Is the UAE on the way to having a fully competitive telecoms market for the first time? Regulations proposed on Monday would allow Etisalat and du to set their own prices, opening the sector to genuine competition instead of the current duopoly managed by the Telecommunications Regulatory Authority (TRA). Customers would benefit from better service at lower cost; competition would sharpen the companies' operations here and abroad.
But a proposal doesn't make it so. The TRA now faces a considerable test of its will to open the market and act as an effective, impartial regulator. And its past record has been shaky. For more than a year, the authority has promised mobile-number portability, which would allow customers to keep their numbers if they switch companies for a better deal. It's an important option in a competitive market - most people don't want to lose their old number even to save a little money - but the TRA has been less than forthcoming on delivering its promise.
The authority also has to prove itself as a regulator. Last July, there was an international outcry when security companies announced that an Etisalat software patch was actually spyware, a claim the company denied. The TRA was completely silent on the issue. There is little doubt that Etisalat is of immense national importance, contributing to federal coffers and operating the nation's fibre-optic network. How the TRA can regulate the company, protect consumers and provide for an open playing field is a work in progress to say the least.
Both Etisalat and du have been criticised in these pages. But in truth, service has notably improved at both companies: Etisalat has benefited even from managed competition and du, after some hiccups, has brought its mobile service up to a high standard. The TRA has shown the intention, at least to, further improve the sector. If price competition is allowed, du stands to gain market share on its own merits. A third company might enter the marketplace. Etisalat might lose revenue domestically but the competition is necessary for the company to operate at a world-class standard as it expands across the Middle East, Asia and Africa. Most importantly, the UAE telecoms industry would establish itself as the clear leader in the region.