Thursday, Jul 25, 2013

Dubai: Network infrastructure sharing will boost competition and lower retail prices in the UAE telecom market, but it is very unlikely to happen this year, industry experts said.

“Officially, a network sharing deal should happen this year as TRA is very keen, but practically, it will be in 2014. Even if the deal is signed it will take few more months to switch traffic between the operators,” Jonas Zelba, senior research analyst at Frost & Sullivan, told Gulf News.

The latest TRA report states that the two telecom operators have a dispute about the bitstream access, where one operator can permit the other to use its fixed network for a fee.

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.

“Etisalat has a major share in the fixed network business but Du is offering a better deal than the other player. For etisalat to catch up with the Du’s fixed line business, especially in IPTV space, they need time to adjust their rates. If network sharing happens now, many subscribers will jump to Du’s network. In order to be competitive, etisalat needs to match Du’ fixed and triple play offerings and that is the reason why etisalat does not want to share the infrastructure,” he said.

Market share

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.

Osman Sultan, CEO of du, said that networking sharing deal is very important to us. I have been always saying that this will access to the entire country when it comes to home services, wired services to business in terms of broadband internet, IPTV.

“All components of the agreements are agreed on but there is still a divergent point of view of the economical equation between the two players. We are in discussions and we are hopeful that this will come to a conclusion,” Sultan said.

When asked whether etisalat is scared of losing its monopoly position in IPTV market, Sultan said it wouldn’t be appropriate for him to answer yes to that question. “If you are in a monopoly position, it would always be comfortable to keep the monopoly position. The name of the game is that every person, household and business in the UAE should have a complete choice on the complete services that are offered in the telecom space. It is our next phase of growth. There are a lot of right people sitting on the table for this to happen. I don’t know whether it will happen this year as I am not the decision maker,” he said.

Etisalat was not available for comment at the time of going to the press.

Testing

“One reason for the delay could be that the TRA and the operators are still testing the proposition of fixed network sharing in UAE and once they are confident about the quality of service and fair opportunity for operators, it would be enabled. It is imperative to note that the network sharing involves alignment of networks and systems which is a tedious process and hence time consuming,” said Hassan Sandila, senior telecom analyst at IDC.

The IDC feels that true network sharing might still be anywhere between 6-12 months away in the UAE.

“Even though we have duopoly in the market, it is really not. Users don’t have a choice. You can say it as a monopoly by both the operators. If the network sharing deal happens, du will gain in the short term. In the long term, both operators will compete against each other and everything will depend on the packages and rates,” Zelba said.

By Naushad K Cherrayil Staff Reporter

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