A tough call

The UAE's second mobile operator celebrates the six-month anniversary of its launch in a few weeks' time.

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By  Andrew White Published  July 14, 2007

Mohammed Asif, 22, has a dilemma. The young accountant is starting his first professional job, and in the process of applying for a smart new set of business cards. Asif must plump for one of the two mobile numbers registered under his name.

"Obviously, I have had my Etisalat number for many years and it is probably the one that most people call me on," he deliberates. "The other one's a bit different though - it stands out from the crowd."

We clearly said in February that people should not expect from day one not to encounter some challenges with regards to coverage.

While the two numbers are almost identical, the ‘other one' is a service provided by the new kid on the UAE telephony block, which means a ‘055' prefix as opposed to Etisalat's established ‘050' prefix. Emirates Integrated Telecommunications Company PJSC - or ‘du', to give its more user-friendly moniker - launched in February this year, and is the first competitor to challenge Etisalat's 31-year monopoly over the UAE telecoms market.

A funky prefix is not the only attractive figure to be associated with du. Last month, the operator signed up its 500,000th subscriber, meaning that 10% of the UAE's population is now hooked up to the second telco. This landmark was achieved ahead of schedule, and came weeks after du reported revenues of US$50m for Q1 2007, as well as a better-than-forecasted net loss of US$59m.

"Du have hit some of their initial benchmarks, so I think they're doing very well," says Kenn Walters, telecoms analyst with international research, advisory and consulting company Experton Group.

"They've overcome some of the technical and roll-out challenges that tend to plague initial launches," he continues. "Typically, there are six-month and 12-month ‘break points' in terms of how people are doing, and I'd say that until now, they've done extremely well."

Walters argues that within the first six to 12 months, a typical network roll-out will face a barrage of complaints with regard to dropped calls and bad speech quality. He argues that du "doesn't seem to have been plagued with those sorts of issues" - although there are a few customers who might beg to differ.

"We have noticed increased numbers of people calling from du numbers over the last couple of months, although they still represent no more than seven to 10% of calls," Amber Suhail, host of the hit Dabbawala lunchtime show on Radio 4 FM, tells Arabian Business.

"I've not had a dropped call so far, although we have had some bad connection problems from du lines," she continues. "Nobody so far has expressed frustration, like they do sometimes with connection problems. Instead, there is a sense that people almost expect these problems, as they know they have signed up to a new network.

"I think du probably has another year or so before this attitude will change, and we have already noticed that things have improved in the last couple of months," Suhail adds.

Du CEO Osman Sultan is frank in his defence of du's teething troubles - which, according to Walters, have been mild when compared to the woes of some recent high-profile network roll-outs in Europe.

"We are constantly adding to our network coverage, and we clearly said in February this year that people should not expect from day one not to encounter some challenges with regards to coverage," Sultan tells Arabian Business.

"This is a new network, this is a network that people will take issue with, and they're right compared to a network that has been built over 30 years," he continues. "But in the months since we launched, there has been a drastic improvement and we feel really good about that."

He argues that du launched with ambitious, sophisticated service packages that were always going to require some tweaking once the network was up and running. Crucially, he emphasises that the company is aware of areas where network coverage is still relatively weak, and is actively working to improve the situation.

So how else do we judge the fledgling operator? In straight terms, du has snared half a million subscribers since its launch, placing it ahead of schedule. Nevertheless, even Sultan admits that the true value of this statistic is open to interpretation.

"There is a rule nowadays, which classifies ‘an active customer' as one who has made an outgoing call in the last three months," he explains. "Of course, at the end of June then all of our users were within the last three months, so it's not really that significant."

Walters is equally sceptical with regards to the true value of subscriber figures, and further argues that ‘a pre-paid subscriber' is by definition an "oxymoron", because "people buy pre-pay; they don't subscribe to pre-pay".

"It fits the old expression - that there are lies, damned lies and statistics," he says. "There have certainly been lots of questions asked of numerous operators around the world of how reliable the subscription figures are.

"Also, the operators are saying that they've reached that many people, but how much service usage there is from those people, they're not too sure on," Walters adds.

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