Time for real telecoms competition

UAE residents are tired of the block on VoIP calls and expensive fixed line internet services.

Tags: Etisalat International - UAEUnited Arab Emirates
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By  Roger Field Published  February 7, 2010

When the UAE’s Telecommunications Regulatory Authority (TRA) published new regulations aimed at boosting telecoms competition in January, the news failed to resonate with residents who have become accustomed to hearing much talk about competition but are used to seeing less action.

While it is true that the TRA has made some inroads in terms of driving competition, most notably with the launch of second operator Du back in early 2007, the regulator’s actions often seem to be far too tame to have any noticeable benefit to end users.

Under the new Competition Framework, the TRA said it would crack down on any anti-competitive practices from Etisalat or Du, adding that any complaints lodged by either company would be investigated.

Mohamed Nasser Al Ghanim, director general of the TRA said that the new regulations would help “foster growth and development of the telecommunication sector through the creation of sustainable, vibrant and fair competition.”

The TRA also said in January that it planned to allow Du and Etisalat to set prices without having to seek approval from the TRA by the end of the year, a move aimed at allowing both telcos to compete freely.

But the TRA failed to specify which services this would apply to, and said only that it planned to determine which parts of the telecoms sector would be appropriate for deregulation by the end of the year, while it conducted studies.

While these statements indicate a step in the right direction, they gave little optimism that the TRA will seek to overcome two of the main barriers to true competition in the country’s telecoms sector – the ongoing ban on VoIP services and the absence of competition in the fixed line sector.

Residents of the Burj Khalifa, the world’s tallest tower, may be able to choose between Etisalat and Du for their fixed telephone and internet lines, but the rest of the UAE’s population has no such choice, and the high cost of broadband in the UAE compared with more competitive markets is the result.

Interestingly, the TRA also made a statement about VoIP in January, telling UAE daily the Khaleej Times that a new policy to allow voice calls over the internet was being implemented.

But the news sounded remarkably familiar. Back in 2008, the TRA’s Al Ghanim revealed that the authority was developing a framework for VoIP providers but added that there were challenges associated with it.

Back in 2006, Al Ghanim stated that if and when VoiP was legalised, only Etisalat and Du would be able to offer such services.

As with many steps towards telecoms liberalisation in the UAE, the recent announcements from the TRA are likely to be peppered with clauses that ultimately put the interests of the operators before their customers.

The slow march toward true liberalisation might seem tough for the UAE’s two operators, particularly Etisalat, which has been accustomed to far less exposure to competition than operators in more developed markets. But as operators in the most liberalised markets usually make clear, competition is the best driver of innovation, and ultimately benefits the operators as well as consumers.

 

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