UAE mobile service cost lowest in the region

Mobile service charges, including call tariffs, in the UAE are the lowest in the GCC and among the 22 Arab countries as a result of the competitive pricing plans that etisalat and du have started to offer, new research has revealed.

The competitive prices were introduced after the Telecommunications Regulatory Authority (TRA) announced plans to deregulate the industry.

"Mobile charges in the UAE are competitive compared with the GCC and the Arab World in general," said TRA Director-General Mohamed Nasser Al Ghanim. "A recently completed benchmarking exercise of mobile prices undertaken on behalf of the 22 Arab telecommunications regulators found that mobile prices in the UAE for a basket of services including connection, subscription and usage – both voice and SMS/MMS – were the lowest in the region.

"Both operators in the UAE are currently offering attractive pricing plans, especially for mobile voice services, which is an indication of the continued development of healthy competition in the UAE mobile market," he said.

These price cuts follow the regulatory authority's recent announcement of moves to deregulate the industry. Changes that could be enforced by the end of this year would prevent telecom operators engaging in anti-competitive behaviour such as predatory pricing.

After this announcement was made prices started showing a slight downward trend, with mobile broadband prices falling and annual connection fees also being cut.

Matthew Reed, a senior analyst at research firm Informa Telecoms & Media, said: "Some prices in the UAE have come down as the market has become more competitive. The operators have cut their annual connection fees and might phase them out. Etisalat has cut its iPhone and mobile broadband prices. The TRA has said it plans to allow operators to set prices without its approval and if it does so that might well lead to further price competition."

The introduction of new services and plans will have a positive affect on price points in the UAE and the wider region, said analysts.

Zoran Vasiljev, a partner at research firm Value Partners, said: "Affordability has improved over the past year and consumers are benefiting from more competitive prices."

Analysts said market prices may come under more pressure next year but they do not expect any unreasonable moves or a price war.

An analyst said: "The regional operators are still very profitable and I don't see this reversing anytime soon. Obviously there is still a gap in terms of the price points with more developed countries in the EU and the US, but these regions and their operators are in many ways not comparable to what we have here in the GCC."

Research firm Telegen said most Arab countries had low fixed costs and average-to- high usage costs. International calls were still expensive in the Arab countries with usage levels high at 62 per cent compared with 31 per cent for the leading economies that make up the membership of the Organisation for Economic Co-operation and Development (OECD). In high mobile usage terms only three of Arab countries – Saudi Arabia, Kuwait and Oman – compare with the average OECD cost.

The low fixed cost will, combined with the relatively high usage cost, create a situation where competing operators may easily attract high-volume users.

Anil Khurana, Director of analysis firm PRTM Middle East, said in the UAE prices, especially roaming charges, were about 20 to 30 per cent higher than those in the US and Europe.

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