likely du will face disciplinary action from the regulator.

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By  Christopher Reynolds Published  January 6, 2007

|~||~||~|The UAE is still waiting for the arrival of its second mobile operator du. The budding cellco’s end-of-2006 timeframe was abandoned, according to CEO Osman Sultan, after serious technical problems over network interconnection with incumbent Etisalat. Although these interconnection issues appear to have been resolved, it now transpires du will be unable to meet the February 12 deadline set by the TRA for the launch of its mobile operations after a press conference in Abu Dhabi witnessed Osman Sultan admitting his company’s commercial launch could be as late as March 2007. If that is the case it is highly likely du will face disciplinary action from the regulator. Furthermore, du is still refusing to be drawn on the price schemes it intends to introduce on commercial launch, despite clearly stating it will be competing with Etisalat via market segmentation, focusing on customer-tailored price schemes, rather than driving down tariffs. This means that the 300,000 individuals who have already booked their Etisalat number with du in preparation for its commercial launch have done so solely on the back of the operator’s pervasive branding campaign and the simple fact that it is the first operator to break Etisalat’s 30 year market monopoly - whether or not these factors are sufficient enough for du to maintain the momentum it has generated with its booking campaign for much longer is another matter entirely. It is understandable for du to want to maintain some competitive confidentiality on pricing (Etisalat has already pledged to charge its customer per second, following du’s announcement on per-second billing), but if its launch date continues to be pushed back, without any concrete information on what it is offering to subscribers, customer interest is sure to wane. Unfortunately, it is likely that the hard work is only set to begin when du does launch commercial services, not recede. It appears only fair to ask what du will actually represent to the domestic telecoms sector when it finally launches, and what it will mean for the thousands of retail investors who went out and bought du shares before a single dirham of service revenue was generated by the operator (not including revenues inherited from TECOM’s ongoing communications services offered in Dubai free zones, and which are now owned by du). Apart from racking up a bill of US$36 million in pre-operating costs for the six months to end-June 2006, much of it on salaries, du’s existence at this point in time has been fairly low-key, and one can only hope that closer to its actual launch date (whenever that may be), it will bounce back, capture people’s imagination, and make potential subscribers near and far aware of a viable business proposition. ||**||

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