Telephone calls could become cheaper in the UAE under a new directive by the local regulatory authority. The UAE’s Telecommunications Regulatory Authority (TRA) has directed the two telecom service providers – etisalat and du – to make network adaptations in fixed line network, which will lower the cost to consumers.
"Since 2007, many consumers in the UAE were able to choose their provider of national and international fixed line calls via a technology called Carrier Selection Service (CS). However, the service has some technical limitations; which prevented competition from reaching 100 per cent of the UAE," said TRA board member and Director-General Mohammed Nasser Al Ghanim.
"We expect to see further price decreases when competition is available via Carrier Pre-Selection Service (CPS) throughout the UAE," he added.
The introduction of limited competition, retail prices for fixed network international calls have decreased between 35 per cent and 80 per cent for those customers who took advantage of such services, he said. "Committed to transparency, consumer welfare and safeguarding competition, the TRA has issued directive to Du and etisalat to make network adaptations in order to provide CPS in the fixed line telephone," the telecom regulator said, adding that the latest action will increase competition in the sector, reduce prices, and enable consumers to freely choose their provider of fixed line call services.
The freedom of choice will help increase competition in order to cause price reductions, according to the statement. Al Ghanem said the TRA will achieve this goal in the beginning of 2009, adding it is confident that the service providers will work "diligently to put into place the necessary measures and implement the TRA directives."
Analysts expect the latest directives will further increase fixed line penetration in the UAE, which is ranked first in the Arab world in Networked Readiness Index according to the Global Information Technology Report produced by the World Economic Forum. Among the Arab states, the UAE has the highest fixed line penetration; the highest mobile penetration and the highest internet penetration. Fixed line subscription reached 1.38 million subscribers, with 48 per cent of the lines being residential.
In a recent report, Al Mal Capital said the telecom sector is expected to grow at a CAGR of 8.5 per cent, from Dh21.68 billion in 2007, Dh27.27bn in 2008 and to Dh29.72bn in 2009. By the end of 2012, the total UAE telecom revenues for the two operators is projected to reach Dh35.27bn.
According to the report, Etisalat commands 80 per cent of the UAE mobile market and is aggressively expanding international operations (15 overseas countries, 36m proportionate subscribers). The liberalisation of the UAE telecom sector is driven by the UAE’s membership of the World Trade Organisation, which it joined in 1996. The WTO aims for the global telecom sector to be completely liberalised, free from monopoly or government protection by 2010.
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