BlackBerry ban seen hitting UAE operators’ profits

Etisalat, du could suffer due to loss of lucrative mobile data services - analyst

Tags: BlackBerryBlackBerry MessengerEmirates Integrated Telecommunications Company Etisalat International - UAEInformaUnited Arab Emirates
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BlackBerry ban seen hitting UAE operators’ profits Operator's profits will likely be hit by the TRA's ban of BlackBerry services.
By  Ed Attwood Published  August 3, 2010

The UAE's decision to ban BlackBerry services could have repercussions on the financial results of both national operators, a local telecoms analyst has said.

Incumbent Etisalat and new operator du have both said they will implement the suspension imposed by the Telecommunications Regulatory Authority (TRA), although both firms were also keen to point out that they would be advising existing BlackBerry consumers of "alternative mobility products and services".

But the losses to both companies could be substantial.

When questioned whether the BlackBerry suspension could result in financial losses, Informa Media & Telecoms senior analyst Matthew Reed told Arabian Business: "It could well do, especially as mobile data is one of the most important growth areas for most firms."

"BlackBerry plans represent a substantial part of that; while the operators don't give exact numbers, Etisalat confirmed to me last week that fifteen percent of its mobile subscribers were on mobile data plans, which include BlackBerry.

"It's so widely used, that of that fifteen percent, BlackBerry comprises the largest single part - as much as ten percent of the total mobile subscriber base in the UAE," Reed added.

In addition, the analyst said that the revenue operators take in from mobile data plan users are as much as five times more than from regular mobile users.

In a statement to news agency Bloomberg on Tuesday, Ahmed bin Ali, senior vice president for corporate communications at Etisalat said the suspension of the BlackBerry services will not affect profit or revenue.

The UAE, along with other Gulf states, has one of the highest penetration rates in the world, at around 200%. As a result, local operators are forced to look at methods like mobile data to garner revenue, instead of chasing new subscribers.

But Canadian company Research In Motion (RIM), the maker of the BlackBerry, would also suffer heavily if a ban is upheld. The firm had been requested to base its servers in the UAE - thus allowing access to BlackBerry traffic - but has so far declined to do so.

"RIM have held out so far, but it would be a big blow for them if a ban was imposed in the UAE. They have done well in the country and the region generally," Reed said.

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