Abu Dhabi: Telecoms opens further

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Greater competition in the UAE’s telecommunications industry is expected to usher in an era of increased choice and lower prices for consumers of fixed-line telecoms services, particularly high-speed broadband.

The Telecommunications Regulatory Authority (TRA) recently confirmed that Etisalat and du, the UAE’s two telecoms operators, are going to share each other’s internet and television networks, placing the rivals in direct competition.

Industry experts and consumers are looking forward to the showdown, which is expected to start in the next few months, barring any technical delays.

“The parties have now concluded the negotiations on complex technical and operational details of the network-sharing arrangements, and are currently in the process of undertaking comprehensive testing of the networks and systems interfaces,” said Mohammed Al Ghanim, the director-general of the TRA.

Until the process begins, Etisalat will continue to hold its current monopoly on fixed-line telephone, internet and cable TV services throughout Abu Dhabi and most of the UAE. “Users will be able to access services from both operators once these [network- sharing arrangements] are commercially launched in the coming months,” Al Ghanim said.

For consumers this is, of course, welcome news. After all, network sharing will mean more choice, while more intense rivalry between the two telecoms players is likely to bring down prices.

In fact, both operators have already indicated that they will introduce special promotions on broadband services, including temporary price cuts and bundled deals, a competitive process which it is hoped will encourage greater internet use in Abu Dhabi and the UAE.

The two operators are unlikely to change things too rapidly, however, preferring instead to see how the deal plays out before making longer-term decisions. “The first couple of weeks will create a dynamic in the market and we have to understand this dynamic before we do anything else,” Farid Faraidooni, the chief commercial officer for du, told Abu Dhabi daily The National.

Greater connectivity is seen as a key area of development by policymakers. As outlined in the Abu Dhabi Economic Vision 2030 released by the Department of Economic Development, the government plans to make information and communication technologies (ICT) an integral part of the emirate’s development.

While Abu Dhabi and the UAE in general have made progress on increasing internet access and bringing down prices – broadband speeds of less than 1 MB are the cheapest in the GCC ¬– the costs are still high compared to other countries. In Turkey, internet prices for this speed are 72% lower, according to a Federal National Council study released earlier this year.

High-speed internet access is important to homes, but it is even more essential for businesses and commerce. News of increased competition in the sector means many companies in Abu Dhabi, and the wider UAE, will be hoping to see a reduction in their internet costs in the near future.

Businesses and commercial users in the UAE face higher prices than their counterparts abroad, with the cost of broadband at speeds of 1-4 MB some 91% lower in Morocco. In Europe, meanwhile, they are on average over 95% lower.

The network-sharing deal should bring faster internet to a number of local firms, with the Abu Dhabi government likely hoping this will boost economic activity. A 2009 report from the World Bank found that a 10% increase in high-speed internet connections can boost a developing country’s economic growth by up to 1.3%.

Future competition will most likely take place across mobile, satellite, broadband and fixed-line telecoms markets. On the regulatory side, the TRA is likely to need to continue evolutionary moves such as the network-sharing deal to meet the increasing demands of the technology savvy population.

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