In the gritty streets of Deira, the old commercial heart of
Dubai, lurks a threat to some of the region's biggest telecommunications firms.
It is here on the northern bank of Dubai creek, among the
grocery stores and barbers, the discount tailors and food stalls, where
low-wage workers come after a day's toil to phone their family and friends
Instead of using their pre-paid mobile phones, they cram
into the sweaty booths of dilapidated backstreet internet shops to call home at
prices a fraction of those charged by telecom operators Etisalat, the United
Arab Emirates' most valuable listed company, and rival du.
These shops dodge government inspectors to offer unlicenced
Voice over Internet Protocol (VoIP) services - free Internet-to-Internet calls
and cheap Internet-to-phone calls. The UAE's regulator says only licenced
companies can provide VoIP.
"It's less than a tenth of the cost of Etisalat, that's
why I come here," said Mansour, 21. The Afghan works in a Deira clothes
shop and calls his family in Kabul three times a week from a 14-booth VoIP shop
run by managers Mamun and Shajib, both 22.
The Bangladeshi pair have been offering VoIP services for
more than a year and spoke on condition that their full names and company
details were not disclosed.
"For internet we can only charge AED3 ($0.82) an hour
and that's not enough to pay two salaries, shop rent, licences and broadband
costs," said Shajib. "We would have shut if it wasn't for VoIP, but
this is very popular and more and more people are telling their friends.
"Most people's salaries are not even AED1,400 per month
and they can't spend much on the telephone, so that's why they come here. If
Etisalat or du offered the same rates as us, we would close down
Internet-to-phone calls via Skype, the global leader for
consumer VoIP, are intermittently blocked in the UAE, but the Deira shops also use
other programmes such as Calls Telecom and Call World for internet-to-phone
calls, and these seem to work without hindrance.
Rates start at AED0.1 per minute to phone a landline in
India, with Pakistan, Bangladesh and Sri Lanka the other top destinations, Shajib
said. Prices to these countries are about AED0.25 per minute on average.
To call India, Etisalat and du charge AED1.89 per minute for
off-peak calls between 9 pm and 7am and AED2.40 at other times.
The regulator sets their tariffs, so the two operators
cannot directly compete on price and instead tout various call packages.
Etisalat offers subscribers a 60 percent discount on late-night calls to the
subcontinent, but its fees are still much higher than the rates offered by
Shajib and rival shops.
Etisalat operates across 18 countries but three-quarters of
its revenue comes from the UAE, while du is a single-country carrier, and
international calls are among their biggest income streams. So VoIP is
potentially disastrous for them.
Article continues on