Du drops internet prices and gains access to Etisalat network

Company says agreement with regulator 'opens up the whole country for us'.

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The telecommunications operator du has lowered the price of its internet and TV packages, in a potential sign of things to come in the marketplace. Within weeks, du will gain access to the network of its rival, Etisalat, effectively ending the latter's monopoly in many regions, after the competitors concluded talks with the Telecommunications Regulatory Authority on the matter. "This is opening up the whole country for us," said Farid Faraidooni, the chief commercial officer for du.

Observers expect the move to usher in a fresh wave of competition in the phone, internet and television markets. At present, Etisalat has a monopoly on internet and cable television services throughout most of the country, while du holds sway over a small area of Dubai that includes newer neighbourhoods such as Dubai Marina and Media City. Zeena al Borgan, a senior research analyst with Arab Advisors Group, said: "It's going to be a very positive step for customers in the UAE.

"Rates will drop and there will be more offers in the future; each operator will work on increasing their technology and invest in infrastructure." The move to create a competitive telecoms landscape began when du first began operations, in 2007. In what is perhaps a sign of competition to come, du yesterday announced a promotion - beginning in August - offering an 8mb internet connection bundled with TV and a landline for Dh249 a month, down from Dh499. Etisalat has a similar offering in its eLife programme that costs Dh399 a month.

Mr Faraidooni said businesses would be the greatest beneficiaries of cheaper internet and international call packages. The cost of internet in the UAE was now competitive with Canada and Ireland, du said in a statement. Businesses have long complained that high costs hurt efficiency. Since du began operating, it has aggressively promoted its mobile services to the country's lower-end market and only recently begun targeting more lucrative business customers. The tactics have started to pay off; in the first three months of this year, du gained 266,000 mobile users, while Etisalat lost about 30,000. du now controls about one-third of all mobile subscribers while Etisalat has the rest.