Customers in the UAE will soon be able to choose their provider for home TV, internet and phone services regardless of where they live, the telecoms regulator promised yesterday.
“We already have a clear policy for infrastructure sharing or the sharing of networks. The target is to have the commercial launch this year,” said Fintan Healy, the executive director of regulatory affairs at the Telecommunications Regulatory Authority (TRA).
Last December, the mobile phone market was opened up further with subscribers allowed to switch between the two operators – du and Etisalat – while keeping their mobile numbers unchanged. However, for home services the country is still lagging. Consumers are forced to use one operator based on the area in which they live.
“We achieved more in mobile, largely because it’s more competitive. We are not as competitive … in fixed [services]. We know that. Simply the consumer doesn’t have a choice,” said Mr Healy.
“Depending on where you live, it determines the service provider. What we intend is to introduce a choice in service, a competition through infrastructure sharing,” he added.
After years of delay, this can now work from a technical standpoint, said Mr Healy.
“We have proven that it works. What we need to take into account now are the commercial arrangements,” he said.
A stumbling block for the introduction of network sharing between Etisalat and du is achieving a satisfactory profit margin for each operator, as they pay a wholesale price to rent capacity on each other’s networks.
“If the wholesale price is so high, there is no margin left for competition at retail level,” said Mr Healy.
“Now, finding this margin level, so it is fair to the consumer and it is fair to the operator. This is the difficult part of the equation.”
A committee for the development of the communication sector was assigned this task, according to Mr Healy.
Analysts say that du is more likely to benefit from a network-sharing agreement with Etisalat.
“Geographically speaking the exclusive area covered by Etisalat in the UAE is much bigger than that of du,” said Omar Maher, a telecoms analyst at the Cairo-based investment bank EFG-Hermes.
“But then du has exclusivity in key areas in Dubai, such as DIFC. The benefit will be more for du, because they will have access to [a] bigger part of the market.”
Network sharing will have a positive impact on pricing for the consumer, but in terms of the financial impact on the operators, it is too early to assess that. It will all depend on the terms of commercial agreement, according to Mr Maher.
Sharing infrastructure can be a building block for a wider national broadband network. Countries such as Qatar, Malaysia, Singapore, and the UK have taken a successful initiative to adopt a unified broadband network.
selgazzar@thenational.ae
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