Tuesday, Aug 03, 2010

(Adds comments, details, background.)

By Tahani Karrar-Lewsley and Nour Malas

Of ZAWYA DOW JONES

ABU DHABI (Zawya Dow Jones)--Telecom operators in the United Arab Emirates Tuesday rushed to assure users of BlackBerry services in the country that they would provide alternative smartphone solutions ahead of a planned ban in October.

Emirates Telecommunications Corp. (ETISALAT.AD), the United Arab Emirates' top telco, at an Abu Dhabi press conference, said it would ensure "seamless business continuity through robust packages" once the ban on BlackBerry messenger, email and web-browsing services--announced by the U.A.E. regulator Sunday--comes into effect on Oct. 11.

Emirates Integrated Telecommunications Co. (DU.DFM), or Du, the country's number two operator, in full-page ads in local newspapers said it was "doing its utmost to ensure the continuity of services with minimal disruptions" for consumers and business customers in light of the looming BlackBerry services suspension.

"We will take suitable measures to respect the terms of your contract, and no penalty fees will be levied because of the suspension of the service," Du said.

The comments follow an announcement by the U.A.E.'s telecom regulator earlier this week that it would ban key BlackBerry services from Oct. 11 due to a long-running dispute with the device's maker, Canada's Research In Motion (RIMM), about how it stores electronic data.

The U.A.E.'s Telecommunication Regulatory Authority, or TRA, said it would block the services due to national-security concerns and the ban would apply to both domestic customers and international roaming users.

If the regulator ban is enforced, Du and Etisalat customers will only be able to use their BlackBerry devices for voice, SMS and MMS services. The full range of BlackBerry services also won't be available for international roaming users in the country, the regulator said Monday.

Etisalat, which said it holds the lion's share of the estimated 500,000 BlackBerry users in the U.A.E., will begin offering alternative smartphone packages before the regulator's suspension of BlackBerry services comes into effect, according to Ahmed Bin Ali, Etisalat group senior vice president of corporate communications.

ALTERNATIVE PACKAGES

"These packages are designed to maintain the customer base," Bin Ali said in Abu Dhabi. "The alternative packages offer substantial customer value reaching 10-times the value of the monthly subscription."

The replacement packages will only be offered to existing customers, he added.

Consumer concerns over the suspension of BlackBerry services have been on the rise since the regulator announcement earlier this week.

"We're getting on average 20 to 30 customer queries on this per day," said Shabnaz Ahmed, a sales executive for Du at a sales and customer service kiosk in the center of a busy Dubai mall.

"Even with the iPhone, BlackBerry is still the most popular phone here," Ahmed said.

Salespeople at retail electronic outlets in the emirate say customers have begun returning recently-bought BlackBerry phones, while users of the smartphone were asking about alternatives or replacements of the hugely popular device.

The ban will be an opportunity "not only for the iPhone, but also all other brands, especially the Nokia E Series," said Dennis Magbuhos, salesman at a Jumbo Electronics store in Dubai.

Meanwhile, a launch party for RIM's much-anticipated new BlackBerry touch-screen slider phone in the Middle East this week has been postponed, a person familiar with the matter said, adding that no alternative date had been given.

A London-based spokesperson for RIM couldn't be reached immediately for comment when contacted by Zawya Dow Jones Tuesday.

The planned ban on BlackBerry services is unlikely to affect Etisalat's 2010 results, said Khalifa Al Shamsi, Etisalat senior vice president for marketing.

"We are working to keep constant profit and revenues. We are hoping all existing BlackBerry customers will migrate to the alternatives so we are not expecting any profit losses," Khalifa said.

Ratings agency Moody's said in a release Tuesday that the financial impact on Etisalat from the planned country-wide ban on BlackBerry services won't become apparent until the announcement of the company's fourth-quarter results.

"Although BlackBerry services are thought to be one of Etisalat's key generators of revenue and profitability, Moody's believes that the conversion rate of customers to permitted data services and the industry's ability to maintain the momentum for mobile data services will be more important than any short-term dips in revenue in determining the impact on Etisalat," the ratings agency said.

-By Tahani Karrar-Lewsley and Nour Malas, Dow Jones Newswires; +9714 446-1692; Tahani.Karrar@dowjones.com

Copyright (c) 2010 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

03-08-10 1339GMT