Dubai: The impact on telecom operators in the UAE will be minimal should the suspension of BlackBerry services become permanent, according to analysts.
The general consensus, however, is still that BlackBerry manufacturer Research in Motion (RIM) and the Telecom Regulatory Authority will be able to reach an agreement before the October 11 deadline.
The UAE's two telecom operators, Emirates Telecommunication Corporation (etisalat) and Emirates Integrated Telecommunications Company (du), have used smart phone devices such as the BlackBerry and iPhone to drive mobile penetration up after it exceeded 100 per cent.
In the past two years, penetration has reached 200 per cent, with subscriber numbers hitting 10 million.
The BlackBerry has been indispensable as a personal tool and users are far too used to the services, according to Simon Simonian, telecom analyst at Shuaa Capital, one of the larger Dubai-based investment banks covering the GCC.
"Mobility is important for businesses and individuals have also gotten used to it. I'm not worried about etisalat or du. They will more likely replace it with a smart phone," he said.
Simonian said that demand will remain for data plans so the revenue stream for etisalat and du will not be impacted. "People are switching to smartphones, once you get used to that you can't go back. This is a short-term hiccup," he said.
The greater impact for the country would be with regard to its position as a regional financial hub, promoting technological advances.
There is an increasing interest from global institutes, as they look towards this region for its growth opportunities, especially as North America and Europe growth dwindles.
Business travellers to the UAE will also not be able to access their BlackBerry services as their network would be routed through the country's two operators. Additionally, UAE residents travelling outside the country won't have the choice of roaming services which are also being suspended, the telecom watchdog clarified yesterday.
Irfan Ellam, vice-president of equity research and a telecom analyst at Al Mal Capital, also said that there would not be a significant impact on operators by the suspension of BlackBerry services.
"In the event that BlackBerry services are suspended we expect minimum impact on the two operators' financials as users will switch to other devices such as the iPhone, iPad, Android-based devices, Symbian-based, etc. which will allow them to continue to email, browse the web and instant message," he said.
Simonian however said there would be costs that operators will have to face if the ban becomes permanent. "There is a certain cost, you've set up the infrastructure and now have to transition this entire subscription base."
Etisalat has said that mobile data services account for 15 per cent of mobile subscriptions, including smartphone, broadband, with BlackBerry looking to be the biggest single component of that at 5-10 per cent.
Last year, du reported strong mobile revenues of Dh 3.7 billion.
"Revenues they make from smartphones are typically three to fives times as much from regular phones," said telecom analyst Mathew Reed, editor at Informa telecoms and media. The UAE is estimated to have 500,000 BlackBerry users.
Last year, etisalat put its mobile subscribers at 7.74 million. Its net revenues from then totalled Dh30.8 billion.
Etisalat's share price lost 0.5 per cent to close at Dh10.10 on Sunday after the Telecommunications Regulatory Authority ordered the suspension order and du ended flat at Dh2.04.
