BlackBerry ban to benefit other brands

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The news that the Telecommunications Regulatory AuthorityTelecommunications Regulatory Authority (TRATRA) decided to suspend BlackBerry e-mail, web-browsing and messenger services from early October drew mixed reactions among mobile phone dealers on Defence Road, Abu Dhabi's main cellphone shopping centre and the Middle East's largest second hand mobile handset market.

"I am sorry for the subscribers but I can't hide my feelings that I am happy for this decision because it means our business will stand on its feet again," said Jalal Rasheed, manager of AMT, the largest wholesale mobile phone shop in the capital.

"We have been involved in BlackBerry trade but the sale of other famous brands, including NokiaNokia, Samsung and Sony Ericsson, has sharply declined because of the BlackBerry... we hope business will be back to normal."

But they added that this had been offset by a surge in the sale of BlackBerry and its accessories, mainly its famous colourful covers.

NokiaNokia

"Sales have receded... I will not deny this fact," said a NokiaNokia dealer, who was delivering phones at a Defence Road shop.

"But we were less affected than other brands... I think this decision to suspend Blackberry services will give a shot in the arms to our business."

Besides BlackBerry, many dealers and authorised agents of major brands had seen their business hit by the dumping of cheap Chinese mobile phones before they disappeared from the market in successive raids by Abu Dhabi authorities seeking to enforce copyright laws and end market anarchy.

Another dealer said he hoped the suspension would be temporary and the service is restored soon following a surge in his BlackBerry business.

"Look how many BlackBerry handsets we have now... more than a 100... we have been selling at least 20 handsets every week plus hundreds of covers and other types of accessories," said Maher Gaddah, an employee at Golden Crown, one of the largest retail mobile phone shops in Abu Dhabi.

"This decision could cause big losses to us if it drags on... it might boost the sale of other brands but not as much as that of BlackBerry."

Despite its relatively small population, the UAE has one of the largest mobile phone markets in the Middle East, with an estimated turnover of more than Dh2 billion every year.

The country also has one of the highest mobile phone penetration ratios in the world, exceeding 200 per cent at the end of 2009 compared with 182 per cent at the end of June 2009, an increase of seven per cent in just six months, according to official figures.

The figures by TRATRA showed around 72 per cent was controlled by etisalat and 26 per cent by du at the end of last year.

Between 2002 and 2009, the number of mobile phone users in the UAE grew by a staggering 27 per cent annually, one of the highest rates in the world. From around 2.4 million, the number leaped to 7.6 million at the end of 2007 and exceeded 10 million at the end of 2009.

In terms of GDP per capita, the UAE is only second to Qatar in the Arab world, with a record high of Dh195,000 in 2008.

Realising its lucrative market, key mobile phone manufacturers have been locked in an endless battle to grab a bigger share of the UAE, cutting prices and expending their distributor and services network in the country.

Dealers said Finland's NokiaNokia has remained the unquestionable market leader, controlling more than 50 per cent of the turnover before its share began to erode a year ago because of the surge in BlackBerry sales.

Other major mobile phone exporters include Samsung, Sony Ericsson, LG and Motorola while Chinese phones had gained ground at the expense of some brands given their cheap prices and the dual sim facility in most of them.

Estimates provided by most dealers in 2008 put NokiaNokia's share in the UAE market at around 55 per cent, followed by Sony Ericsson at 17 per cent,and Samsung at 15 per cent. The rest was controlled by LG and other brands.

A rapid growth in China's mobile phone industry has turned the Asian giant into the world's largest mobile phone producer, with the total manufactured handsets reaching around 79.6 million in the first two months of 2009. During that period, the value of exported Chinese mobile phones and parts stood at $6.47 billion.

"Our sales of major mobile phone brands have declined by at least 40 per cent over the past two years," said Imad Hariri, owner of the Jawal phone shop.

"This is because of the global economic crisis, the advent of BlackBerry and Chinese phones, and to a lesser extent, the market saturation."

By Nadim Kawach

© Emirates Business 24/7 2010