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Etisalat and Du to compete on fixed line services

UAE telcos "technically ready" for fixed competition, says regulator

The UAE's telecom regulator plans to introduce competition in the fixed line sector within nine months.
The UAE's telecom regulator plans to introduce competition in the fixed line sector within nine months.

UAE telcos Etisalat and Du are "technically ready" to share their fixed line infrastructure, paving the way for open competition in the fixed sector between the operators, according to the UAE's telecom regulator.

The UAE Telecommunications Regulatory Authority (TRA) confirmed that both operators will be able to provide all fixed-line telephone, internet and television services "everywhere in the UAE" within nine months.

H.E. Mohamad Al Ghanim, director general, TRA, said that both operators had completed negotiations on "complex technical and operational details of the network sharing arrangements" and were in the process of testing their networks and systems interfaces.

"Users of fixed telecommunications services across the UAE will be able to access services from both operators once these are commercially launched in the coming months," Al Ghanim said.

Osman Sultan, CEO, Du, said the development was "a major step in the liberalisation of the UAE's telecommunications sector".

"All consumers in the country will have an opportunity to choose their preferred operator for internet, voice and TV services," he said. "Competition will no doubt foster growth of the telecommunications industry, act as a catalyst for the overall economic development of the country and above all, bring better value for customers."

Nasser bin Obood, acting CEO at Etisalat, said the operator was looking forward to competing for new customers within the Dubai free zones and new residential areas.

He added that Etisalat was in the process of completing its fibre optic network, which now covers most UAE households outside of Du's fixed coverage areas.

Milan Sallaba, an independent telecoms consultant based in Dubai, said that the opening of the fixed line sector was good news for the consumer. "It addresses the current monopoly situation in the UAE where only either Du or Etisalat are offering fixed line services in any given location," he said.

"Price reductions and more aggressive bundling of services will be an immediate benefit to both business and residential consumers as the telcos promote their respective value propositions to primarily hold onto their existing market shares."

Sallaba added that this trend had already started with Du increasing its fixed line bandwidth at no extra cost, as well as offering free World Cup subscriptions with certain access packages and broader triple play offers.

He added that Etisalat could initially be the main beneficiary of the development, by opening up access to the "comparatively concentrated and lucrative areas" of New Dubai, including the business-centric free zones of Internet and Media City, and the densely populated Dubai Marina and JBR, and premium residential areas on Palm Jumeirah.

"Du should worry about losing share here as Etisalat will no doubt specifically target these well-identified areas. And whilst Etisalat too could do a lot to improve convenience and their customer service in general, it may nonetheless benefit from a competitor that lately appears significantly below par when it comes to customer care and experience," Sallaba said.

While the TRA's initiative will open up "vast geographical areas" for Du, Sallaba questioned the telco's ability to take on its bigger rival in these areas.

"Given that their [Du] current customer service and on-site engineering already appear to be struggling to provide what most customers consider an acceptable level of service without the added pressure of serving a broader geographical and more dispersed area, it will be interesting to see whether Du manages to shape up sufficiently quickly in these critical areas before alienated customers start to switch in large numbers due to poor service experiences, particularly if price-points for products and services are coming down and converging between competitors," he said.