Broadband unity may not bring price cuts

Etisalat and du in line to share networks with both operators initially likely to push special promotions to attract new customers.

UAE residents should not expect an immediate price drop for internet services when the country's telecommunications operators begin to share each other's broadband networks. Etisalat and du will initially market their national broadband services with special promotional offerings such as temporary price cuts and bundled deals that are designed to entice subscribers.

The Telecommunications Regulatory Authority (TRA) has been working with both operators to ensure the UAE's broadband market will be fully competitive as early as the end of this month. As Etisalat and du have been working to meet the tricky technical requirements to allow the operators access to each other's networks, they are cautious about how they intend to capitalise on the marketing of the services across the nation.

"The first couple of weeks will create a dynamic in the market and we have to understand this dynamic before we do anything else," said Farid Faraidooni, the chief commercial officer for du. "[du's offers] will be differentiated through our 'experience'. It's what goes with broadband. Broadband is just an access to the internet, so what do we do beyond that? For example, the bundling, the packaging and the services with it."

Khalifa al Shamsi, the senior vice president of marketing for Etisalat, said the company might offer tiered broadband packages giving different levels of quality. "When you look at what consumers want from a service provider it can be provided through various pillars, one of which is the extreme network quality that is provided from the PC at home to the global [internet] routes that we have," Mr al Shamsi said.

"Others may come in various forms such as tariff plans, content, applications and devices." The operators have already released promotions pushing 3D television to coincide with the FIFA World Cup, while Etisalat has included a TV service to its bundled eLife fibre-optic service. Industry experts believe any new broadband promotions would be likely to come in August, either to coincide with a special Ramadan deal or the start of the new English Premier League season, which will be available online provided by the Abu Dhabi Media Company, the owner and publisher of The National.

"You may see something that resembled the mobile market where du targets the lower end of the market aggressively, such as a broadband and landline bundle at a rock-bottom price," said Julian Herbert, a principal broadband analyst with Informa Telecoms and Media. Mr Herbert said lower prices might be offered but there was a risk that the quality of the broadband connection might not be as reliable as customers wanted. "Quality isn't particularly outstanding at the moment but you get what you pay for."

Broadband internet prices in the UAE are among the highest in the region and have caused complaints from customers who see similar services available in North America and Europe at a fraction of the UAE cost. But Etisalat did cut the prices of its high-speed internet by up to 40 per cent when it launched its eLife service in December. What is not immediately clear is if du will have access to Etisalat's nation-wide fibre-optic cable network. Etisalat spent Dh5 billion (US$1.36bn) building its national fibre-to-the-home network that is expected to be completed by next year, but du may initially only have access to its rival's basic copper-wire broadband network.

"The issue of sharing the network is with the regulator and no final announcement has been made but it's in the roadmap of the regulatory framework in the UAE," said Mr al Shamsi.