Mohammad Al Ganem (centre), director general of TRA, with Nasser Bin Abood, acting CEO of etisalat (left), and Ali Saeed Harmal Al Bhahari, managing director of Abu Dhabi National Exhibition Centre, at the inauguration of Mecom. Al Ganem said the new licensing framework was a tool that will help accelerate competition in the market. Image Credit: Supplied

Abu Dhabi: The UAE telecom industry could see increased services and reduced rates on fixed line telephony as the Telecommunication Regulatory Authority (TRA) says it is ready for a new entrant on virtual network operator basis.

"We have a new licensing framework," Mohammad Al Ganem, director general of TRA said at the Abu Dhabi Telecoms CEO Summit yesterday.

"It has been looked at very carefully… it is a tool to accelerate competition in the market," he said about fixed virtual network operators for fixed line services.

He said that managed services would be a focus, as these would have a significant impact on local businesses.

The development would stimulate competition in the market, which had been lagging significantly compared to mobile services, he said.

While the systems were in place for the country to open up mobile virtual network operators for fixed line services, no companies have approached the TRA to launch its services.

Usually, mobile virtual network operator (MVNO) entrants emerged when the market was penetrated significantly but there were opportunities to develop specific services.

Recently, Oman saw the first MVNO in the Middle East, when Frendi Mobile and Renne entered the market last year, operating through agreements with fixed and mobile incumbent operator Omantel.

Al Ganem said he did not see MVNOs providing mobile telephony as a value -add in the market.

"Both operators are investing in mobile infrastructure and we don't want that to stop," he said, adding that he didn't see new entrants acquiring market share.

In the past years, mobile pricing has dropped for international calls by 70 per cent and for local calls by 35 per cent, Al Ganem said.

Meanwhile, fixed line pricing had not changed much. He said the reason behind this was that the country's operators had a monopoly on geographic locations.

Etisalat, providing services nationwide except certain free zone areas in Dubai, had been told to open up its network to competitor du. Al Ganem said the deadline was June.

"We've been supervising and pushing operators to open up their networks," he said.

Contribution

The United Arab Emirates telecoms sector contributed nearly five per cent to the country's GDP in 2009, the regulator said on Monday.

Investments in the industry totalled Dh9.5 billion ($2.59 billion).

First review

The Telecommunications Regulatory Authority (TRA), in its first annual review, also said mobile penetration in the UAE had reached 204 per cent and internet use penetration touched 67 per cent last year.

The UAE has one of the highest mobile penetration rates in the world.

The large expatriate population enables the two operators, Emirates Telecommunications Group (Etisalat) and Du, to earn high revenues from international calls.

According to the review, the total investment in the telecoms sector increased by 16 per cent between 2008 and 2009.

Mobile subscriptions grew by 14 per cent, while mobile revenues increased by three per cent during the same period.

Fixed lines revenue

The number of fixed lines increased by seven per cent and fixed lines revenues jumped 21 per cent, the review said.

The review did not give a break-up of the figures for the individual operators to protect the confidentiality of each licensee, it said.

Key notes

Main service approaches by MVNOs globally fall into the following categories:

  • - Discount
  • - Community/segment-targeted
  • - Full service, emulating a mobile network operator (MNO) or host network
  • - Premium service provider (of data and/or entertainment services)
  • - Converged bundled services or fixed-mobile convergence
  • - Location-based services
  • - Enterprise/business-focused Advertising

- Source: Informa