Forecasting effects of competition in UAE telecom - Gulf News

Last Friday, the government said it would license a second cellular company in the UAE, which is expected to begin operations in the second half of 2006.

"Etisalat is alone in the UAE but operates as if it is in a competitive environment, flooding the market with cutting edge technologies and tempting customers with attractive offers," said Andrawes Snobar, a research analyst at Arab Advisors Group.
In 2004, Emirates Tele-communication Corp. (Etisalat), 60 per cent owned by the UAE government, was the first to roll out a third generation (3G) network that allows the transmission of bulky pictures and videos, among the Gulf Arab countries.

It also offers the cheapest mobile rates among 18 Arab countries, according to an Arab Advisors report published in March, which will be a stiff challenge to the new company.

Still, UAE tariffs are higher than in some other countries.

A mobile call in the UAE currently costs Dh0.24 during peak hours while it costs Dh0.17 in India; an international call to the US costs Dh2.12 during the peak hours but Dh1.18 in India.

Third firm? Meanwhile, the director-general of the UAE Telecommunication Regulatory Authority (TRA), Mohammad Al Ganem, answers this question from Gulf News:

Gulf News: Now that a second telecom licence is approved, will it pave the way for further liberalisation, perhaps for a third player?

Mohammad Al Ganem: Not now. We will let the second operator some time to acquire market share and then slowly liberalise the market. We have to give the newcomer time to stabilise.