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Tue 10 Feb 2015 04:35 PM

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Dubai's du sees competition in fixed-line services within months

Telecom operator says long-delayed deal on network sharing has been agreed, effective by year-end

Dubai's du sees competition in fixed-line services within months

Telecom operator du said on Tuesday that a long-delayed deal on network sharing to allow competition in broadband, TV and landline services in the United Arab Emirates has been agreed and should be effective by the end of the year.

Negotiations between du and larger rival Etisalat have dragged on since early 2009, even though the federal-run Emirates Investment Authority is the largest shareholder in both operators.

The two companies offer fixed-line phone, broadband and television packages in different districts, with du largely confined to Dubai's newer areas. Network sharing would allow them to compete in the same areas.

"We are not there yet," du's chairman, Ahmad Bin Byat, told reporters on the sidelines of a conference in Dubai. "It's just a matter of a couple of months I guess at the maximum. The agreement is in place, the legality has been sorted out."

Du said last July that network sharing would be introduced by the end of 2014, while an Etisalat bond prospectus mentioned the same deadline.

Byat on Tuesday blamed the delay on technical issues in making the operators' networks compatible.

"It took longer than expected," he said. "What is important for us ... is to make sure they (customers) get a better experience than today."

Analysts say a desire to protect shareholder value has led to little real competition in UAE telecoms, with the Emirates Investment Authority owning 39.5 percent of du and 60 percent of Etisalat. The government nets dividends from the two operators and also levies heavy taxes on the sector.

Byat hinted the UAE could consider licensing Internet service providers (ISPs) - common in developed markets - as well as mobile virtual network operators (MVNOs), which do not own networks but instead lease capacity from mobile providers.

"We don't want more fibre and networks because it is expensive and it is inefficient," Byat said. "What we want is to get more services to the public in more competitive and seamless ways."

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