Etisalat set for network share challenge with du

While network sharing and direct competition between the two operators has been possible at a technical level for some time, the launch of the service has been delayed.
Etisalat has been increasingly positive about network sharing and fixed line competition. Fatima Al Marzooqi / The National
Etisalat has been increasingly positive about network sharing and fixed line competition. Fatima Al Marzooqi / The National

Etisalat expects to be able to share its fixed network infrastructure with competitor du by the end of this year, finally ushering in direct competition between the pair on landline and internet services.

“Etisalat anticipates that the bitstream access service will be launched by the end of 2014,” the company said in a bond prospectus, referring to the technical solution that enables other operators to share its network. The Telecommunications Regulatory Authority last month said that the technical architecture for infrastructure and network sharing was already in place, and that it was targeting network sharing by the two operators by the end of the year.

Comments made by both operators in recent months have hinted that they intend to offer network sharing in the near future, according to Sanyalak Manibhandu, senior analyst at NBAD Securities.

While network sharing and direct competition between the two operators has been possible at a technical level for some time, the launch of the service has been delayed by protracted negotiations between the operators and the regulator on the commercial terms, he said.

Etisalat said in the bond prospectus that it was still in discussions with du, the TRA and other stakeholders on the nature and pricing of bitstream access products.

Du declined to comment.

Although du launched landline services in 2007, its fixed infrastructure is currently confined to new developments in Dubai.

Du therefore has the most to gain from network sharing in the country, according to Matthew Reed, an analyst with Informa.

“If and when fixed-line competition is introduced in the UAE, du as the challenger will almost certainly seek to substantially increase its share of the fixed market just as it has done in mobile,” said Mr Reed.

“Of course the actual effect on the operators will depend on factors such as the level of competition around services and pricing that is introduced,” he said.

However Mr Manibhandu said that Etisalat has been increasingly positive about network sharing and fixed line competition in recent months, saying that its impact is expected to be “neutral to positive”.

Partly as a result of the lack of direct competition between the two operators, prices for fixed line services in the UAE are far above those in other developed markets.

The cheapest triple play bundles – encompassing landline, internet and internet TV services – offered by du and Etisalat are priced at Dh335 (US$91) and Dh359 ($98) respectively.

Similar basic services start at $70 in New York, $38 in London, $35 in Paris and $15 in Seoul, according to the New America Foundation’s Cost of Connectivity report for 2013, published in October.

jeverington@thenational.ae

Follow us on Twitter @Ind_Insights

Published: May 27, 2014 04:00 AM

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