Etisalat and du ready for a new era of competiton

Phone and internet users across the emirates are expected to be free to choose between services from Etisalat and du soon.

The liberalisation of the telecommunications market was expected to prompt greater competition between the two telecoms companies. Philip Cheung / The National

Phone and internet users across the emirates are expected to be free to choose between services from Etisalat and du within the next four months after the regulator announced testing of the liberalised service is in the final stages.

It also emerged, however, the new era of rivalry between the two operators will be muted initially as the new rules do not yet extend to internet TV (IPTV) services such as Etisalat's E-Life and du's duTV.

Etisalat and du are currently restricted to offering fixed-line services in certain areas. But under long-delayed plans, customers will be able to choose between operators by December, according to the Telecommunications Regulatory Authority (TRA)."The operators plan to extend the … agreement to include IPTV services at a later stage, when a number of commercial and technical requirements are aligned," the TRA said.

Both operators sell internet, landline and TV services as one package, known as "triple play" bundles.

The liberalisation of the telecommunications market was expected to prompt greater competition between the two telecoms companies. But consumers may be reluctant to switch operators until TV is included in the package, analysts said.

"It won't include the IPTV services in the first phase," said Matthew Reed, an analyst at Informa Telecoms & Media. "That's a significant watering-down of the level of competition."

Du is currently restricted to offering fixed-line services in a few high-density areas of Dubai. Analysts expected the liberalisation to present it with an opportunity in the market. But that will be limited because it is not able to compete on TV services, said Mr Reed.

"When du is going into new areas, they won't be able to offer the full triple-play service," he said. "I think that's going to mute the competition … It will have to be a very attractive broadband offer to make you switch."

Martin Mabbutt, a telecoms analyst at Nomura, said the lack of IPTV in the offering "dampens the potential scale of du's opportunity".

Fixed-line sharing was announced last year, but has been subject to several delays.

The TRA said its introduction was "scheduled for December 2011", subject to the feedback of a testing phase that began last Thursday.It said the new system was made possible through the use of technology known as "bitstream access", which allows network sharing between the operators.

Mohamed Al Ghanim, the director general of the TRA said the initiative was "a major milestone" in the UAE telecoms industry.

"We hope that this final stage of testing and implementation is successful so that we can see a commercial launch before the end of the year."