The ringmaster

Will mobile TV in the Gulf threaten cultural and religious norms as it moves towards prime time?

  • E-Mail
By  Amy Glass Published  September 13, 2008

As for recent consumer unhappiness regarding the inability to access Voice over Internet Protocol (VoIP) services, such as Skype, Al Ghanim says Voip had been unlicensed in the UAE since the TRA began its operations.

"Customers and even those (VoIP) companies think that we are blocking them, but we are not blocking them - we are putting a process together for those companies to be licenced and this will take some time. There are challenges associated with it."

"When we licence a company in the UAE, we make sure they have a presence, so if you pay your bill and the company does not provide you with a service, there is a way to recover your money. Customers need to be protected."

The telecoms sector is vital to the country's economy; we need to attract the best talents. It is a vital sector for the UAE that comes second only to oil and gas.

There are many issues to be considered. For example, some of those companies provide very bad voice quality.

"If you are providing telecom services you have to be licensed as per the UAE Telecom Law," he said. Al Ghanim said the TRA was developing a framework for VoIP providers. "Once we finish our work, then these providers can come to the UAE.

"We are working on it and we will announce it in due time."

Meanwhile, Etisalat and du are already licenced to provide some aspects of VoIP services to their customers, he added.

Al Ghanim is also working to see the introduction of ‘converged services' where customers receive further choice for their residential services needs.

"We are preparing our infrastructure to host more providers in the future. You should be able to choose who provides your fixed line, internet, television.

"We have a real estate boom, and many projects have not been delivered, so we need to make sure infrastructure can cope with the future needs of these projects."

With his engineering background, Al Ghanim is a huge proponent of education as key to the UAE's economic future.

Al Ghanim graduated from Etisalat College of Engineering in 1994 (now Khalifa University of Science, Technology and Research) as a telecoms engineer.

The honours student who graduated at the top of his class was part of the first batch of graduates from the college, elected to join the only telecom operator in the UAE at the time; Etisalat.

"There is no research (and development) in the country. If we are to transform the UAE into a knowledge-based economy, we need research, and a focus on the ICT sector.

"For us to expand beyond du and Etisalat, we need human capital. The telecoms sector is vital to the country's economy; we need to attract the best talents.

"It is a vital sector for the UAE that comes second only to oil and gas."

The UAE telecoms sector

The duopoly that is the UAE's telecommunications market is characterised by high GDP per capita, an extremely high reported rate of mobile penetration (166.4 percent in 2007), and rapidly growing internet user penetration (44.7 percent in 2007).

But the UAE's two players Etisalat and du remain far apart. Former monopoly Etisalat commands about 80 percent of the UAE mobile market and is aggressively expanding international operations into 15 overseas countries, while du is at an early stage of growth as it builds its UAE network and operations. Du commenced operations in December 2005, launched mobile services in February 2007 and is currently targeting a 30 percent market share by 2010.

Once du completes its mobile network rollout, genuine increased competition within the UAE between the two players is expected, although it will be based less on direct price competition and more on special offers and promotions. While Etisalat should see its domestic market share decrease, the company's growth and profitability is likely to be driven by its rapidly expanding overseas operations.

Although there is no official confirmation, there is potential for a third license being issued in the future, after du has profitably established itself. This is likely to be seen either in the form of a third universal licence or as separate individual licences for fixed, broadband and ISP. However it is unlikely the UAE will see a new licence being issued before 2010, by which time du is expected to be well-established and profitable.

As the UAE government has substantial shareholdings in both the operators, the regulatory regime is expected to remain relatively benign towards both operators. The focus will be on developing regulation, allow competition to develop over time, and protecting du from the market strength of Etisalat.

The UAE population is forecast to grow at a 5-year CAGR of 4.8 percent to 6.3 million in 2012, up from 4.6 million in 2007. This is in line with a historical CAGR of 4.87 percent between 2001 and 2007. Assuming no new market entrants, the overall UAE telecoms market is expected to grow at a CAGR of 8.5 percent, from $5.9bn in 2007, $7.4bn in 2008 and to $8.1bn in 2009.

SOURCE: Al Mal Capital

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