According to the company's annual report, Etisalat generates 21 per cent of sales from its fixed-line and internet businesses.
According to the company's annual report, Etisalat generates 21 per cent of sales from its fixed-line and internet businesses.
According to the company's annual report, Etisalat generates 21 per cent of sales from its fixed-line and internet businesses.
According to the company's annual report, Etisalat generates 21 per cent of sales from its fixed-line and internet businesses.

Etisalat and du to tear down barriers


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Etisalat will no longer have a monopoly on the UAE's telecommunications services when the upstart operator du gains access to its network this month. Barring technical delays, both operators will have access to each other's respective areas and provide a full range of telecommunications offerings to residents and businesses within weeks.

Analysts widely expect that du will gain valuable internet and television market share now that it has access to all of the country's residents and businesses. It will also in turn give Etisalat access to highly lucrative areas in Dubai such as Dubai Marina and the internet and media free zones owned by TECOM Investments. "We have been asking for this since the day we started [in 2007]," said Farid Faraidooni, the chief commercial officer for du.

"Obviously there will be some customers that would go to the competition. That would be the nature of competition, but we are not at all concerned that we will be losing revenues." Mr Faraidooni confirmed that du would also be able to market its internet protocol television, or IPTV, across the UAE, in direct competition with Etisalat's E-Vision offering. Analysts said this would see IPTV services maturing, with the UAE telecoms likely to open direct discussions with content owners over TV and video-on-demand (VOD) rights.

"To have the market properly opened up is great news from a consumer point of view. It will also consolidate the position of IPTV, and probably act as a bellwether for the rest of the GCC," said Nick Grande, the managing director of ChannelSculptor, a television consultancy in Dubai. Mr Grande added that liberalisation of the market could prompt a situation where the telecoms start to develop relationships directly with the content providers.

"Up until now, the relationships between content owners and telcos have all gone through third parties. There have been no direct negotiations between the telcos and content owners," he said. This could also prove attractive to advertisers. Historically, the popularity of satellite TV has meant that advertisers have been unable to target specific markets because, in general, the same broadcasts are beamed across the entire Arab world.

But domestic IPTV services allow advertisers to target individual markets. "You don't have satellite footprints on a country-by-country basis, so cable operators have a great deal to offer," Mr Grande said. "Advertisers may consider advertising directly on IPTV platforms. You could see the situation where the basic package of either operator [Etisalat or du] is in every home with a phone line. That's a lot of eyeballs."

Historically, du has been "very aggressive on the content side", Mr Grande said. "They've positioned themselves as a content provider, not just a telco. Etisalat's E-Vision product has not had a similar degree of positioning." Mr Faraidooni said du's commitment to offering "complete home entertainment" packages remained strong. "We are continuing to invest in our media and entertainment platforms. There will be exciting services that we will add to our video-on-demand packages," he said.

An Etisalat spokesman said the operator's E-Vision service had survived "stiff competition", not only from other operators but also from the free-to-air channels and piracy, in its 10 years of operation. "We will always have an edge over others as we continue to evolve at a fast pace," the spokesman said. The influx of competition in the UAE market will be likely to hit Etisalat's bottom line. The company generates 86 per cent of its revenue from its domestic operations. It reported revenue of Dh30.8 billion (US$8.38bn) last year, an increase of 5 per cent from the year before.

Although Etisalat does not break down its domestic revenues by segment, about 21 per cent of the operator's total sales are generated from its fixed-line and internet businesses, according to the company's annual report. Etisalat has announced a major push into international markets, and there may be a re-evaluation of where it makes its acquisitions. By comparison, du has no immediate plans to compete outside the UAE.

"It's not at a critical stage, but the pressure is mounting for Etisalat," said Matthew Reed, a research analyst with Informa Telecoms and Media. "Etisalat is looking to keep a strong position at its home market and get some better performances in its overseas markets. Some of those are doing very well, like Mobily [in Saudi Arabia] and Etisalat Misr [in Egypt], while others are a bit less so and they're new investments."

Irfan Ellam, a telecoms analyst with Al Mal Capital, noted that Etisalat had not made any acquisitions this year despite its negotiations with operators in Iraq, India and Africa. "It appears that Etisalat is still cautious," Mr Ellam said. "You could argue that they're too cautious and they've got too much cash sitting on the balance sheet waiting to be deployed." dgeorgecosh@thenational.ae

bflanagan@thenational.ae

Electric scooters: some rules to remember
  • Riders must be 14-years-old or over
  • Wear a protective helmet
  • Park the electric scooter in designated parking lots (if any)
  • Do not leave electric scooter in locations that obstruct traffic or pedestrians
  • Solo riders only, no passengers allowed
  • Do not drive outside designated lanes
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Group A: UAE, Spain, South Africa, Jamaica

Group B: Bangladesh, Serbia, Korea

Group C: Bharat, Denmark, Kenya, USA

Group D: Oman, Austria, Rwanda

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Manchester City 4 (Gundogan 8' (P), Bernardo Silva 19', Jesus 72', 75')

Fulham 0

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THE SIXTH SENSE

Starring: Bruce Willis, Toni Collette, Hayley Joel Osment

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Rating: 5/5

Defence review at a glance

• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”

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Du Plessis plans his retirement

South Africa captain Faf du Plessis said on Friday the Twenty20 World Cup in Australia in two years' time will be his last.

Du Plessis, 34, who has led his country in two World T20 campaigns, in 2014 and 2016, is keen to play a third but will then step aside.

"The T20 World Cup in 2020 is something I'm really looking forward to. I think right now that will probably be the last tournament for me," he said in Brisbane ahead of a one-off T20 against Australia on Saturday.