UAE is prominent on the global telecom map

The UAE has a prominent place in the world telecom map for having one of the highest penetration levels for mobile phones, the Internet and fixed land phones. The UAE's telecommunications sector, dominated by Etisalat for 30 years, is currently a duopoly market after the second telecom operator, Du. Thanks to the high oil revenue and overall economic prosperity, the UAE telecom market has been growing at a rapid pace. The country has a mobile penetration of 166.4 per cent at 2007-end.

The impact of telecom revolution is evident from the number of diverse telephone ring tones in public places and the amount of text message transactions through the two telecom operators in the duopoly market. As the telecom revolution is entering the new technologies like mobile television and video phones, the country's duopoly market is expected to welcome a third operator after 2012.

Mohammed Hasan Omran, Chairman Etisalat, said the growth oriented vision and policies of the rulers helped the UAE to become a country of the future. He said: "On behalf of Etisalat I wish to congratulate His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE and Ruler of Abu Dhabi, and Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, Ruler of Dubai, and all citizens of the UAE on the 37th National Day."

He said the high level of investment in technology and initiatives from the public and private sectors are helping to realise the vision of the government and are also supporting the growth of the UAE. They are also helping to make the UAE economy one of the most dynamic in the world. The wide availability of new technology has helped the UAE to become the country of the future."

"Etisalat is today a multinational organisation operating across 17 markets in Asia, Africa and the Middle East and servicing 74 million customers. We are delighted to represent the UAE abroad and each Etisalat employee is proud to maintain the personal and professional standards that are inspired by the words, actions and leadership of the rulers of the UAE," he said. Etisalat, a cash rich company, is currently looking at new acquisitions using its cash reserves estimated at Dh3 billion. The firm is truly an Emirati multinational company with operations in several countries in two continents.

Du (Emirates Integrated Telecommunications Company PJSC) Chief Executive Officer Osman Sultan, said the company could successfully record a profit in the third quarter of 2008. For the first time the second telecom operator posted its first ever profit in the third quarter of 2008, a year ahead of schedule, due to strong subscription growth and a one-time gain. "Du is proud to be opening the door to endless possibilities for a new generation that is rapidly becoming a part of the global 'telecom civilisation'.

Telecommunications have become an integral part of our everyday lives and will become even more so as we move towards an unprecedented level of integrated convergence. Our offering will set us apart in the sector with a range of telecommunications and entertainment services – mobile and fixed line telephony, broadband internet, TV, video and business solutions."

"Du posted net income of Dh31.47 million ($8.57m) in the three months ended September 30, compared with a loss of Dh241.94m a year ago," the CEO informed Dubai Financial Market where the share is listed following an initial public issue that was oversubscribed several times. The company plans $2bn investment for infrastructure development to achieve 30 per cent market share. Its special promotions and offers have attracted many customers to the young telecom operator. As a result, du more than tripled its mobile telephone subscriptions to 2.67 million, compared with 883,000 a year ago. "The profit was due to an increase in subscriber numbers and cost-efficiency," Sultan said earlier. Fixed-line subscriptions grew by 30,000 to 248,000 in the same period.

Etisalat, the first and only telecom operator in the UAE for three decades, controlled 80 per cent of the UAE mobile market and is aggressively expanding international operations –with contracts in 15 overseas countries, ranging from Saudi Arabia to Pakistan, Afghanistan and even planning to bid for telecom projects in India. As growth in the domestic market is restrained by the duopoly structure, its growth and profitability are further driven by its rapidly expanding overseas operations du commenced operations in December 2005 is currently targeting a 30 per cent market share by 2010. In February 2006, du received its integrated provider license at a cost of Dh124.5m ending Etisalat's near 30-year monopoly on the provision of telecom services. The TRA awarded incumbent Etisalat its integrated license in May 2006. The 20-year renewable licences allow both operators to provide full telecommunications services, including fixed network, national and international call services, national and international mobile services and internet connectivity. Under the terms of the licences, Etisalat and du must both pay annual royalties, annual licence fees, radio spectrum fees and contribute to the Information and Communication Technology (ICT) Development Fund. The country's telecom regulator, TRA is not averse to the idea of having the third telecom operator in the country after du growing up to face such a competitive market.

According to a report by Al Mal Capital Research, a 4.8 per cent annual population growth in the UAE will drive the country's telecom sector over the next few years, resulting in a combined CAGR of 8.6 per cent. For Etisalat and du's revenue from UAE operations is projected to grow to Dh35.27bn by 2012, up from Dh21.68bn in 2007.

Assuming no new market entrants, the overall UAE telecom market is projected to grow at a CAGR of 8.5 per cent, from Dh21.68bn in 2007, Dh27.27bn in 2008 and to Dh29.72bn in 2009. The end of 2012 estimates the total UAE telecom revenues for the two operators estimated to reach Dh35.27bn. The UAE mobile market is projected to grow from 7.7 million subscribers in 2007 to 9.2 million in 2008 and to 11.9 million by 2012. Given the already very high penetration rates in the UAE, the penetration rates is expected to grow modestly from 166 per cent in 2007 to 188 per cent by 2012.

Investment analyst's projects total mobile revenues to grow from Dh13.70bn in 2007 to Dh18.02bn in 2008.


Telecom fact file

The Telecommunications Regulatory Authority has been established according to the UAE Federal Telecom Law. The regulator has taken several initiatives to encourage competition and improved customer service by the two telecom operators. It has also aligned with the industry leaders to train local talents to meet the growing manpower requirement in the sector.

The Scholarship Coordination office Board of the Ministry of Presidential Affairs and TRA have jointly launched Betha project to sponsor 100 academically distinguished Emirati boys and girls from all over the UAE to study Information and Communication Technology in leading international universities. The project, part of TRA Strategic plan for 2008-2010, will train national graduates in the ICT field to meet the current and future manpower demand in the field. Etisalat employs thousands of Emirati engineers
and technicians.

Follow Emirates 24|7 on Google News.