Residents will now be able to switch between fixed phone and broadband operators after the two telecommunications companies signed a formal agreement yesterday.
Etisalat and du signed the deal to share the country’s fibre network, allowing them to offer services to customers who have been limited to one provider.
The Telecommunications Regulatory Authority yesterday said the move would lead to great improvements in the quality of services through healthy competition.
“It’s an excellent step that we are giving the customer the opportunity to choose,” said Majed Al Mesmar, deputy director general of the TRA.
“The quality of service being offered will definitely change. Those who ignore it will lose customers now that the other operator has the same chance.”
But the wait for internet prices to fall will continue, as competition in pay TV and commercial broadband is still some way off.
“For now, the competition will only be over fixed phone and broadband services rather than triple-play packages that include TV,” said Matthew Reed, regional leader for telecoms consultancy Ovum.
“Also, the bitstream system offers only limited flexibility to the operators in how they can package their services.”
Etisalat and du began offering “bitstreaming”, through which the network is shared, two months ago when a deal was reached after six years of negotiations with the TRA.
Both operators yesterday said they welcomed the move towards competition.
“We believe that offering residential customers the option of choosing their telecoms operator for voice and broadband will further drive network excellence, thus escalating our stature as a smart nation,” said Osman Sultan, chief executive of du.
Saleh Al Abdooli, Etisalat’s chief executive, said: “We see competition on fixed services for residential customers as an opportunity for growth.
“Having played our part in furthering the bitstream agreement under the TRA’s supervision, we look forward to its positive impact on the UAE’s telecoms landscape.”
Movement between the providers will be limited until customers are able to change their pay-TV packages, said Tibor Bokor of Arqaam Capital.
“If your line is provided by Etisalat, you could get your fixed telephone and internet services from du, but you’d need to keep getting your TV services from Etisalat,” Mr Bokor said.
“Customers do have greater choice but most customers will prefer to stick with just one provider rather than have two at the same time.”
TV services and the lucrative commercial broadband market will be part of a second phase, said Mr Al Mesmar. He did not give details of how long that would take.
“Our role is not just to request or instruct the operators to reduce their prices or increase prices – we have no business with that,” he said.
Etisalat’s customer care team confirmed yesterday that it was now offering fixed line and internet services in areas of Dubai such as Jumeirah Lakes Towers and Arabian Ranches, which have so far been the exclusive domain of du.
But a du customer service representative said that Etisalat customers in Abu Dhabi could not yet transfer their services to du, but the service would be available “in a few months”.
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