Business | Features

Etisalat waives annual renewal fees for prepaid mobile service

Move expected to challenge rival du's dominance in client acquisition

  • By Derek Baldwin, Business Features Reporter
  • Published: 00:00 August 2, 2011
  • Gulf News

  • Image Credit: Gulf News Archive
  • Etisalat

Dubai: For the first time since its formation 35 years ago, UAE mobile phone service provider etisalat will no longer demand annual service renewal fees from its subscribers.

Etisalat yesterday texted many of its 7.76 million mobile subscribers informing them that the waiving of the annual Wasel fee is a "special gift from etisalat on the occasion of Ramadan".

Effective August 1, mobile users with Wasel prepaid cards will enjoy what Etisalat calls "free lifetime validity."

The move eliminates the Dh50 yearly renewal fee for current Wasel phone card holders. New subscribers will still pay the Dh75 initiation fee.

Hasan Sandila, telecommunications analyst with IDC Middle East, Turkey and Africa, said the move will help etisalat remain competitive.

Strategic step

"This is surely a good news for etisalat's prepaid subscribers in the UAE as they do not have to pay the annual subscription charge anymore. In short, this announcement could be a strategic step to counter du's dominance in prepaid subscriber acquisition over the last couple of years," Sandila told Gulf News.

"Etisalat obviously becomes more attractive to consumers than it was before this announcement was made, because du still demands the annual renewal fee of Dh55.

"However, the key selling proposition of du's prepaid SIM cards is per second billing and hence consumers will weigh the costs and benefits based on their usage and then choose an operator rather than just considering the renewal costs," Sandila said.

The new strategy could bolster subscriber numbers as du witnesses a climb in new mobile customers .

Around 272,000 customers joined du in the first quarter of 2011 and revenues jumped by 29 per cent year-on-year to Dh2 billion from Dh1.5 billion in the first quarter of 2010.

"This step can indirectly be considered as a decline in etisalat's mobile tariffs, and could result in more prepaid subscribers for etisalat by virtue of inverse proportion," said Sandila. "This waiver of annual fees also provides etisalat with an opportunity to market their prepaid offerings in combination with their strong network coverage to further strengthen their market presence."

Strategic move

In a statement issued yesterday, Matthew Willsher, chief marketing officer at etisalat, said the latest move by the company will save customers money. "The free lifetime validity benefit helps customers maintain their Wasel connections for life, and saves them recurring costs."

New Wasel cards come with pre-installed lifetime validity.

Comments (33)

  1. Added 17:00 August 2, 2011

    I use both etisalat / du and have similar numbers, and it dosen't matter if it starts with 050 or 055, so make the use of the best from each one!

    tahir, dubai, United Arab Emirates

  2. Added 16:20 August 2, 2011

    i think the best way to increase etisalats customes is to introduce special offers such as free sms offers, night time call reductions, etisalat to etisalat special call rates and rate cutters similar to that of Indian telecom providers...

    Sharad, Chennai, India

  3. Added 16:10 August 2, 2011

    Etisalat should allow voip calls and market its own voip calling cards to remove the pollutted market of illegal calling cards right now. There is a new card every day when an existing one is blocked. This will only increase the revenue for etisalat on volume business and through ads of promotors just as it is done in European countries and elsewhere.

    Edwin Joseph, Dubai, United Arab Emirates

  4. Added 15:55 August 2, 2011

    calling off annual renewal fee is not going to help, its better you keep annual recharge fee and try to reduce local call, isd. make billing per second otherwise more and more customer will move from etisalat, already results are showing that.

    mohammad aakil, dubai, United Arab Emirates

  5. Added 15:13 August 2, 2011

    Its about time. But i still think du is much cheaper to use. They have a competitive edge when it comes to seconds billing. I mean seriously calculate it. i make alot a few second calls im a business man and honestly with etisalat it would still end up adding up to a bundle after a whole year. Think about that. Anyhow i welcome this move its a good one. however not until they decide to change it to also to seconds billing like du, will etisalat be a real deal.

    Adil, Dubayy, United Arab Emirates

  6. Added 15:10 August 2, 2011

    Etisalat should think about reality. i am using etisalat line for last 5 years. from last years i am using du and i calculated i got better rate in du. it saves a lot. Etisalat should give per second billing immediately.

    ashan, dubai, United Arab Emirates

  7. Added 14:24 August 2, 2011

    To compete Etisalat must start "per second billing" . Waiving of annual fee will not make much effect- i agree fully

    rubin, mumbai, India

  8. Added 13:37 August 2, 2011

    Etisalat should have offered it during the first quarter of this year. I might still be using my etisalat sim by now. But i don't regret using du, it's very economical for me.

    Jhong, Dubai, United Arab Emirates

  9. Added 13:14 August 2, 2011

    But why my number did not receive this promo? My renewal date is due this Sep 2011. How can I be included in this promo?

    Devine, Dubai, United Arab Emirates

  10. Added 13:06 August 2, 2011

    I have checked my mobile number and it told me that it was only a valid subscription until February 2037. How can this be a lifetime? I plan to live longer than 2037 so what must be done to extend the date?

    Louie Tedesco, Dubai, United Arab Emirates

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