Telecoms regulator quashes talk of new licences in UAE

The Telecommunications Regulatory Authority has denied rumours that it will launch mobile virtual network operator licences in the UAE.

The Telecommunications Regulatory Authority (TRA) has denied persistent rumours that it will launch mobile virtual network operator (MVNO) licences in the UAE.

"There are no plans for MVNO. We are happy with the current structure of the market," said Mohamed Al Ghanim, the director general of the TRA.

MVNOs differ from traditional mobile phone operators as they do not build their own telecoms infrastructure. Instead, they buy mobile voice minutes and data access on a wholesale basis from an incumbent operator and sell them on to the market. Usually, MVNOs price their service charges below prevailing consumer rates of incumbent operators.

MVNOs tend to segment the market, offering services tailored to a specific user in mind. They help to increase competition and further liberalise the sector.

The UAE mobile sector is currently a state-controlled duopoly, headed by incumbent Etisalat and du, which was founded in 2006. Since its launch, the UAE's second mobile operator has managed to eat away at Etisalat's monopoly, gaining a 45 per cent share of the mobile market. Last year, du added 883,000 mobile active subscribers while Etisalat lost 7,500.

The mobile penetration rate in the UAE exceeds 230 per cent as of the end of the second quarter of this year. The UAE telecoms sector is one of the most lucrative in the country and liberalisation would likely hit the profits of the two operators.

Oman was the first country in the region to introduce MVNO licences. Dubai-based MVNO Friendi Group launched its services in Oman in 2009 and competes with Renna Mobile in the Arabian Gulf state.

Jordan is the only other country in the region with MVNO operators.