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Tue 30 Mar 2010 09:12 AM

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High UAE broadband costs hinder growth

Exec calls on regulator to reduce cost of broadband to increase number of users and quality of sites.

High UAE broadband costs hinder growth
WEB COSTS: A lot of UAE internet users complain broadband prices are too high. (Getty Images)

The cost of broadband internet services in the UAE is threatening to keep both the quality of online content and the amount of traffic low, a prominent local executive has warned.

“What we hear a lot of people saying – especially in terms of broadband – is why is it as much as ten times more expensive than anywhere else?” Alexander Rauser, CEO of online creative ad consultancy Omnia Connect, told Arabian Business.

“Of course there’s a reason to the cost, but it’s probably something that the regulator could look at in order to help local internet traffic grow.”

Rauser also indicated that a greater number of internet services would coax users into using broadband rather than, say, their mobile phones, and add to their consumption of “richer media”.

According to the Omnia Connect executive, online advertising performed well over the course of last year, despite the downturn.

“As other budgets were slashed, more people looked to go online, and at the same time there was a lot of shouting from the industry suggesting that clients should go digital because it’s cheaper,” commented Rauser.

“But it’s not cheap as such; it might be more cost-effective, it might get you better results and it might help you measure those results more clearly, but you may need to invest in order to get your campaign right.”

Omnia Connect recently completed the online portal for local brokerage Shuaa Securities, and has also run online advertising campaigns via social media for Samsung, Wakestock Abu Dhabi and a major local telecoms firm.

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Michael Tomlinson 10 years ago

What I don't understand, is Etisalat opens in Africa and other countries. No doubt offering services at affordable prices and probably good service too. Yet in their home country, where we should have the absolute best service at best prices, customers are given the opposite. Extreme prices for extremely slow connections. There's no logic to this. If Etisalat doesn't know how to run it's own business bring in experts who can, like vodafone, Orange, T-Mobile. Most expats and I'm sure locals too now associate all bad things with Etisalat. The name is spoilt. So no amount of PR is going to change that. Opening up to new competition would change that, as it shows customers (private and business) that Etisalat is after what is best for their customers.

mohannad 10 years ago

personally I changed my mobile 3G from etisalat to Du, the former is unbelievable slow and intermittent all of the time.. Du (possibly because they still don't have many subscribers) provides better 3G service. Home broadband is greedily expensive by both etisalat and Du, simply bcs there is no real competition, it is still monopoly.. everytime i check the prices of similar services in other countries in ME or even EU I find that we pay here way over the others abroad.. the simple question is WHY!!! A friend of mine in Egypt can easily afford to get the USB mobile modem from etisalat there at very very reaonable usage cost and almost no setup fees, I earn 10 times more than what my fried does and can't afford the same over here!!

Omar Shamma 10 years ago

Whilst I do not think that either Etisalat or their affilate (Du) are complaining over their "Duopoly" in the market, its really the TRA that is to blame. I use the word affiliate because the government is a major shareholder in both entities. Look at the plans in Malaysia: Computerworld Malaysia is reporting that Broadband over Powerline (BPL) provider Velchip Sdn Bhd has formalised three major partnerships to advance the world’s biggest BPL project announced earlier this month. The project intends offering 60 million people unlimited high speed Internet connection of 224Mbps (megabits per second) at a cost of only around RM5 (US$1.58) per user per month. It’s the fastest and cheapest internet connectivity in the world. Unfortunately the UAE TRA does not appear realise that communication costs are a key component to attract FDI and accelerate economic growth. They want to foster and grow the "knowledge" economy yet they do not appear to factor cost into their equations.

Mazhar 10 years ago

If people or companies were given choice of paying income tax and company tax or having Etisalt what do you think they would chose. Etisalat is government owned and its revenues provide the state with money just like tax except Etisalat is better than tax