Etisalat extends reach into high-end phones

Etisalat has announced its second device to be sold bundled with a monthly plan.

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Etisalat has announced its second device to be sold bundled with a monthly plan, extending its push into selling high-end mobile handsets as it seeks to offset declining subscriber numbers. The UAE's largest telecommunications company will sell the HTC Magic, the first handset to come with a customised Arabic version of Google's Android mobile operating system.

The model of offering a subsidised or free handset coupled with a long-term contract has been deployed for more than a decade in many overseas markets. Etisalat first experimented with such packages when it launched the Apple iPhone in February. It has since sold more than 30,000 iPhones, attracting affluent high-spending customers who represent the most profitable market segment for mobile operators. Along with the BlackBerry mobile e-mail package, such offers are becoming increasingly important as competition for lucrative customers intensifies.

Etisalat will also launch the new Apple iPhone 3GS by the end of the month, according to Omar Muzakki, who was yesterday promoted to become Etisalat's vice president for consumer marketing. The company lowered the price of its iPhone 3G earlier this week, which has become a standard move by operators around the world in the lead-up to releasing Apple's newest model. The moves come after Etisalat reported its first decline in mobile subscribers, which fell by 80,000 in the three months ending in June. The company's domestic operations, which contribute the bulk of its profit, are being squeezed by a decline in both population and business or leisure visitors.

Its main competitor, du, which has built a brand targeted mainly at price-sensitive customers, launched its first major push at high spenders in April. After reporting a strong take-up of its packages targeted at the upper end of the market, du is in negotiations with Apple to launch the iPhone on its network. It has yet to provide any information on when it expects to make the device available. The Magic also includes applications targeted at the regional market, including an electronic Quran and an Arabic-English dictionary. The phone will be offered for free to customers who sign up to a one-year, Dh460 (US$125.24) per month contract, which includes 10 gigabytes of monthly internet downloads. Sold without a contract, the phone costs Dh2,100, slightly less than the new Apple iPhone.