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UAE phone bills to drop next year

Telecom regulator says changes to phone network will increase competition, benefit consumers.

The UAE's telecom regulator has said it expects consumers to enjoy lower phone tariffs next year as providers Du and Etisalat make further changes to the phone network.

UAE daily Gulf News reported on Sunday that the Telecommunications Regulatory Authority (TRA) has directed the two operators to provide Carrier Pre-Selection Services (CPS) for customers in the Gulf state.

The system will allow customers to have their calls automatically routed through a network offering lower call cost, but without the need to dial a prefix or use special equipment.

This will increase competition in the telecom sector, reduce prices, and enable consumers to freely choose their provider of national and international fixed-line call services, the TRA said in a statement.

The telecom market has a high rate of penetration, but Du and Etisalat mainly compete on services rather than price, resulting in high tariffs, according to the newspaper.

According to an industry report by investment bank Al Mal Capital, mobile penetration last year was 166.4 percent, while internet user penetration was 44.7 percent. The rate for fixed-line penetration was 30 percent.

The report noted that once carrier pre-selection service is fully implemented, users could take advantage of Du's cheaper peak time international charges, and this should encourage Etisalat to lower its international call rates.

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