Time to cut broadband pricing

Etisalat used this week's Broadband Global Summit in Dubai to announce that it has now reached 500,000 residential broadband subscribers in the UAE, and proclaim that future growth for broadband for the company will mean it has to be service and application driven, and not just capacity driven

Tags: Emirates Telecommunications Corporation
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By  Mark Sutton Published  March 12, 2009

Etisalat used this week's Broadband Global Summit in Dubai to announce that it has now reached 500,000 residential broadband subscribers in the UAE, and proclaim that future growth for broadband for the company will mean it has to be service and application driven, and not just capacity driven.

That sounds like good news - Etisalat paying more attention to services and offering new solutions to customers, but in the same week that Saudi Telecom announced a 70% cut in internet rates, Etisalat still doesn't seem to get the point - its about pricing.

The speech also noted that the current rate of total internet penetration in the country, of 60%, is now "above many international benchmarks", and we all know what else is above international benchmarks, don't we?

As I've written before, the benefits of cheaper broadband for home users may not be immediately apparent - but without cheaper connectivity, the real benefits of Web 2.0 - collaboration, communication, participation in global forums and global opportunities, will be lost. (Its going to be very interesting to watch the uptake of the new Arabic version of Facebook)

Continuing on with some of the highest internet pricing in the world also does a disservice to the operator's talk of being a world leader. Etisalat might be able to claim to offer 16 Mbps to the home, and the latest in IPTV, smart homes etc, but if the majority of people can't afford it, then you aren't benefitting anybody.

The situation is even worse for businesses.  I recently attended a CIO dinner, where it didn't take very long at all for the CIOs of a number of major companies in the UAE to get on to one of the biggest headaches they face - the telecoms operators. An overall lack of capacity, exceptional difficulty in getting additional capacity, exceptionally high costs for the capacity they have got, are all delaying projects, making use of hosting and other services almost impossible and limiting company capabilities.

Of course, the telecoms set up in the UAE is not the fault of Etisalat or du, but it doesn't make their marketing messages any easier to swallow when you basically get what ever service the operator chooses to give you based on where you live or where your offices are.

In the face of genuine competition, STC has realized that it needs to do more to drive uptake, and that fundamentally, it's down to price. It's time that the UAE TRA recognized this fact, and set up the rules for proper competition between Etisalat and du, and other operators, and puts an end to this duopoly. Otherwise all  subscribers in the UAE will get is grand statements, big bills and crappy service.

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