Business | Telecoms

Etisalat vs du mobile tariff wars 'cannot continue'

Etisalat offers prepaid Wasel customers international calls for 0.4 fils per second

  • By Naushad K Cherrayil, Staff Reporter
  • Published: 17:47 August 15, 2013
  • Gulf News

Dubai: Even though competition is taking place in the mobile phone tariffs among UAE telcos, it cannot continue for a long time nor can it go down indefinitely, an industry expert told Gulf News.

“It is a positive development in the market where we see the operators are responding to market needs and it shows that the competition is moving to the next level,” said Bhanu Chaddha, senior telecom analyst at IDC.

Etisalat has started its new tariffs to 11 countries for prepaid Wasel customers to make international calls at 0.4 fils per second, equivalent to 24 fils per minute and it is the lowest in the market. A call set-up fee of Dh1 per call will be applied at the beginning of the call.

Du had started a 0.5 fils per second for selected nine international countries with a set up fee of 50 fils per call and it is valid for three months.

Chaddha said mobile is an important aspect to their operations and expat population in these countries make a compelling proposition for the operators to make promotional offers. These promotional offers are obviously part of their strategy to continue to engage their customers, as it is creating value for the customers.

“If you look at the economics, at the end of the day, the value is created for the operators with the upfront charge. Everyone is moving towards primary SIM usage. Multi-SIM usage in the country is very high so you need to incentivise your customers to ensure that the particular SIM is a primary SIM. That is where the competition is coming into play,” said Chaddha.

The reduction in tariffs cannot go down “indefinitely” because it can affect the bottom line of the operators. Operators are also advised to not to get into a pure price war.

“In certain countries we have seen that price wars have not benefitted the telecom operators amid benefitting the customers. The telecom operators in the UAE still have room to improve their performances,” Chaddha said.

When asked whether the same competition will happen in the fixed network when TRA approves the network infrastructure sharing agreement, he said definitely competition will be there when the market opens up.

In the first phase, Chaddha said that internet protocol television (IPTV) is not included. When it opens up, price will be the key point.

According to Jonas Zelba, senior research analyst at Frost & Sullivan, infrastructure sharing will boost competition and lower retail prices in the UAE.

Zelba said that du is waiting for the TRA’s approval on network sharing to grow its fixed line subscribers and they are gearing up to be a strong competitor.

Fixed network sharing was initially planned to be enabled by the end of 2011 so that both etisalat and du can eye for each other’s market share. Both operators have marked their area of coverage so there is no real competition. Du primarily serves the newly developed areas and free zones in Dubai and etisalat serves the rest of the market and is by far the dominant operator.

IDC feels that true network sharing might still be anywhere between six to 12 months away in the UAE.

Comments (10)

  1. Added 19:28 August 16, 2013

    First off all we thanks to Du company who introduce in UAE Other wise Etisalat will never reduce local &i International call charges But still they charge more then india for using Internet or 3G services In india Airtel charge 670 MB for Dhs 7 and here 40 MB for 20 Dhs Still they feel company running in loss

    Shajahan, Dubai, India

  2. Added 19:10 August 16, 2013

    Please consider the monthly E-life charges also

    VIPIN VINAYA KUMAR, DUBAI, India

  3. Added 18:29 August 16, 2013

    UAE prices cannot be compared with Indian prices. In India purchasing power is poor compared to UAE. Salaries in UAE are much higher than in India and most other countries. Etisalat and Du also need to pay such salaries and pay high for other services. Automatically they need to charge higher prices than India.

    Peter Smith, Brampton, Canada

  4. Added 17:44 August 16, 2013

    Call up to 8 minutes, DU is cheaper.

    Renny Jacob, Dubai, United Arab Emirates

  5. Added 17:04 August 16, 2013

    i switched to Du from eti with same mobile no from 050 - 055 after 16 years as i find monthly rental of dh 50 unsuitable as there are additional charges & deposit when roaming outside uae.....Du does not charge except the roaming fee..

    tommy, dubai, United Arab Emirates

  6. Added 16:26 August 16, 2013

    I guess its time to switch to DU... Etisalat got Very poor services and alot of hidden charges....

    Asif Rahman, RAS AL KHAIMAH, United Arab Emirates

  7. Added 16:14 August 16, 2013

    Etisalat & Du is still charging high compare to other countries like india. If you look in to other sevices like internet (e-life) it is very high. one month charge is equal to 6 months internet bill in india.

    Bhaskar, Kerala, India

  8. Added 14:39 August 16, 2013

    Etisalat pices are not the cheapest. you need to consider the setup fee. for a minute call etisalat will cost 24+100 fils ie. 1.24 AED. while du will cost 30+50 fils ie. 80 fils per minute.

    Safwan Rasheed, Sharjah, United Arab Emirates

  9. Added 13:13 August 16, 2013

    I already switch from Etisalt to DU, due to Etisalat's poor customer service and hidden charges.

    Mahesh, dubai, Uganda

  10. Added 13:07 August 16, 2013

    competition is healthy, depends how healthy its for the company. if Vodafone had been in this market. then DU and Etisalat would know what is run for the money. marketing is all about understand the needs of the end users and providing quality service. its basis simple rules.

    karim, dubai, United Arab Emirates

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