Tuesday, September 27, 2005

UAE to have telecom duopoly :: Gulf News

We're going from monopoly to duopoly. That's not much competition. Now, mind you, they will be regulated. But, to protect the consumer? No, to protect the competitors.

Quoting (emphasis added):

The UAE's telecom regulator will not allow open competition until 2015. Consumers are expected to be sandwiched between two government-owned operators for services in a planned duopoly, according to officials.

Mohammad N. Al Ghanim, director-general and board member of UAE's Telecommunications Regulatory Authority (TRA), yesterday told Gulf News, licencing of a second telecom operator is currently in progress, without competitive bidding.
. . .
The TRA is working out a price-control mechanism to eliminate the possibility of a price war.

"The new guidelines will dictate how both operators compete with each other in the market and it will address pricing mechanisms and other issues.

"We do not want a price war in the market. The two companies can compete on technology and service superiority," he said, without elaborating.
Still, competition limited to service quality is better than no competition at all.

UPDATE. Actually, not so much an update as providing this link to the Gulf News article on Etisilat's competitor. A few quotes:

The authority's resolution to grant a licence to the new Dh4 billion telecom provider follows a federal government intention to set up a new company in which the General Pensions and Social Security Authority and other private sector shareholders hold a 40 per cent stake.

Remaining stakes will be earmarked for private sector shareholders including a public offering component.

News that the UAE will get a new telecommunications company was widely welcomed yesterday, with industry captains expecting the move to yield better services at more competitive rates.
. . .
Stock market circles felt the company would be based in Dubai with operations throughout the UAE.
. . .
"It will be modelled along the lines of Etisalat," a regulatory agency spokesman said.
A section of the market also observed the second UAE telecom licence is being awarded directly, without having been put through a competitive bidding process.

At the time Adventures in Dubai wrote "Etisalat-2 seems to be owned by various Gubmnt agencies, and is likely therefore to be no more than a palliative to the WTO rather than a genuine competitor who would drive down prices."



Blogger Keefieboy said...

I hate being right (at least in this case).

9:51 AM  

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